Delhi High Court
Kent Cables Private Limited & Ors. vs Kent Ro Systems Limited & Ors. on 30 May, 2023
Author: Jyoti Singh
Bench: Jyoti Singh
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 30th May, 2023
+ CS(COMM) 596/2022 & I.A. 16118/2022
KENT CABLES PRIVATE LIMITED & ORS. ..... Plaintiffs
Through: Mr. Sandeep Sethi, Senior
Advocate with Ms. Swathi Sukumar,
Mr. Pratyush Rao, Ms. Himangi Kapoor and
Mr. Ritik Raghuvanshi, Advocates.
versus
KENT RO SYSTEMS LIMITED & ORS. ..... Defendants
Through: Mr. Rajiv Nayar and Mr. Akhil
Sibal, Senior Advocates with Mr. Ankur
Sangal, Mr. Ankit Arvind, Mr. Shashwat
Rakshit, Mr. Kiratraj Sadana and
Ms. Asavari Jain, Advocates.
+ CS(COMM) 613/2022 & I.A. 14317/2022
KENT RO SYSTEMS LIMITED & ORS. ..... Plaintiffs
Through: Mr. Rajiv Nayar and Mr. Akhil
Sibal, Senior Advocates with Mr. Ankur
Sangal, Mr. Ankit Arvind, Mr. Shashwat
Rakshit, Mr. Kiratraj Sadana and
Ms. Asavari Jain, Advocates.
versus
KENT CABLES PRIVATE LIMITED
& ORS. ..... Defendants
Through: Mr. Sandeep Sethi, Senior
Advocate with Ms. Swathi Sukumar,
Mr. Pratyush Rao, Ms. Himangi Kapoor and
Mr. Ritik Raghuvanshi, Advocates.
Signature Not Verified
Digitally Signed
By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 1 of 60
Signing Date:31.05.2023
15:13:18
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J.
I.A. 13851/2022 (under Order XXXIX Rules 1 and 2 CPC, by Plaintiffs) in CS(COMM) 596/2022 I.A. 14316/2022 (under Order XXXIX Rules 1 and 2 CPC, by Plaintiffs) in CS(COMM) 613/2022
1. CS(COMM) 596/2022 has been filed by Kent Cables Pvt. Ltd. & Others seeking permanent injunction restraining the Defendants and all others acting on their behalf from infringing Plaintiffs' registered trademark 'KENT' on the products or as part of the corporate name and/or any other trademark deceptively similar thereto in relation to same or similar electronic or electrical goods as well as from passing off by using the trademark 'KENT' in relation to electronic/electrical goods including, but not limited to Fans, lighting products, wires and cables etc., amongst other reliefs.
2. CS(COMM) 613/2022 has been filed by Kent RO Systems Ltd. & Others seeking permanent injunction restraining the Defendants and all others acting on their behalf from manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in any electric appliances including but not limited to iron water heaters, all types of fans etc. under the trademark KENT or any other mark including device marks and , which may be identical or deceptively similar to Plaintiffs' registered trademark KENT amounting to infringement as also passing off, Signature Not Verifiedamongst other reliefs. Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 2 of 60 Signing Date:31.05.2023 15:13:18
3. On account of the simililtude of facts and the issues involved in the two suits, the present applications are being decided by a common judgment. For the ease of reference, Plaintiffs in CS(COMM) 596/2022 are referred to as 'Kent Cables' and Plaintiffs in CS(COMM) 613/2022 are referred to as 'Kent RO' hereinafter. Narrative of facts to the extent they are different in the two suits will be separately mentioned.
BACKGROUND FACTS PERTAINING TO KENT CABLES IN CS(COMM) 596/2022
4. Trademark KENT was adopted by Plaintiff No. 2 in the year 1984 and Kent Cables has been carrying on business in various electronic and electrical goods, expanding its business from time-to- time and diversifying the business activities. The first registration of KENT in Class 09 dates back to 08.09.1986. Trademark KENT has acquired a valuable goodwill and reputation on account of colossal sales and immense publicity on account of its user dating back to 07.04.1984, which is reflected from the statement of sales and advertisement expenditure, details of which have been furnished in the plaint. Sales turnover for the year 2020-21 alone by Kent Cables Private Limited is to the tune of Rs. 5,40,05,625/- and with respect to Kent Industries is Rs. 212,81,72,708/-.
5. In addition to common law rights over the trademark KENT and its variants, Kent Cables is also the registered proprietor of the said mark (word) as well as the label , registered in multiple classes from time to time. Word mark KENT is an essential feature of the registered label marks and the registrations are valid and Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 3 of 60 Signing Date:31.05.2023 15:13:18 subsisting. Kent Cables is also the owner and registrant of the website www.kentbharat.com, accessible across the World Wide Web and has digital media presence on platforms such as Facebook, Instagram and LinkedIn.
6. Over the years, trademark KENT has become distinctive of the goods sold by Kent Cables as the same has been openly, continuously and extensively used in India in relation to fans and electronic products and has been consistently associated with excellent quality and standard. Kent Cables has been vigilantly protecting its statutory and common law rights and has filed various oppositions and rectifications against various third parties and the list enumerating the third parties in the plaint runs into 46 entities.
BACKGROUND FACTS PERTAINING TO KENT RO IN CS(COMM) 613/2022
7. Plaintiff No. 1/Kent RO Systems Ltd. is one of the leading companies in India, engaged in business of manufacture and sale of diverse range of electronic items like water purifiers, air purifiers, kitchen appliances, vacuum cleaners, conducting its business under the trademark KENT. Plaintiff No. 2/Mahesh Gupta, is the Chairman and Managing Director of Plaintiff No. 1 and registered proprietor of the trademarks forming the subject matter of the present suit. Plaintiff No. 3/S.S. Appliances Pvt. Ltd. is a part of the Kent Group of companies, wherein Plaintiff No. 2 is the Managing Director.
8. Plaintiff No. 2 adopted the trademark KENT in the year 1988 for oil meters and started using the same as 'KENT OIL METERS', where the dominant part of the trademark was KENT. Plaintiff No. 3 applied for registration of the mark in 1994 under Class 09 with user date of 1988 and the mark (device) was registered under No. 632891.
Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 4 of 60 Signing Date:31.05.2023 15:13:189. In 1999, Plaintiff No. 2 launched Reverse Osmosis ('RO') based domestic water purifiers in the Indian market under the trademark KENT for which a patent was also granted, which has now expired. At the time of launch of RO water purifiers under the trademark KENT, Plaintiff No. 2 also founded a firm M/s. Kent RO Systems and on 30.12.2004 set up another firm M/s. Kent Appliances for conduct of business of kitchen appliances and vacuum cleaners under the trademark KENT and its variants.
10. Plaintiff No. 1 was incorporated in the year 2007 which took over the business of M/s. Kent RO Systems including assets and liabilities and since then Plaintiff No. 1 is continuously and extensively expanding its business of electronic items/appliances using the mark KENT, with a fleet of approximately 3,000 employees. Kent RO has expanded its business in over 50 countries across the world including Spain, Egypt, Bhutan, Ireland, Turkey, Mauritius, Singapore, U.K. etc.
11. Plaintiff No. 1 while expanding its business of RO water purifiers in 2014 also launched other allied and cognate products under the mark KENT including air purifiers, security devices and kitchen appliances such as grinders, juicers etc. and is continuously selling the same. On account of extensive user for last three decades of the mark KENT and the quality of products, today every customer in the market relates the trademark KENT with Kent RO only and no one else.
12. In order to create statutory rights in the trademark KENT, Kent RO has obtained registrations for KENT and KENT formative marks in multiple classes such as 09, 07, 11 and 21. Registrations are valid Signature Not Verifiedand subsisting and renewed from time to time. Plaintiff No. 2 has also Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 5 of 60 Signing Date:31.05.2023 15:13:18 obtained registrations for the trademark KENT in several other jurisdictions in classes 07 and 11. Kent RO has also registered its domain names kentrosystem.com and https://www.kent.co.in/ on 19.03.2001 and 03.02.2006 respectively. The wide range of the products under the mark KENT are displayed and advertised on Kent RO's website.
13. The goodwill and reputation earned by Kent RO is reflected from the sales figures and the expenses incurred on promotion. For the year 2020-21, the sales turnover runs into Rs. 964.74 crores for Plaintiff No. 1 and Rs.3.064 crores for Plaintiff No. 3. Advertisement and promotional figures of Plaintiff No. 1 are Rs.119.53 crores for the year 2020-21 and for Plaintiff No. 3 are Rs.0.052 crores for the year 2019-20. Plaintiff No. 1 also has several awards to its credit and the products under the brand KENT have been promoted and endorsed by various celebrities.
14. Kent RO has actively safeguarded and protected its statutory and common law rights vested in the trademark KENT and has many orders granting injunction in its favour restraining the third parties from using the trademarks deceptively similar to KENT. CONTENTIONS ON BEHALF OF KENT CABLES
15. Kent RO is primarily in the business of dealing in water purifiers under the mark KENT and Kent Cables has no objection to use of the said mark in relation to water purifiers. The suit is triggered by the fact that in third week of August, 2022, Kent Cables received information from its distributors that Kent RO was planning to launch fans and perhaps lighting products, cables etc. under the trademark KENT and upon investigation on social media platforms, it came Signature Not Verifiedacross various posts by Kent RO wherein it had advertised vacancies Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 6 of 60 Signing Date:31.05.2023 15:13:18 for hiring Specialists in the division of fans. Kent Cables has filed oppositions and rectifications against applications filed by Kent RO for registration in Classes 09 and 11.
16. Kent RO has registrations in Class 07 but they do not pertain to fans and registration in Class 09 does not cover wires while registrations in Class 11 do not cover lighting. Kent RO has no right to adopt the mark KENT in respect of fans, lighting products, switches, wires etc. for which Kent Cables is a prior user. Kent RO's intention to adopt the mark KENT for products such as fans, with the clear knowledge of Kent Cables' established user is dishonest and to confuse the customers that the fans originate from Kent Cables.
17. Kent RO filed a suit being CS(COMM) 508/2022 before this Court for permanent injunction restraining Kent Cables from launching kitchen appliances including electric kettles, gas stoves, juicers, grinders, etc. under the mark KENT and on 29.07.2022, the Court, taking on record the statement of counsel for Kent Cables, directed that status quo be maintained and restrained Kent Cables from launching its products i.e. kitchen appliances till the next date of hearing.
18. Kent Cables is admittedly prior adopter of the trademark KENT which is evident from various documents placed on record reflecting prior use in respect of fans, wires and other electrical goods. Admittedly, Kent RO has not yet launched fans and as per settled law on the basis of prior adoption and prior use alone, Kent Cables is entitled to injunction against Kent RO. Reliance was placed on Neon Laboratories Limited v. Medical Technologies Limited and Others, (2016) 2 SCC 672; N.R. Dongre and Others v. Whirlpool Signature Not VerifiedCorporation and Another, (1996) 5 SCC 714; Ansul Industries v. Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 7 of 60 Signing Date:31.05.2023 15:13:18 Shiva Tobacco Company, 2007 SCC OnLine Del 74; Corn Products Refining Co. v. Shangrila Food Products Ltd, (1960) 1 SCR 968 and Century Traders v. Roshan Lal Duggar & Co., 1977 SCC OnLine Del 50.
19. Several documents filed on record such as trademark registration certificate dated 08.09.1986 showing user claim since 01.09.1986; MCA record showing Date of Incorporation of Plaintiff No. 1 on 30.06.1992; sales and/or purchase invoices for wires and cables for the years 1989, 1997-2000, 2002, 2006-2022; expenditures incurred on advertisement; photographs of advertisement hoardings; screenshots of advertisements on Aaj Tak Channel; advertisement invoices issued by Rajasthan Club; catalogues for fans of the year 2011; website pages; catalogues and promotional materials for various goods etc. clearly reflect prior user of Kent Cables compared to Kent RO.
20. Documents filed by Kent RO demonstrate that Kent Cables' fans are available under the trademark KENT through their listings on Amazon and other e-commerce websites. In fact, Kent RO has deliberately concealed that it had sent a legal notice to Kent Cables in 2011 attaching a brochure of fans which indicates not only the fact that Kent RO had complete knowledge of the sales of fans by Kent Cables but also that Kent Cables had sufficient commercial usage for over 11 years before filing the suit.
21. Kent Cables is also entitled to injunction by virtue of the fact that its trademark registration for KENT covers wires and 'Fans' are allied and cognate to wires. This is demonstrated from copies of letters written by the dealers and distributors of cables, vendor registration Signature Not Verifiedintimations sent by Chief Executive Officer of the Mata Vaishno Devi Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 8 of 60 Signing Date:31.05.2023 15:13:18 Shrine Board, extracts from a Tender document issued by Central Bank of India for the proposed renovation, Tender issued by Dedicated Freight Corridor Corporation of India Ltd. and several brochures of third party companies showing fans and cables sold side by side. Government and PSU tenders also evidence that wires, cables and fans are mentioned in the tenders in the same documents and common vendors are sought for purchasing the said goods.
22. This Court in KEI Industries Limited v. Raman Kwatra and Another, 2022 SCC OnLine Del 1459, has rendered a finding that use by the Defendants therein of the mark KEI for electric fans, electric water heaters etc. infringes the Plaintiff's registered mark KEI used in respect of electric wires and cables as fans are allied and cognate to electric wires and cables. In several judgments, Courts have laid down parameters for determining allied and cognate goods as per which common trade channels is one of the important factors for determination. In order to illustrate what goods can be allied and cognate, reliance was placed on the judgments in Kuldip Singh Trading as Saini Spares v. S.K. Auto Industries & Anr., 1995 SCC OnLine Del 419 for hydraulic brakes and clutches, Pearl Appliances Private Limited v. Jay Engineering Works Ltd., 1991 SCC OnLine Del 503 for washing machines and fans; Creative Handicrafts v. Sedana Electric Co. and Another, 1988 SCC OnLine Del 400 for television sets and electric and non-electric domestic appliances; Kamal Trading Co., Bombay and Others v. Gillette U.K. Limited, Middle Sex, England, 1987 SCC OnLine Bom 754, for shaving products and tooth brushes; Prakash Industries Ltd. v. Rajan Enterprises, 1993 SCC OnLine Del 522 for television parts and Signature Not Verifiedtelevisions tuners etc.; Somany Ceramics Limited v. Shri Ganesh Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 9 of 60 Signing Date:31.05.2023 15:13:18 Electric Co. and Others, 2022 SCC OnLine Del 3270 for tiles etc. and water heaters; FDC Limited v. Docsuggest Healthcare Services Pvt. Ltd. & Anr., 2017 SCC OnLine Del 6381, for pharmaceutical preparations and booking appointment for Doctors etc.
23. The two rival marks KENT (for Kent Cables) and KENT (for Kent RO) are phonetically, visually and structurally identical and there is complete identity in competing product i.e. Fans. The trade channels and consumer base being same, confusion must be presumed and Kent RO is guilty of infringement under Section 29(2) of the Trade Marks Act, 1999 (hereinafter referred to as the "Act"). Kent Cables has been a prior adopter and user of the mark KENT for cables, wires etc. and fans and has a formidable reputation in the market for fans. If Kent RO is permitted to launch fans under the trademark KENT, confusion amongst the public is inevitable as anyone will mistake the fans originating from the house of Kent Cables. This would result in damage to the reputation of Kent Cables which it has built over the years by its quality and service. This would amount to passing off the impugned goods as those of Kent Cables and it is settled law that common law rights must be protected and injunction must follow. Balance of convenience also lies in favour of Kent Cables as it is selling fans for years while Kent RO is yet to launch.
CONTENTIONS ON BEHALF OF KENT RO
24. The trademark KENT was adopted in the year 1988 for the business of oil meters and subsequently, the footprint was expanded into other product categories such as water purifiers, kitchen appliances etc. In 1999, the revolutionary product RO was launched in Signature Not Verifiedthe Indian market and in 2004, Kent appliances and vacuum cleaners Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 10 of 60 Signing Date:31.05.2023 15:13:18 were launched under the trademark KENT and its variants. These products have generated a huge market and KENT popularly known as Kent RO is today a household name. Kent RO is also a registered proprietor for the trademark KENT in Class 11 which includes apparatus for lighting, heating, ventilating etc. including all types of fans.
25. Being a registered proprietor of the trademark KENT, Kent RO has a statutory right to claim infringement by Kent Cables. Section 29(2)(a) of the Act requires three parameters to be fulfilled for establishing infringement i.e. identical/similar trademark, identical/ similar goods and likelihood of confusion/association. Kent RO is a registered proprietor for the trademark KENT and Kent Cables is using an identical trademark KENT. Kent RO adopted the trademark KENT for various appliances in multiple classes including electric and kitchen appliances such as water purifiers, mixers, grinders and other home appliances such as CCTV cameras, vacuum cleaners etc. Kent Cables is dishonestly trying to adopt the trademark KENT for infringing products such as iron, water heaters, geysers etc. including fans. Kent RO has placed on record substantial material in the form of major e-commerce platforms as well as brick and mortar stores showing common trade channels for home appliances such as water purifiers and fans. It is incorrect for Kent Cables to urge that Kent RO has placed reliance singularly on the sales by Vijay Sales Stores for the purpose of showing common trade channels since it has been overlooked that the material placed is with respect to Amazon, Flipkart, PepperFry, Croma, Bharat Electronics, to name a few. Written confirmations have also been placed on record from various Signature Not Verifiedother retailers which sell various appliances including water purifiers Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 11 of 60 Signing Date:31.05.2023 15:13:18 and fans from their stores. Therefore, a clear trade connection is made out and the goods such as water purifiers/home and kitchen appliances, which Kent RO has been selling for years are allied and cognate to fans. Kent Cables' own document being the Certificate of Quality issued in the name of Kent Industries, reflects that ceiling fans shown in the category of 'electrical home appliances' are separate from the category of 'wires and cables'. Even as per Nice Classification, goods such as water purifiers, air purifiers and fans fall under the same class of goods, which is Class 11. Pertinently, under the Nice Classification, a finished product is in-principle classified according to its functions or purpose and while such classes/ classification of goods may not be determinative or decisive but are relevant while considering the question of similarity in the nature of goods. Therefore, the second requirement of establishing infringement under Section 29(2)(a) of the Act, also stands satisfied as fans are allied and cognate to water purifiers, air purifiers, mixers, grinders, juicers etc. and Kent RO has the statutory right to restrain sale of fans by a third party.
26. The third and the only other requirement for infringement is likelihood of confusion or association and for which one of the crucial factors is the reputation or goodwill which an entity alleging infringement, enjoys. Kent RO has total sales worth Rs.7,654 crores approximately to its credit for sale of appliances under the trademark KENT and has invested approximately Rs.1,106 crores on marketing and developing the brand KENT. It has engaged several ambassadors and celebrities for promotion of its brand KENT, has business in 50 countries and has been awarded several awards for its quality of Signature Not Verifiedproducts since 2006, which is much before the launch of appliances Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 12 of 60 Signing Date:31.05.2023 15:13:18 (Fans) by Kent Cables. Kent RO has to its credit Asia's Most Promising Brands and is one of the best sellers of air purifiers, water purifiers, as per report of sales on Amazon and Flipkart for 22.09.2022 and 23.09.2022. KENT is considered as a well-known trademark and by virtue of extensive, continuous and uninterrupted use of the trademark KENT for its products, the trademark is exclusively associated with Kent RO and is a source identifier and therefore any use of the mark KENT by a third party including Kent Cables is likely to cause confusion as to the source and origin of similar goods. In fact, in the present case, it is not merely likelihood of confusion since documents on record reflect actual confusion where a customer ordering on Amazon connected Kent Cables' Fans with Kent RO. In fact, the confusion is not limited to fans but extends to water heaters and is also evident from customer reviews for which documents have been filed by Kent RO. Considering that Kent RO is not only the registered proprietor for appliances but also the prior user of the trademark KENT for appliances, it is entitled to a restraint order against Kent Cables for 'appliances'. Case of Kent RO is squarely covered by the judgment of the Supreme Court in Renaissance Hotel Holdings Inc. v. B. Vijaya Sai and Others, (2022) 5 SCC 1.
27. Contrary to the case of Kent RO, Kent Cables has registrations for the mark KENT for cables and wires in Class 09 and the attempt is to show that wires and cables are allied and cognate to fans. This is a wholly incorrect understanding of Kent Cables. Electric wires conduct and transmit electricity whereas fans are appliances which run on electricity to circulate air. If the logic applied by Kent Cables is followed, then anything which runs on electricity will be allied and Signature Not Verifiedcognate and this would mean that Kent Cables would have a Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 13 of 60 Signing Date:31.05.2023 15:13:18 monopoly over all electric and electrical appliances, which cannot be permitted.
28. In FDC Limited (supra), this Court has laid down the parameters to test similarity of goods, which is not restricted to common trade channels but involves showing commonality in nature and use of the goods including the intended purpose of the respective goods. It needs no emphasis that cables, wires and switches are all goods whose nature, use and intended purpose is to conduct/transmit electricity whereas the nature, use and intended purpose of fans is to cool and provide ventilation. Merely because fans use electricity to operate cannot make them similar to electrical wires, cables and switches.
29. Kent Cables relied on various goods in Class 11 to suggest that if all Class 11 products are allied and cognate, it would lead to absurdity as various apparently dissimilar products would then be held to be similar. It is not the case of Kent RO that all Class 11 products are similar. The description of classification in Classes 09 and 11 are relied upon by Kent RO in aid of the argument that nature, function and purpose of cables, wires etc. registered in favour of Kent Cables under Class 09 are entirely dissimilar to nature, function and purpose of fans which are classified under Class 11, which also includes goods registered in favour of Kent RO. Significantly, Class 09 inter alia includes apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling the distribution or use of electricity, whereas description of Class 11 includes apparatus for lighting, heating, cooking etc. The object in laying down the test of allied and cognate goods is to ascertain the likelihood of Signature Not Verifiedconfusion/association and which is why in FDC Limited (supra), this Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 14 of 60 Signing Date:31.05.2023 15:13:18 Court noted that element of distinctive character of a trademark and its reputation is also viewed when determining similarity between the goods and whether the similarity is sufficient to give rise to the likelihood of confusion. Kent Cables has failed to establish the similarity of goods with Kent RO to claim infringement as it cannot be said that wires, cables and fans are similar.
30. Without prejudice to the above, even assuming that the goods of Kent RO registered under the trademark KENT are dissimilar to the goods of Kent Cables, it has a clear case under Section 29(4) of the Act. The ingredients of Section 29(4) which are required to be satisfied for establishing infringement are: (a) trademark is identical with or similar to the registered trademark; (b) registered trademark has a reputation/goodwill in India; and (c) use of the mark without due cause takes unfair advantage of or is detrimental to the distinctive character or repute of the registered trademark. In the present case, the first ingredient stands satisfied as the rival trademarks are identical. The requirement of reputation/goodwill also stands satisfied looking at the volumes of sales and the sales turnover which is to the tune of approximately Rs.7,654 crores and the huge investment of Rs.1,106 crores on marketing and publicity. The awards received and the endorsement by celebrities inevitably leads to showing that KENT is a well-known trademark and has a reputation of a threshold required under Section 29(4) of the Act. Law is settled that greater the goodwill greater is the need to protect a mark from infringement. [Ref.:
Beiersdorf A.G. v. Ajay Sukhwani & Anr., 2008 SCC OnLine Del 1226]. The third requirement of Section 29(4) is also fulfilled since Kent RO has no control on the quality of products sold by Kent Cables Signature Not Verifiedand any deficiency in quality will damage the reputation and will be Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 15 of 60 Signing Date:31.05.2023 15:13:18 detrimental to the distinctive character and reputation of Kent RO, which is happening at present as reflected from the customer reviews on Amazon. Considering that all requirements of Section 29(4) are met, any use of the trademark KENT even for dissimilar goods by Kent Cables, assuming without admitting that fans and appliances like water purifiers etc. are not similar, will constitute infringement. [Ref.:
Somany Ceramics Limited (supra)].
31. Insofar as Kent Cables is concerned, it has been unable to establish substantial reputation of its trademark KENT in relation to its products and cannot claim infringement under Section 29(4). Specifically for fans, while it is claimed that it has been selling fans from 1984, however, no sales figures or advertising figures were provided when Kent Cables had filed the suit to substantiate the claim. It was only after Kent RO brought to light the said deficiency, a Chartered Accountant's ('CA') certificate was filed purportedly showing sales and that too, without advertising figures. Even in the reply to the legal notice, nothing was stated about the extent of use of fans, least of all sales figures and the position is the same in opposition proceedings inter se the parties. Significantly, there is no whisper of the CA certificate in reply to the injunction application filed by Kent Cables and nor was the certificate filed with the List of Documents dated 22.09.2022. The certificate does not mention KENT brand for fans and there are discrepancies in the sales figures and quantity of fans and therefore, this cannot be treated as a reliable document, at this stage, without further evidence. Kent Cables has been unable to show that use of the mark KENT by Kent RO will amount to taking any unfair advantage of its reputation which is a sine Signature Not Verifiedqua non for establishing infringement under Section 29(4). On the Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 16 of 60 Signing Date:31.05.2023 15:13:18 contrary, Kent RO has filed plethora of documents to show how Kent Cables is taking advantage of its reputation.
32. Kent Cables is also guilty of the tort of passing off, which has three intrinsic requirements viz. goodwill; misrepresentation; and damage to goodwill/likelihood of confusion. Reputation and goodwill of Kent RO with respect to the trademark KENT is established by the documents on record including the sales turnover and expenditure on promotion. Misrepresentation is evident from print outs from the Amazon website where customers have been confused between fans sold by Kent Cables and water heaters by Kent RO. Since Kent RO has no control on the quality of products sold by Kent Cables, any deficiency in the quality will certainly cause damage to its reputation. It is settled that once a case of passing off is established, injunction must follow. [Ref.: Laxmikant V. Patel v. Chetanbhai Shah and Another, (2002) 3 SCC 65; Mind Gym Ltd. v. Mindgym Kids Library Pvt. Ltd., 2014 SCC OnLine Del 1240; and Kalpataru Properties Pvt. Ltd., Mumbai and another v. Kalpataru Hospitality & Facility Management Services (P.) Limited, 2011 SCC OnLine Bom 987].
33. Contrary to the case established by Kent RO, Kent Cables has not been able to show any reputation in fans under the trademark KENT even after filing the purported CA certificate. It is not the case of Kent RO that there has been no sale of fans by Kent Cables and the case is limited to arguing that Kent Cables is mischievously seeking to exaggerate its sales of fans, which currently are, in fact, shown as being unavailable on prominent e-commerce platforms. The miniscule sales shown by Kent Cables are not sufficient to establish the required goodwill in its favour. The alleged tender documents pertaining to Signature Not Verifiedsome Government departments do not come to the aid of Kent Cables Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 17 of 60 Signing Date:31.05.2023 15:13:18 as these only show vendor registrations for different goods and do not reflect supply of any goods let alone fans by Kent Cables. Test of goodwill is to establish that consumer identifies the mark KENT for fans exclusively with Kent Cables, without which there can be no case of passing off. In the present case, there is nothing on record to show requisite goodwill, misrepresentation and likelihood of damage by Kent Cables and therefore, the case of passing off fails. Kent Cables has also not established misrepresentation by Kent RO since there cannot be any confusion in the market as no consumer can connect Kent RO's goods with Kent Cables. Nothing has been placed on record even to establish a prima facie case that Kent Cables has suffered any damage to its reputation.
ANALYSIS AND FINDINGS
34. At the outset, it is required to be mentioned that while the applications under consideration relate to several goods/products of both parties, however, during the arguments the main emphasis and focus was with respect to 'Fans', which really seems to be the bone of contention and in fact, the trigger of the suits was the purported launch of fans by Kent RO, in the year 2022.
35. It is undisputed between the parties that Kent Cables and Kent RO are both registered proprietors of the trademark 'KENT'. Kent Cables adopted the trademark 'KENT' in the year 1984 and its first registration dates back to 08.09.1986 in Class 09 whereas Kent RO first adopted the trademark 'KENT' in 1988 for oil meters and subsequently, expanded into product categories such as Water Purifiers, Kitchen Appliances etc. In 1999, Kent RO introduced its revolutionary product 'Reverse Osmosis' and is also a registered Signature Not Verifiedproprietor for trademark 'KENT' in Class 11 for products, such as Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 18 of 60 Signing Date:31.05.2023 15:13:18 Water Purifiers, Water Pressure Boosting System etc. The bone of contention between the parties is their respective claims qua fans and it is, therefore, pertinent to mention that according to Kent Cables, they have been selling fans since 1984 openly, continuously and extensively in India while Kent RO was in the process of launching when the present suit was filed by Kent Cables seeking injunction.
36. The first and foremost contention that requires to be dealt with is whether Kent RO has infringed the trademark of Kent Cables and for this purpose, reference will be required to be made to Section 29(2) of the Act which provides that a registered trademark is infringed by a person who not being a registered proprietor or a permissive user, uses in the course of trade a mark which because of its identity/similarity with the registered trademark and similarity or identity of the goods or services covered by such registered trademark are likely to cause confusion or have an association with the registered trademark. It is unnecessary to refer to Section 29(2)(b) of the Act since the rival registered trademarks are identical and not similar. It is an admitted position that insofar as this case is concerned, Kent Cables is registered in Class 09 for insulated electric wires and cables, switches, fuses, cut-outs, plugs, sockets etc. and have applied for registration in Class 11 for goods relating to installation for lighting, heating, cooking, steam generating etc. including fans. It is thus apparent that the registration for trademark KENT at this stage does not cover fans, which is the point of dispute and discord between the parties to the lis. In order to establish infringement under Section 29(2) even at the prima facie stage, twin conditions must be satisfied by a registered proprietor of the trademark: (a) the impugned mark is Signature Not Verifiedidentical/similar; and (b) the rival goods are identical/similar and/or Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 19 of 60 Signing Date:31.05.2023 15:13:18 allied and cognate. To so establish, it is also essential that Plaintiff's trademark registration covers the goods with respect to which infringement is claimed or the goods are allied and cognate to the goods for which its trademark is registered. In view of the position that Kent Cables does not have registration for fans, it is imperative to show that fans are allied and cognate to the goods for which it is registered in order to claim that Kent RO has infringed Kent Cables' trademark KENT. Much was argued by both sides on this aspect and while Kent Cables laboured hard to show that fans are allied and cognate to electrical cables, wires, switches, plugs, sockets, electrical coil holders, electric starters etc. by relying on tender documents placed by different Government or private organisations as also on showing that these goods are sold through common trade channels, including brick and mortar stores. Heavy reliance was placed by Kent Cables on the judgment of a Co-ordinate Bench of this Court in KEI Industries Limited (supra), wherein the Court had recognized fans to be allied and cognate to wires/cables as both are electrical goods. Reliance was also placed on the judgment in FDC Limited v. Faraway Foods Pvt. Ltd., 2021 SCC OnLine Del 1539, to support the argument that wires/cables and fans have the same class of consumers, nature and function and trading channels/stores/shops. In KEI Industries Limited (supra), the Co-ordinate Bench held that the Plaintiff holds a valid and subsisting wordmark registration of the word 'KEI' in respect of electric wires and cables and any use by any other party of the acronym 'KEI' in respect of identical or similar goods would amount to infringement and therefore, use by the Defendants of the impugned mark in respect of electric fans etc. Signature Not Verifiedwould prima facie infringe Plaintiff's registered mark 'KEI'. In view Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 20 of 60 Signing Date:31.05.2023 15:13:18 of this judgement, the stand of Kent Cables would have been correct and prima facie infringement was made out. However, after the judgment was reserved in the present case, a Division Bench of this Court in Raman Kwatra and Another v. KEI Industries Limited, 2023 SCC OnLine Del 38, has overruled the said finding and held that it cannot be accepted that cables/wires are similar to fans etc. and therefore, no infringement is made out under Section 29(2) of the Act albeit the matter was remanded back to the learned Single Judge for examination of the claim for infringement under Section 29(4) of the Act. Relevant paras of the judgment are as follows:-
"27. As noted above, the appellant has seriously contested the aforesaid finding. Admittedly, the respondent is not engaged in the business of manufacturing or dealing in electrical appliances. The respondent is engaged in the business of manufacturing and marketing power cables and various other kinds of cables including flexible-house wires and stainless-steel wires. The respondent has described its business activities in paragraph no. 6 of the plaint. The same reads as under:
"6. The Plaintiff Company is presently engaged in the business of manufacturing and marketing of power cables - Low Tension (LT), High Tension (HT) and Extra High Voltage (EHV), control and instrumentation cables, specialty cables, elastomeric cable, rubber cables, submersible cables, flexible and house wires, winding wires and stainless steel wires that address the cabling requirements of a wide spectrum of sectors such as power, oil refineries, railways, automobiles, cement, steel, fertilizers, textile and real estate, amongst others. The Plaintiff Company is among the first company in India having manufacturing capabilities up to 400 KV. The Plaintiff Company has also ventured into the Engineering, Procurement and Construction ("EPC") space by bagging several orders/contracts for survey, supply of materials, design, erection, testing & commissioning on a turnkey basis."
28. The respondent claims that its marks are registered in various Classes. The respondent is a registered proprietor of the word mark "KEI", which is registered in Class 9 for the goods described as "Wires and Cables (Electric and telecommunication)". Clearly, the said registration does not cover electrical appliances. The device mark is registered in Class 6 in respect of goods described as Signature Not Verified "Stainless Steel Wires included in Class-6". The device mark is also Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 21 of 60 Signing Date:31.05.2023 15:13:18 registered in Class 9 and the details of the goods and services covered under the said registration are set out below:
"ELECTRICAL WIRES & CABLES (VIZ. POWER CABLE, CONTROL CABLE, INSTRUMENTATION CABLE, RUBBER CABLE, WINDING, FLEXIBLE & HOUSE WIRE), ELECTRICAL SWITCHGEARS, CONTROL PANELS, CIRCUIT BREAKERS, TRANSFORMERS, AMPLIFIERS, ELECTRIC AND ELECTROMAGNETIC AND MECHANICAL RELAYS, SWITCHE, FUSES OF ALL KINDS AND OTHER KINDS OF ELECTRICAL AND ELECTRONIC INSTRUMENTS".
29. The respondent is also the proprietor of other label marks including the letters 'KEI' in the style and font as the device mark, in Class 6 and Class 9. The respondent has also obtained the registration of the word mark "KEI" in Class 35 in respect of the following goods and services:
"Advertisement, promotion and marketing of services relating to integrated design, engineering, material procurement, field services, construction, cable laying, project monitoring and project management services, Wholesale, Retail, export, Advertising, Distribution, Marketing, Sales Promotion services related to metal, wires and cables including Extra High Voltage Cables, High Tension Cables, Low Tension Cables, Control Cables, Instrumentation Cables, Thermocouple Extension, Rubber Cables, House Wires, Single/Multicore Flexible Wires, Winding Wires, Stainless Steel Wires, Marine & Offshore Cables, Solar Cables, Advertising and marketing of the aforesaid goods and services."
30. It is apparent from the above that none of the trademarks cover electric appliances such as fans, geysers, immersion rods etc. These appliances are household appliances used for specific purposes.
31. The learned Single Judge had proceeded on the basis that the appellant was using the impugned trademark in respect of goods, which are similar to the goods in respect of which the respondent's word mark "KEI" and the device mark are registered.
32. Section 29(4) of the Trade Marks Act, 1999 (hereafter 'the TM Act') provides that a registered trademark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark that is identical or similar to the registered mark in respect of goods that are not similar, if the following conditions - as set out in section 29(4)(c) - are met:"the registered trade mark has a reputation in India and the use of the mark is without due cause takes unfair advantage of or is detrimental to the distinctive character or repute of the registered trade mark.".
Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 22 of 60 Signing Date:31.05.2023 15:13:1833. The appellant contended before the learned Single Judge that the conditions, as set out under Section 29(4)(c) of the TM Act, were not established and therefore, the use of the impugned mark did not infringe the registered trademarks of the respondent. The learned Single Judge rejected the said contention by reasoning that Section 29 (4) of the TM Act was not applicable because all goods in respect of which the impugned mark was used were similar to the goods covered under the respondent's registered trademarks. Paragraph nos. 38, 39 and 40 of the impugned judgment, which sets out the aforesaid reasoning, reads as under:
"38. Section 29(4) does not come in for application in the present case at all, inasmuch as it relates to cases in which the allegedly infringing mark is used in relation to goods or services which are not similar to those for which the trademark is registered. In the present case, the goods in respect of which the defendants are using the impugned are, prima facie, similar to the goods in respect of which the plaintiff's "KEI" word mark and device mark are registered, as the registration held by the plaintiff covers, apart from the specific items referred to in the registeration, also "other kinds of elecrical and electronic instruemnts". If one were to construe the expression "other kinds of electrical and electronic instruments" ejusdem generis to the words which precede the said expression in registration certificates issued to the plaintiff, the electrical and electronic instruments which would be covered by the said expression would be analogous to electrical wires and cables, electrical switch gears, control panels, circuit breakers, transformers, amplifiers, switches and fuses of all kinds.
39. In my prima facie opinion, electrical fans, geysers and water immersion rods, in respect of which defendants are using the impugned are allied and similar to the goods in respect of which the plaintiff's word mark and device mark are registered. They, therefore, fall within the ambit of the expression "other kinds of electrical and electronic instruments" as contained in the registration granted to the plaintiff of its 'KEI' word mark and device mark, and are, even otherwise, "similar goods" within the meaning of Section 29(2) of the Trademarks Act.Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 23 of 60 Signing Date:31.05.2023 15:13:18
40. Insofar as similarity between and the plaintiff's registered marks are concerned, the aspect of infringement is self apparent. The plaintiff holds a valid and subsisting word mark registration for the word 'KEI', in respect of electric wires and cables. Any use, by any other party, of the acronym 'KEI', in respect of identical or similar goods would amount to infringement. The use, by the defendants, of the impugned mark, in respect of electric fans, electric water heaters, immersion water heaters etc. is, therefore, prima facie infringing of the plaintiff's registered work mark 'KEI' word mark and device mark, within the meaning of Section 29(2) of the Trademarks Act."
34. It is apparent from the above that the learned Single Judge was of the view that the words "other kinds of electrical and electronic instruments" which were covered by the registered device mark would cover the goods manufactured and dealt with by the appellant being pedestal fans, geysers, immersion rods and grills etc. The learned Single Judge applied the rule of ejusdem generis in concluding as above.
35. First of all, it is important to note that the respondent's registered word mark does not cover "other kinds of electrical and electronic instruments". As noticed above, the said word mark "KEI" is registered in Class 9 in respect of "Wires and Cables (Electric and telecommunication)". It is also registered in Class 35 in relation to certain services as noted above. Thus, the conclusion that the goods dealt with by the appellant were covered under the word mark "KEI" is, ex facie, erroneous.
36. Secondly, we are also of the view that the learned Single Judge fell in an error in concluding that the words 'other kinds of electrical and electronic instruments' would cover goods such as household electrical appliances by applying the rule of ejusdem generis.
37. The rule of ejusdem generis is applicable where the words pertaining to a particular class or genus are followed by general words. By applying the rule of ejusdem generis, the general words are construed to be limited to the class of goods as specified. In Amar Chandra Chakraborty v. Collector of Excise, Government of Tripura : (1972) 2 SCC 442, the Supreme Court had explained the said rule of interpretation as under:
"9. The doctrine of ejusdem generis applies when (i) the statute Signature Not Verified contains an enumeration of specific words; (ii) the subjects of Digitally Signed the enumeration constitute a class or category; (iii) that class or By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 24 of 60 Signing Date:31.05.2023 15:13:18 category is not exhausted by the enumeration; (iv) the general term follows the enumeration and (v) there is no indication of a different legislative intent."
38. In Attorney-General v. Brown : [1920] 1 K.B. 773, the Court had applied the said rule in considering the words "or any other goods"
as used in Section 43 of the Customs (Consolidation) Act, 1876 to partake the character of goods preceding the same.
39. The rule of noscitur a sociis is used for interpreting general words by referring to other terms associated with it. As explained by the Supreme Court in State of Bombay v. Hospital Mazdoor Sabha :
AIR 1960 SC 610, the said rule is broader than the rule of ejusdem generis. In Rohit Pulp and Paper Mills Ltd. v. CCE : (1990) 3 SCC 447, the Supreme Court had explained the said cannon of statutory interpretation in the following words:
"This rule, according to Maxwell, means that, when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general. The same rule is thus interpreted in "Words and Phrases" (Vo. XIV, p. 207):"Associated words take their meaning from one another under the doctrine of nosciture a sociis, the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it; such doctrine is broader than the maxim Ejusdem Generis". In fact the latter maxim "is only an illustration or specific application of the broader maxim noscitur a sociis". The argument is that certain essential features or attributes are invariably associated with the words "business and trade" as understood in the popular and conventional sense, and it is the colour of these attributes which is taken by the other words used in the definition though their normal import may be much wider. We are not impressed by this argument. It must be borne in mind that noscitur a sociis is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. It is only where the intention of the legislature in associating wider words with words of narrower significance is doubtful, or otherwise not clear that the present rule of construction can be usefully applied. It can also be applied where the meaning of the words of wider import is doubtful; but, where the object of the legislature in using wider words is clear and free of ambiguity, the rule of construction in question cannot be pressed into service."Signature Not Verified
40. Although, the learned Single Judge had applied the rule of Digitally Signed ejusdem generis, the Court fell in error in not restricting the words By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 25 of 60 Signing Date:31.05.2023 15:13:18 "other kinds of electrical and electronic instruments" to cover goods of a similar character as that of the goods specified preceding the said words. The goods covered under the device mark are goods, which relate to conduction and manipulation of electricity. The electrical wires and cables (power cables, control cables, instrumentation cables, rubber cables, winding wires, flexible, and house wires) are wires which are used for conduction of energy and/or control of such flow. Electrical switch gears, control panel, circuit breakers are also devices for interruption and control of electricity. Transformers and amplifiers are devices used for manipulating the flow of electrical energy. Electric and electromagnetic mechanical relays, switches, and fuses are also devices used in relation to flow of electricity. In this view, the words "other kinds of electrical and electronic instruments" would necessarily require to be interpreted in a restrictive sense and confined to electrical and electronic instruments that are similar in their character as of the preceding specified goods. Thus, such electrical and electronic instruments would necessarily mean instruments for control, interruption and manipulation of flow of electric energy. Such words could not be read expansively to cover all electrical appliances. Such expansive interpretation would militate against the rule of ejusdem generis.
41. It is apparent that if the words "other kinds of electrical and electronic instruments" are read in an expansive manner, as interpreted by the learned Single Judge, the same would cover all other electrical appliances as well such as televisions, computers, electrical time pieces etc. Plainly, such interpretation would be contrary to the rule of ejusdem generis and nosciture a sociis. Thus, although the learned Single Judge had rightly held that the goods covered under electrical and electronic instruments must be read ejusdem generis, he has erred in concluding quite the opposite.
42. In view of the above, we are unable to accept that the respondent's registered trademarks cover the goods, which are similar to the goods, in respect of which, the appellant uses the impugned mark. Thus, the impugned judgment, to the extent it holds that the respondent's impugned trademarks are infringed in terms of Section 29 (2) of the TM Act, is unsustainable."
37. In view of the finding of the Division Bench, which binds this Court, it can no longer be held in favour of Kent Cables that fans are allied and cognate to wires/cables etc. and therefore, the claim for infringement under Section 29(2) is prima facie not made out.
Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 26 of 60 Signing Date:31.05.2023 15:13:1838. The question that now posits is whether Kent Cables can claim an injunction against Kent RO in respect of sale of fans on ground of 'prior user' and/or 'passing off'. In the present case, Kent Cables largely predicates its case on being a prior adopter and user of the mark KENT in respect of the goods in dispute i.e. Fans. The conundrum and interplay between the rights of a prior user qua the rights of a proprietor or a registered user whose registration or use is subsequent stands resolved and is no longer res integra. In S. Syed Mohideen v. P. Sulochana Bai, (2016) 2 SCC 683, the Supreme Court was examining inter alia two questions, which are relevant to the present case: (a) whether in the absence of a claim for infringement, an action can be brought for passing off invoking provisions of Section 27(2) of the Act; and (b) rights of a prior user of a trademark. On the first question, the Supreme Court held that rights in passing off emanate from common law and not from the statutory provisions of the Act and are independent therefrom and traditionally passing off is a right for protection of goodwill in the business against misrepresentation caused in course of trade and for prevention of resultant damage and is premised on the ethos that no person is entitled to carry on his or her business on the pretext that the said business is of another, a principle to which the Supreme Court had given its imprimatur in Laxmikant V. Patel (supra). On the second aspect, the Supreme Court ruled that conjoint reading of Sections 27, 28 and 34 would show that rights of registration are subject to Section 34 and the Scheme of the Act is such where rights of prior user are recognized superior even to registration rights. The Supreme Court relied on the judgment of the Supreme Court in N.R. Dongre and Signature Not VerifiedOthers (supra), where this proposition has been dealt with in extenso. Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 27 of 60 Signing Date:31.05.2023 15:13:18 Relevant paras from the judgment in S. Syed Mohideen (supra), are as under:-
"28. However, what is stated above is the reflection of Section 28 of the Act when that provision is seen and examined without reference to the other provisions of the Act. It is stated at the cost of repetition that as per this Section owner of registered trade mark cannot sue for infringement of his registered trade mark if the appellant also has the trade mark which is registered. Having said so, a very important question arises for consideration at this stage, namely, whether such a respondent can bring an action against the appellant for passing off invoking the provisions of Section 27(2) of the Act. In other words, what would be the interplay of Section 27(2) and Section 28(3) of the Act is the issue that arises for consideration in the instant case. As already noticed above, the trial court as well as the High Court have granted the injunction in favour of the respondent on the basis of prior user as well as on the ground that the trade mark of the appellant, even if it is registered, would cause deception in the mind of the public at large and the appellant is trying to encash upon, exploit and ride upon on the goodwill of the respondent herein. Therefore, the issue to be determined is as to whether in such a scenario, the provisions of Section 27(2) would still be available even when the appellant is having registration of the trade mark of which he is using.
29. After considering the entire matter in the light of the various provisions of the Act and the scheme, our answer to the aforesaid question would be in the affirmative. Our reasons for arriving at this conclusion are the following.
30. Firstly, the answer to this proposition can be seen by carefully looking at the provisions of the Trade Marks Act, 1999 (the Act). Collective reading of the provisions especially Sections 27, 28, 29 and 34 of the Trade Marks Act, 1999 would show that the rights conferred by registration are subject to the rights of the prior user of the trade mark. We have already reproduced Section 27 and Section 29 of the Act.
30.1. From the reading of Section 27(2) of the Act, it is clear that the right of action of any person for passing off the goods/services of another person and remedies thereof are not affected by the provisions of the Act. Thus, the rights in passing off are emanating from the common law and not from the provisions of the Act and they are independent from the rights conferred by the Act. This is evident from the reading of the opening words of Section 27(2) which are "Nothing in this Act shall be deemed to affect rights...."
30.2. Likewise, the registration of the mark shall give exclusive rights to the use of the trade mark subject to the other provisions of Signature Not Verified this Act. Thus, the rights granted by the registration in the form of Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 28 of 60 Signing Date:31.05.2023 15:13:18 exclusivity are not absolute but are subject to the provisions of the Act.
30.3. Section 28(3) of the Act provides that the rights of two registered proprietors of identical or nearly resembling trade marks shall not be enforced against each other. However, they shall be same against the third parties. Section 28(3) merely provides that there shall be no rights of one registered proprietor vis-à-vis another but only for the purpose of registration. The said provision 28(3) nowhere comments about the rights of passing off which shall remain unaffected due to overriding effect of Section 27(2) of the Act and thus the rights emanating from the common law shall remain undisturbed by the enactment of Section 28(3) which clearly states that the rights of one registered proprietor shall not be enforced against the another person.
30.4. Section 34 of the Trade Marks Act, 1999 provides that nothing in this Act shall entitle the registered proprietor or registered user to interfere with the rights of prior user. Conjoint reading of Sections 34, 27 and 28 would show that the rights of registration are subject to Section 34 which can be seen from the opening words of Section 28 of the Act which states "Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor...." and also the opening words of Section 34 which states "Nothing in this Act shall entitle the proprietor or a registered user of registered trade mark to interfere...." Thus, the scheme of the Act is such where rights of prior user are recognised superior than that of the registration and even the registered proprietor cannot disturb/interfere with the rights of prior user. The overall effect of collective reading of the provisions of the Act is that the action for passing off which is premised on the rights of prior user generating a goodwill shall be unaffected by any registration provided under the Act. This proposition has been discussed in extenso in N.R. Dongre v. Whirlpool Corpn. [N.R. Dongre v. Whirlpool Corpn., 1995 SCC OnLine Del 310 : AIR 1995 Del 300] wherein the Division Bench of the Delhi High Court recognised that the registration is not an indefeasible right and the same is subject to rights of prior user. The said decision of Whirlpool [N.R. Dongre v. Whirlpool Corpn., 1995 SCC OnLine Del 310 : AIR 1995 Del 300] was further affirmed by the Supreme Court of India in N.R. Dongre v. Whirlpool Corpn. [N.R. Dongre v. Whirlpool Corpn., (1996) 5 SCC 714] 30.5. The above were the reasonings from the provisions arising from the plain reading of the Act which gives clear indication that the rights of prior user are superior than that of registration and are unaffected by the registration rights under the Act.
31. Secondly, there are other additional reasonings as to why the Signature Not Verified passing off rights are considered to be superior than that of Digitally Signed registration rights.
By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 29 of 60Signing Date:31.05.2023 15:13:18 31.1. Traditionally, passing off in common law is considered to be a right for protection of goodwill in the business against misrepresentation caused in the course of trade and for prevention of resultant damage on account of the said misrepresentation. The three ingredients of passing off are goodwill, misrepresentation and damage. These ingredients are considered to be classical trinity under the law of passing off as per the speech of Lord Oliver laid down in Reckitt & Colman Products Ltd. v. Borden Inc. [Reckitt & Colman Products Ltd. v. Borden Inc., (1990) 1 WLR 491 : (1990) 1 All ER 873 (HL)] which is more popularly known as "Jif Lemon"
case wherein Lord Oliver reduced the five guidelines laid out by Lord Diplock in Erven Warnink Besloten Vennootschap v. J. Townend & Sons (Hull) Ltd. [Erven Warnink Besloten Vennootschap v. J. Townend & Sons (Hull) Ltd., 1979 AC 731 at p. 742 : (1979) 3 WLR 68 : (1979) 2 All ER 927 (HL)] ("the Advocaat case") to three elements: (1) goodwill owned by a trader, (2) misrepresentation, and (3) damage to goodwill. Thus, the passing off action is essentially an action in deceit where the common law rule is that no person is entitled to carry on his or her business on pretext that the said business is of that of another. This Court has given its imprimatur to the above principle in Laxmikant V. Patel v. Chetanbhai Shah [Laxmikant V. Patel v. Chetanbhai Shah, (2002) 3 SCC 65] .
31.2. The applicability of the said principle can be seen as to which proprietor has generated the goodwill by way of use of the mark/name in the business. The use of the mark/carrying on business under the name confers the rights in favour of the person and generates goodwill in the market. Accordingly, the latter user of the mark/name or in the business cannot misrepresent his business as that of business of the prior right holder. That is the reason why essentially the prior user is considered to be superior than that of any other rights. Consequently, the examination of rights in common law which are based on goodwill, misrepresentation and damage are independent to that of registered rights. The mere fact that both prior user and subsequent user are registered proprietors are irrelevant for the purposes of examining who generated the goodwill first in the market and whether the latter user is causing misrepresentation in the course of trade and damaging the goodwill and reputation of the prior right holder/former user. That is the additional reasoning that the statutory rights must pave the way for common law rights of passing off.
32. Thirdly, it is also recognised principle in common law jurisdiction that passing off right is broader remedy than that of infringement. This is due to the reason that the passing off doctrine operates on the general principle that no person is entitled to represent his or her business as business of other person. The said Signature Not Verified action in deceit is maintainable for diverse reasons other than that of Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 30 of 60 Signing Date:31.05.2023 15:13:18 registered rights which are allocated rights under the Act. The authorities of other common law jurisdictions like England more specifically Kerly's Law of Trade Marks and Trade Names, 14th Edn., Thomson, Sweet & Maxwell South Asian Edition recognises the principle that where trade mark action fails, passing off action may still succeed on the same evidence. This has been explained by the learned author by observing the following:
"15-033. A claimant may fail to make out a case of infringement of a trade mark for various reasons and may yet show that by imitating the mark claimed as a trade mark, or otherwise, the defendant has done what is calculated to pass off his goods as those of the claimant. A claim in 'passing off' has generally been added as a second string to actions for infringement, and has on occasion succeeded where the claim for infringement has failed."
32.1. The same author also recognises the principle that the Trade Marks Act affords no bar to the passing off action. This has been explained by the learned author as under:
"15-034. Subject to possibly one qualification, nothing in the Trade Marks Act, 1994 affects a trader's right against another in an action for passing off. It is, therefore, no bar to an action for passing off that the trade name, get up or any other of the badges identified with the claimant's business, which are alleged to have been copies or imitated by the defendant, might have been, but are not registered as, trade marks, even though the evidence is wholly addressed to what may be a mark capable of registration. Again, it is no defence to passing off that the defendant's mark is registered. The Act offers advantages to those who register their trade marks, but imposes no penalty upon those who do not. It is equally no bar to an action for passing off that the false representation relied upon is an imitation of a trade mark that is incapable of registration. A passing off action can even lie against a registered proprietor of the mark sued upon. The fact that a claimant is using a mark registered by another party (or even the defendant) does not of itself prevent goodwill being generated by the use of the mark, or prevent such a claimant from relying on such goodwill in an action against the registered proprietor. Such unregistered marks are frequently referred to as 'common law trade marks'."
32.2. From the reading of the aforementioned excerpts from Kerly's Law of Trade Marks and Trade Names, it can be said that not merely it is recognised in India but in other jurisdictions also including England/UK (Provisions of the UK Trade Marks Act, 1994 are analogous to the Indian Trade Marks Act, 1999) that the registration is no defence to a passing off action and nor the Trade Signature Not Verified Marks Act, 1999 affords any bar to a passing off action. In such an Digitally Signed event, the rights conferred by the Act under the provisions of Section By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 31 of 60 Signing Date:31.05.2023 15:13:18 28 have to be subject to the provisions of Section 27(2) of the Act and thus the passing off action has to be considered independent "Iruttukadai Halwa" under the provisions of the Trade Marks Act, 1999.
33. Fourthly, it is also a well-settled principle of law in the field of the trade marks that the registration merely recognises the rights which are already pre-existing in common law and does not create any rights. This has been explained by the Division Bench of the Delhi High Court in Century Traders v. Roshan Lal Duggar & Co. [Century Traders v. Roshan Lal Duggar & Co., 1977 SCC OnLine Del 50 : AIR 1978 Del 250] in the following words: (SCC OnLine Del para 10) "10. '16. ... First is the question of use of the trade mark. Use plays an all-important part. A trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. Registration under the statute does not confer any new right to the mark claimed or any greater rights than what already existed at common law and at equity without registration. It does, however, facilitate a remedy which may be enforced and obtained throughout 'the State and it established the record of facts affecting the right to the mark. Registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the statute. Common law rights are left wholly unaffected.' [Ed.: As observed in L.D. Malhotra Industries v. Ropi Industries, 1975 SCC OnLine Del 172, para 16.] "
(emphasis supplied) 33.1. The same view is expressed by the Bombay High Court in Sunder Parmanand Lalwani v. Caltex (India) Ltd. [Sunder Parmanand Lalwani v. Caltex (India) Ltd., 1965 SCC OnLine Bom 151 : AIR 1969 Bom 24] in which it has been held vide AIR para 32 as follows: (SCC OnLine Bom paras 1 & 2) "1. A proprietary right in a mark can be ['Iruttukadai Halwa'] obtained in a number of ways. The mark can be originated by a person, or it can be subsequently acquired by him from somebody else. Our Trade Marks law is based on the English Trade Marks law and the English Acts. The first Trade Marks Act in England was passed in 1875. Even prior thereto, it was firmly established in England that a trader acquired a right of property in a distinctive mark merely by using it upon or in connection with goods irrespective of the length of such user Signature Not Verified and the extent of his trade, and that he was entitled to protect Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 32 of 60 Signing Date:31.05.2023 15:13:18 such right of property by appropriate proceedings by way of injunction in a court of law. Then came the English Trade Marks Act of 1875, which was substituted later by later Acts. The English Acts enabled registration of a new mark not till then used with the like consequences which a distinctive mark had prior to the passing of the Acts. The effect of the relevant provision of the English Acts was that registration of a trade mark would be deemed to be equivalent to public user of such mark. Prior to the Acts, one could become a proprietor of a trade mark only by user, but after the passing of the Act of 1875, one could become a proprietor either by user or by registering the mark even prior to its user. He could do the latter after complying with the other requirements of the Act, including the filing of a declaration of his intention to use such mark. See observations of Llyod Jacob, J. in Vitamins Ltd.'s Application, In re [Vitamins Ltd.'s Application, In re, (1956) 1 WLR 1 :
(1955) 3 All ER 827 : 1956 RPC 1] at RPC p. 12, and particularly the following: (WLR p. 10) '... A proprietary right in a mark sought to be registered can be obtained in a number of ways. The mark can be originated by a person or can be acquired, but in all cases it is necessary that the person putting forward the application should be in possession of some proprietary right which, if questioned, can be substantiated.'
2. Law in India under our present Act is similar."
(emphasis supplied) 33.2. We uphold the said view which has been followed and relied upon by the courts in India over a long time. The said views emanating from the courts in India clearly speak in one voice, which is, that the rights in common law can be acquired by way of use and the registration rights were introduced later which made the rights granted under the law equivalent to the public user of such mark. Thus, we hold that registration is merely a recognition of the rights pre-existing in common law and in case of conflict between the two registered proprietors, the evaluation of the better rights in common law is essential as the common law rights would enable the court to determine whose rights between the two registered proprietors are better and superior in common law which have been recognised in the form of the registration by the Act."
39. The superiority of the rights of a prior user to a registrant was also recognized by this Court in Jai Prakash Gupta v. Vishal Aluminium Mfg. Co., 1996 SCC OnLine Del 599, where it was held Signature Not Verifiedthat a prior user will have an advantage over a prior registrant of a Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 33 of 60 Signing Date:31.05.2023 15:13:18 trademark and in an action for passing off, prior registration is an irrelevant factor. This position of law has been affirmed by the Supreme Court in Satyam Infoway Ltd. v. Siffynet Solutions (P) Ltd., (2004) 6 SCC 145, wherein the Supreme Court held that an action of passing off not only preserves the reputation of the Plaintiff but also safeguards the public and if two trade rivals claim to assert rights, the question is 'who gets first?'. It is also held that it is not essential for the Plaintiff to prove long use to establish reputation in a passing off action and it would depend upon the volume of sales and extent of advertisement.
40. This brings me to a more recent and a landmark judgment of the Supreme Court in Neon Laboratories Limited (supra), where the Plaintiffs' asserted use of the trademark PROFOL in 1998 by their predecessor-in-interest and on the other hand, Defendant had applied for registration of its trademark ROFOL in 1992, the user however remained dormant for 12 years. The legal nodus before the Supreme Court was whether the prior registration would have the effect of obliterating the significance of goodwill that had been established by the Plaintiffs in the meantime, i.e. would a deeming provision, relating registration retrospectively, prevail on actuality-competing equities oscillating around prior registration and prior user. Referring to Section 34 of the Act, the Supreme Court observed that "first in the market" test has always enjoyed pre-eminence and I quote the relevant passages as follows:-
"9. Section 34 of the Trade Marks Act, 1999 (the Act) deserves reproduction herein:
"34. Saving for 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 Signature Not Verified identical with or nearly resembling it in relation to goods or Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 34 of 60 Signing Date:31.05.2023 15:13:18 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."
This section palpably holds that a proprietor of a trade mark does not have the right to prevent the use by another party of an identical or similar mark where that user commenced prior to the user or date of registration of the proprietor. This "first user" rule is a seminal part of the Act. While the case of the respondent-plaintiffs is furthered by the fact that their user commenced prior to that of the appellant-defendant, the entirety of the section needs to be taken into consideration, in that it gives rights to a subsequent user when its user is prior to the user of the proprietor and prior to the date of registration of the proprietor, whichever is earlier. In the facts of the case at hand, the appellant-defendant filed for registration in 1992, six years prior to the commencement of user by the respondent- plaintiffs. The appellant-defendant was, thus, not prevented from restraining the respondent-plaintiffs' use of the similar mark PROFOL, but the intention of the section, which is to protect the prior user from the proprietor who is not exercising the user of its mark prima facie appears to be in favour of the respondent- plaintiffs.
xxxx xxxx xxxx
11. We must hasten to clarify that had the appellant-defendant commenced user of its trade mark ROFOL prior to or even simultaneous with or even shortly after the respondent-plaintiffs' marketing of their products under the trade mark PROFOL, on the appellant-defendant being accorded registration in respect of ROFOL which registration would retrospectively have efficacy from 19-10-1992, the situation would have been unassailably favourable to it. What has actually transpired is that after applying for registration of its trade mark ROFOL in 1992, the appellant- defendant took no steps whatsoever in placing its product in the market till 2004. It also was legally lethargic in not seeking a curial restraint against the respondent-plaintiffs. This reluctance to protect its mark could well be interpreted as an indication that the Signature Not Verified appellant-defendant had abandoned its mark at some point during Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 35 of 60 Signing Date:31.05.2023 15:13:18 the twelve-year interregnum between its application and the commencement of its user, and that in 2004 it sought to exercise its rights afresh. It would not be unfair or fanciful to favour the view that the appellant-defendant's delayed user was to exploit the niche already created and built-up by the respondent-plaintiffs for themselves in the market. The "first in the market" test has always enjoyed pre-eminence. We shall not burden this judgment by referring to the several precedents that can be found apposite to the subject. In the interest of prolixity we may mention only N.R. Dongre v. Whirlpool Corpn. [N.R. Dongre v. Whirlpool Corpn., (1996) 5 SCC 714] and Milmet Oftho Industries v. Allergan Inc. [Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624] In Whirlpool [N.R. Dongre v. Whirlpool Corpn., (1996) 5 SCC 714] , the worldwide prior user was given preference nay predominance over the registered trade mark in India of the defendant. In Milmet [Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624] , the marks of pharmaceutical preparation were similar but the prior user worldwide had not registered its mark in India whereas its adversary had done so. This Court approved the grant of an injunction in favour of the prior user. Additionally, in the recent decision in S. Syed Mohiden v. P. Sulochana Bai [S. Syed Mohiden v. P. Sulochana Bai, (2016) 2 SCC 683 : (2015) 7 Scale 136] this Court has pithily underscored that the rights in a passing- off action emanate from common law and not from statutory provisions, nevertheless the prior user's rights will override those of a subsequent user even though it had been accorded registration of its trade mark. The learned counsel for the appellant-defendant has endeavoured to minimise the relevance of Whirlpool [N.R. Dongre v. Whirlpool Corpn., (1996) 5 SCC 714] as well as Milmet [Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624] by drawing the distinction that those trade marks had attained worldwide reputation. However, we think that as world shrinks almost to a global village, the relevance of the transnational nature of a trade mark will progressively diminish into insignificance. In other words, the attainment of valuable goodwill will have ever increasing importance. At the present stage, the argument in favour of the appellant-defendant that we find holds more water is that in both Milmet [Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624] and Whirlpool [N.R. Dongre v. Whirlpool Corpn., (1996) 5 SCC 714] , as distinct from the case before us, the prior user of the successful party predated the date of application for registration of the competing party. The question to examine, then, would be whether prior user would have to be anterior to the date of application or prior to the user by the appellant-defendant. In other words, the question before the Court would remain whether the situation on the date of application for registration alone would be relevant, or whether the developments in the period between this Signature Not Verified date and the date of grant of registration would have any bearing on Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 36 of 60 Signing Date:31.05.2023 15:13:18 the rights of the parties. All these considerations will be cast into a curial cauldron to be appreciated by the Court before which the suit is being contested. In these premises, we cannot conclude that a prima facie case has not been disclosed by the respondent-plaintiffs.
12. Since we are confronted with the legal propriety of a temporary injunction, we must abjure from going into minute details and refrain from discussing the case threadbare, in order to preclude rendering the suit itself an exercise in futility and the decision therein a foregone conclusion. All that we would say in the present appeal is that since the respondent-plaintiffs have alleged, and have prima facie supported with proof, that they had already been using their trade mark well before the attempted user of an identical or closely similar trade mark by the appellant-defendant, the former would be entitled to a temporary injunction, in light of the abovementioned "first in the market" test. We find that the respondent-plaintiffs have made out a prima facie case. The two other factors in an interim injunction, namely, the balance of convenience and an irreparable loss, are both in favour of the respondent-plaintiffs, given the potential loss of goodwill and business they could suffer should an injunction be denied. The appellant-defendant has been injuncted from using the mark ROFOL since 2005, after having launched products bearing the mark only in the previous year, so the balance of convenience is in favour of allowing the injunction to continue. In Milmet [Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624] , this Court had taken note of the fact that the unsuccessful litigating party had in the duration of the litigation started using another mark, and found that this would prima facie assume significance in assessing "irreparable loss"."
41. Coming to the facts of this case, Kent Cables adopted the trademark 'KENT' in 1984 and the first registration recognising the statutory rights of Kent Cables in the trademark was on 08.09.1986. Claim to user of the trademark 'KENT' with respect to fans goes back to 1984 in the plaint. Kent RO seriously disputed the user claim on the ground that there is no material on record to show sales commencing from 1984. To this extent, prima facie, the Court is in agreement with the contention raised by Kent RO. But what is not disputed is that Kent Cables has prior registration in the trademark for wires, cables, switches, etc. and the registration certificate is on record. Therefore, in Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 37 of 60 Signing Date:31.05.2023 15:13:18 terms of registration of the trademark, Kent Cables is prior in point of time than Kent RO, whose first registration in the device mark 'KENT OIL METERS' was in the year 1994 and the next registration was in the year 1999 for 'KENT R-O WATER MAKER'. Insofar as sales in fans are concerned, Kent RO was set to launch the fans in the year 2022 when CS(COMM) 596/2022 was filed by Kent Cables. On the other hand, Kent Cables has placed on record extensive material to prima facie evidence use of the trademark KENT for sale of fans commencing from the year 2006 and going up to 2022, when the suit was filed and illustratively, the documents include CA certificate; purchase invoices/sample invoices; packaging slips and shipment details showing sales on various online platforms such as Snapdeal, Just Buy, Flipkart, Amazon, etc.; Google search results for phrase 'Kent Fans' showing result only of Kent Cables' products; search results of Kent Fans on various third party e-commerce websites; screenshots from YouTube showcasing products being fans under the trademark 'KENT'; photographs of shops of dealers and distributors wherein fans are stored and sold across India; acceptance letter issued by Kendriya Police Kalyan Bhandar, Ministry of Home Affairs; approval from U.P. Public Works Department for delivery of products in 2021; approval from Bureau of Energy Efficiency, Ministry of Power in 2011; M.P. Public Works Department approval in 2013 for delivery of fans; vendor registration intimation sent by Chief Executive Officer, Mata Vaishno Devi Shrine Board in 2015; Article dated 21.11.2015 available on indiainfoline.com; invoices pertaining to advertisement on TV channel Zee News Asia in 2014; newspaper advertisement; Tenders issued by Central Bank of India for renovation Signature Not Verifiedin 2022, etc. Additionally, Kent Cables has also placed on record Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 38 of 60 Signing Date:31.05.2023 15:13:18 documents prima facie evidencing advertisement and promotions in the form of hoardings, catalogues, brochures dating back to 2011; advertisement invoices; screenshots of advertisements on Aaj Tak channel and Rajasthan Club.
42. Having perused the aforesaid documents at this prima facie stage, it is difficult for this Court to agree with the submissions of Kent RO that Kent Cables has not been able to substantiate its sales at least from the year 2006. On this aspect, the Court also takes note of the fact that in trademark jurisprudence, Courts have repeatedly held that it is not necessary that a trademark should have been used for considerable length of time and even a single actual use with intent to continue such use confers a right albeit a mere casual, intermittent or experimental use may be insufficient to show an intent to adopt the mark as a trademark for specific articles or goods. It is settled that in order to succeed at the prima facie stage, proprietor has to establish user of the trademark prior in point of time than the impugned use by the opponent. In this context, I may refer to a few passages from the judgment of this Court in Century Traders (supra) hereunder wherein reliance was placed on the judgment of the Bombay High Court in Consolidated Foods Corporation v. Brandon & Co. Private Limited, 1961 SCC OnLine Bom 55:-
"11. In Consolidated Foods Corporation v. Brandon and Co., Private Ltd., A.I.R. 1965 Bombay 35 (2), it was observed that "A trader acquires a right of property, in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. Registration under the statute does not confer any new right to the mark claimed or any greater rights than what already existed at common law and at equity without registration. It does, however, Signature Not Verified facilitate a remedy which may be enforced and obtained throughout Digitally Signed the State and it established the record of facts affecting the right to By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 39 of 60 Signing Date:31.05.2023 15:13:18 the mark. Registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the Statute. Common law rights are left wholly unaffected. Priority in adoption and use of a trade mark is superior to priority in registration.
12. For the purpose of claiming such proprietorship of a mark, it is not necessary that the mark should have been used for considerable length of time. As a matter of fact, a single actual use with intent to continue such use eo instanti confers a right to such mark as a trademark. It is sufficient if the article with the mark upon it has actually become a vendible article in the market with instent on the part of the proprietor to continue its production and sales. It is not necessary that the goods should have acquired a reputation for quality under that mark. Actual use of the mark under such circumstances as showing an intention to adopt and use it as a trade-mark is the test rather than the extent or duration of the use. A mere casual, intermittent or experimental use may be insufficient to show an intention to adopt the mark as a trade mark for specific article or goods...".
xxx xxx xxx
14. Thus, the law is pretty well-settled that in order to succeed at this stage the appellant had to establish user of the aforesaid mark prior in point of time than the impugned user by the respondents. The registration of the said mark or similar mark prior in point of time to user by the appellant is irrelevant in an action passing off and the merepresence of the mark in the register maintaned by the trade mark registry did not prove its user by the persons in whose names the mark was registered and was irrelevant for the purposes of deciding the application for interim injunction unless evidence had been led or was available of user of the registered trade marks. In our opinion, these clear rules of law were not kept in view by the learned Single Judge and led him to commit an error."
43. Kent Cables who is admittedly prior registrant of the trademark KENT has, in my prima facie view, succeeded in showing prior user and adoption of the trademark 'KENT' for fans and would be entitled to the benefit of the judgments of the Supreme Court in S. Syed Mohideen (supra), Neon Laboratories Limited (supra) and N.R. Dongre and Others (supra), wherein pre-eminence has been given to "prior user" and "first in the market" test. Very recently, a Division Signature Not VerifiedBench of this Court in H.S. Sahni v. Mukul Singhal and Another, Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 40 of 60 Signing Date:31.05.2023 15:13:18 2022 SCC OnLine Del 3772, has again reiterated the superior rights of a prior user relying on the aforementioned judgments.
44. Passing off is a common law remedy based on the ethos and principles that goodwill in the business must be protected against misrepresentation by the Defendant in the course of trade and it has been echoed in several judgments that assertion of the right in passing off is premised on the ground that no one has a right to represent his goods or services as that of someone else and even though misrepresentation may not be fraudulent or deliberate and be innocent, Courts would come to the aid and granted injunction. The essential characteristics/elements of the action of passing off have been brought out by Lord Diplock in Erven Warnink BV v. J. Townend & Sons (Hull) Ltd., [1979] 2 All ER 927 and it would be apposite to refer to them hereunder:
"(1) a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence), and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or in a quiatimet action will probably do so"
45. In the context of passing off, it needs a mention that Courts have always given great importance to the common law rights even where the rival goods are dissimilar, which is evident from the judgments which I shall advert to hereinafter. This being the emphasis on common law rights, the question arises whether Kent Cables is entitled to an injunction if it prima facie establishes passing off by Kent RO where the rival products are identical i.e. Fans. Before proceeding further, I may refer to few judgments on passing off. In Bata India Limited v. Pyare Lal & Co., Meerut City and others, 1985 Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 41 of 60 Signing Date:31.05.2023 15:13:18 SCC OnLine All 79, the Allahabad High Court was dealing with a case where Plaintiff was manufacturing shoes while Defendant was producing goods like foam and similar products. Rejecting the argument that there was no possibility of any deception on purchase of foam in the market, the Court observed:
"36. Great emphasis was laid by the learned counsel for the respondents on the underlined portion to say that there should be some similarity or correlationship between the two products. This argument is supplemented by another argument that the plaintiff was not producing any goods like foam or analogous product. Consequently, there was no question of any deception being practised on the purchaser of foam materials in the market. This argument loses sight of an important feature viz., how would a lay customer know in the first place that the plaintiff was not producing foam or foam material? How would the customers know that Bata were not producing foam? It is well known that the name represented makers of shoes and analogous products, but a question would also arise in the mind of the lay customers whether Bata were also producing foam. Who is going to answer this question? Does an ordinary customer ask the seller as to whose product it is? The answer generally is in the negative. He buys a thing on the basis of his own impression.
xxxx xxxx xxxx
40. With great respect, I regret my inability to subscribe to the view taken by the Calcutta High Court. Merely because the plaintiff in the present case is not producing foam is not enough to hold that there can be no passing off action in respect of the user of the name 'Bata' to the products marketed by the defendants. The user of the name or mark 'Bata' by the defendants is indicative of their intent. It appears that they desire to market their foam with a view to gain some advantage in a competitive market. As seen earlier, there is no plausible explanation as to why the name 'Bata' was being used by them. A passing off action would lie even if the defendants were not manufacturing or producing any goods similar to that of the plaintiff. A passing off action would lie where a misrepresentation is likely to be caused or a wrong impression created, as if the product was of someone else."
46. In Kirloskar Diesel Recon Pvt. Ltd. and another v. Kirloskar Proprietary Ltd. and others, 1995 SCC OnLine Bom 312, the Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 42 of 60 Signing Date:31.05.2023 15:13:18 Bombay High Court while dealing with a similar contention held as follows:
"13. The expression 'common field of activity' was coined by Wynne-Parry J. in McCulloch v. Levis A. May (Product Distributors) Ltd. popularly known as 'Uncle Mac' case reported in 65 RPC 58 in which he held that its presence or absence was conclusive in determining whether or not there was passing off. However, the requirement that a 'common field of activity' is conclusive in determining whether there can be passing off has been extensively criticised by Manning J. in the case of Henderson v. Radio Corp. Pty. reported in (1969) RPC 218 holding that it would be unsafe to adopt the view expressed in McCulloch v. Mary that what has been called a common field of activity must be established in every case to entitle the plaintiff to succeed. He further held that it is going too far to say that the absence of this so-called common field of activity necessarily bars a plaintiff from relief. With the passage of time, law on requirement of common field of activity in a passing off action has radically changed. There is no requirement for a common field of activity to found a claim in passing off. In Marage Studies v. Counter Feat Clothing Co. Ltd. reported in (1991) FSR 145, Browne Wilkison V-C said that the so-called requirement of the law that there should be a common field of activity is now discredited. The real question in each case is whether there is as a result of misrepresentation a real likelihood of confusion or deception of the public and consequent damage to the plaintiff. The focus is shifted from the external objective test of making comparison of activities of parties to the state of mind of public in deciding whether it will be confused....
14. In the case of trading name which has become almost a household word and under which trading name a variety of activities are undertaken, a passing off can successfully lie if the defendant has adopted identical or similar trading name and even when the defendant does not carry on similar activity. Even if the defendant's activities in such circumstances, are remote, the same are likely to be presumed a possible extension of plaintiff's business or activities...."
47. This judgment would be incomplete without referring to the judgment of the Supreme Court in Satyam Infoway Ltd. (supra) which applies squarely to the facts of the present case, both on the aspect of prior user and passing off action. It was held by the Supreme Court that an action for passing off is to restrain the Defendant for Signature Not Verifiedpassing off his goods or services to the public as that of the Plaintiff. It Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 43 of 60 Signing Date:31.05.2023 15:13:18 is an action not only to preserve the reputation of the Plaintiff but also to safeguard the public. In the context of 'prior user', the Supreme Court observed that the action is normally available to the owner of a distinctive trademark and the person who uses it. If two trade rivals claim to have individually invented the same mark, then the trader who is able to establish prior user will succeed. The Supreme Court further observed that the question is, who gets first, and it is not essential for the Plaintiff to prove long user to establish reputation in a passing off action and it would depend upon volumes of sales and extent of advertisement. In the context of misrepresentation in a passing off action, it was held that the word 'misrepresentation' does not mean that the Plaintiff has to prove mala fide intention of the Defendant. What has to be established is the likelihood of confusion in the minds of the public, i.e. actual or potential customers or users that the goods offered by the Defendant are goods of the Plaintiff, applying the test of imperfect recollection of a person with average intelligence. Emphasizing on the third element of passing off, the Supreme Court held that another facet of passing off is a likelihood of confusion with possible injury to the public and consequential loss to the Appellant. Similarity in 'name' may lead an unwary user to assume a business connection between the two rival parties and would result in a clear overlap of identical or similar services as in the said case, where the Respondent's brochure explicitly offered Intranet and Extranet solutions. The Supreme Court also observed that it may be difficult for the Appellant to prove actual loss with regard to nature of services and means of access but the possibility of loss in the form of diverted customers is more than reasonably probable.
Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 44 of 60 Signing Date:31.05.2023 15:13:1848. Tested in the light of the observations of the Supreme Court and looking at the material in support of goodwill brought on record by Kent Cables, there is every likelihood that a potential customer will be confused into thinking that the fans, if and when launched by Kent RO, are from the stable of Kent Cables. As noted above, Kent Cables has been selling fans at least from 2006 and its brochures are widely advertised apart from Google search results for the phrase Kent Fans showing only Kent Cables Fans in addition to search results on various third party websites. Permitting Kent RO, who has admittedly not been in the business of fans, to launch fans at this stage will prima facie lead to confusion amongst the potential customers of fans apart from diverting the clientele of Kent Cables and causing loss and injury and the confusion will be pronounced by the use of identical trademark 'KENT' by rival parties. Therefore, applying the principles culled out in Satyam Infoway Ltd. (supra), in my prima facie view, Kent Cables has been able to make out a case of passing off.
49. Another important facet that needs a mention at this stage is that Kent RO made strenuous efforts to demolish the case of Kent Cables that it has been selling fans over a long period and the argument was predicated on disputing the authenticity and genuineness of the vouchers, sales figures, CA certificates etc., filed by Kent Cables. At this stage, this argument cannot aid Kent RO as this would be a matter of evidence during trial. [Ref. Bloomberg Finance LP v. Prafull Saklecha & Ors., 2013 SCC OnLine Del 4159]
50. There is another aspect of the matter linked to the issue of prior user of Kent Cables. Mr. Sandeep Sethi, learned Senior Counsel appearing on behalf of Kent Cables had drawn the attention of the Signature Not VerifiedCourt to a legal notice dated 01.06.2011 sent by Kent RO to Kent Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 45 of 60 Signing Date:31.05.2023 15:13:18 Cables to cease and desist from using the trademark KENT for its Fans division. As rightly argued by Mr. Sethi, this in itself reflects that Kent RO was not only aware of the sales of Kent Cables in fans using the trademark KENT from the year 2011 and had referred to the brochures published by Kent Cables but is also an admission of the fact that Kent Cables was selling fans, if not from the period claimed by Kent Cables, but at least in close proximity and prior to 2011 and therefore it is not open to contest the prior user of trademark KENT by Kent Cables for fans or dispute the genuineness/authenticity of the documents pertaining to sales/advertisement.
51. The next and significant fall out of the legal notice sent by Kent RO to Kent Cables is that despite having knowledge of sales of fans at least from 2011, no steps were taken by Kent RO to take recourse to legal remedies over a prolonged period of 11 years, save and except, the present suit filed in the year 2022 being CS(COMM) No. 613/2022 and defending the suit filed by Kent Cables being CS(COMM) No. 596/2022. Prima facie, Kent RO has acquiesced in the sale of fans by Kent Cables over a span of 11 years and there is no reason why the status quo operating in favour of Kent Cables in respect of fans be disturbed at this stage at the behest of a party who has over the years allowed Kent Cables to sell the fans and increase their business and revenues. [Ref.: Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel and Others, (2006) 8 SCC 726.] Mr. Nayar, learned Senior Counsel had responded to this argument by stating that Kent RO is a big company and is not required to take action against each and every infringer unless the infringement is substantial and had relied on the judgments in India Hotels Company Signature Not VerifiedLtd. and Another v. Jiva Institute of Vedic Science & Culture, 2008 Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 46 of 60 Signing Date:31.05.2023 15:13:18 SCC OnLine Del 1758, Pankaj Goel v. Dabur India Ltd., 2008 SCC OnLine Del 1744 and Dr. Reddy's Laboratories Ltd. v. Reddy Pharmaceuticals Limited, 2004 SCC OnLine Del 668. Mr. Nayar had also submitted that Kent Cables has filed an application for registration of the trademark KENT in respect of various goods including fans to which an opposition was filed by Kent RO and therefore, post the opposition and receipt of the legal notice dated 01.06.2011, any sale by Kent Cables in fans was at its own risk and peril and no advantage can be claimed to set up a plea of prior user. This contention deserves to be rejected for manifold reasons. Firstly, on a factual matrix Kent Cables has averred in the application under Order XXXIX Rules 1 and 2 CPC in the suit filed by Kent Cables that the opposition was abandoned by the Registrar on account of time barred filing of evidence affidavit under Rule 50 of the Trade Marks Rules, 2002, however, on a writ petition filed by Kent RO, the matter was remanded back to the Trade Marks Registry. When the application was filed the matter was pending, however, the Court can take judicial notice of the fact from a search of the e-records of the Trade Marks Registry, as displayed on the ipindia.gov.in that by an order dated 28.12.2022, Deputy Registrar of Trade Marks has allowed the request of Kent RO for extension of time to file evidence affidavit and the matter is fixed for final hearing. The Court takes cognizance of the fact that the opposition proceedings are pending before the Trade Marks Registry and Kent RO cannot take aid of this fact to oppose an injunction. Secondly, this argument only goes against Kent RO and advances the case of Kent Cables that at least closer to 2011, it was known to Kent RO that Kent Cables was into selling fans and Signature Not Verifiedyet after over a decade it has chosen to launch fans with an identical Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 47 of 60 Signing Date:31.05.2023 15:13:18 trademark leading to a high possibility of confusion in the minds of the public and indicates an intent to misrepresent. Insofar as the argument that Kent RO had not taken action over the years against Kent Cables as it is not bound to sue any and every small infringer is concerned, to my mind, does not hold water. With the repute and sales of Kent Cables not only in fans but in cables, wires, switches, sockets etc., it can hardly be argued by Kent RO that Kent Cables was not a competitor or a force to reckon with. The volume of sales in fans alone is prima facie indicative of the reputation and goodwill of the Kent Cables in the said product. Repute of Kent Cables cannot be undermined is further underscored by the action of Kent RO in sending a legal notice in 2011 to Kent Cables to cease and desist from selling fans. This by itself is sufficient to show that even in Kent RO's own perception at that stage Kent Cables was not a small force and if the argument of Kent RO is to be accepted at the face value that Kent Cables is a small infringer, then it is not understood why Kent RO has filed a suit in 2022 to restrain them from selling fans, as even today, its case is that Kent Cables does not have substantial sales in fans. The arguments of Kent RO to say the least are self-destructive and cannot be accepted.
52. At this stage, reference is made to a judgment of a Co-ordinate Bench of this Court in Kent Ro System Ltd. and Another v. Gattubhai and Others, 2022 SCC OnLine Del 791, where suit was filed by Kent RO against the Defendants therein seeking injunction against sale of thermo flasks under the trademark KENT. Kent RO as Plaintiffs argued that the trademark was adopted in the year 1988 for petroleum products and in 1999 for water purifier systems. Kent RO diversified Signature Not Verifiedinto other home and kitchen appliances and the sales were humongous Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 48 of 60 Signing Date:31.05.2023 15:13:18 and various brand ambassadors endorsed their brand. Defendants therein urged that it had obtained registration of the trademark KENT in Class 07 as far back as on 26.03.2004 in respect of mixers, grinders etc. and fittings of these goods and had been in business since 1991 for Defendant No. 2 and since 1998 with respect to Defendant No. 3. Defendants sought to establish user of the trademark from 29.02.2004 and stated that since Defendants were 'prior user' of the trademark KENT for kitchen appliances and there was no likelihood of confusion, no case of passing off was made out.
53. After hearing the parties and examining the documents on record, the Court noted that the Defendants had placed reliance on Quality Control Certificate, Manufacturing Certificate, which prima facie demonstrated that they had been in business since 1991 and have been using the mark KENT at the very least from 2004. Documents produced also showed that the products of the Defendants with the mark KENT were being sold on certain third party websites as far back as in 2011. Relying on Satyam Infoway Ltd. (supra), the Court concluded that passing off action is based in common law to restrain a person from riding on the reputation and goodwill of another. The purpose is to prevent confusion and deception amongst consumers and public at large. Relying on the material placed on record by the Defendants, the Court concluded that Defendants were 'prior user' of the mark KENT with respect to the kitchen appliances and case of passing off was not made out. As the rival parties were registered proprietors, the Court held that provisions of Section 28(3) of the Act prevent the Plaintiffs from enforcing their statutory rights on the trademark KENT against the registered proprietor i.e. the Defendants, Signature Not Verifiedrelying on S. Syed Mohideen (supra). The Court also went into the Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 49 of 60 Signing Date:31.05.2023 15:13:18 question of acquiescence and relied on the judgment in M/s. Hindustan Pencils Private Limited v. M/s. India Stationary Products Co. & Another, 1989 SCC OnLine Del 34, wherein it was held that acquiescence means encouragement to use the infringing mark. Going into the narrative of facts and documents on record, the Court held that there was substance in the submission of the Defendants that Plaintiffs acquiesced to the use of the mark KENT by the Defendants. Plaintiffs did not have any issues with the Defendants using the mark till 2018 as both were using the said mark in respect of different goods. It is only in 2018 when Plaintiffs decided to launch products in the field of kitchen appliances that the use of KENT by the Defendants became problematic. In the present case also, Kent RO has had no issues with Kent Cables since 2011, the admitted year of gain of knowledge of sales of fans by Kent Cables until 2022, when they intended to launch fans and which is when they came in direct conflict and confrontation with Kent Cables. In my prima facie view, Mr. Sethi is right in his contention that Kent RO has acquiesced and it is not open to it to either launch the fans or to seek injunction against Kent Cables, who has been selling fans for nearly two decades. In view of the aforesaid, a prima facie case of passing off is made out by Kent Cables. Since this Court has held against Kent Cables and in favour of Kent RO that the former cannot sue the latter for infringement, the judgments cited on behalf of Kent RO i.e. Renaissance Hotel Holdings Inc. (supra), Faraway Foods Pvt. Ltd., (supra), Beiersdorf A.G. (supra) and Somany Ceramics Limited (supra), would be irrelevant to the controversy which is now in the realm of rival claims of the parties for passing off.
Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 50 of 60 Signing Date:31.05.2023 15:13:1854. In the suit filed by Kent RO, it seeks injunction restraining Kent Cables from selling various electrical items mentioned in the plaint including fans. Case of Kent RO with respect to fans is largely predicated on the submissions that: (a) Kent RO has registration for 'KENT' for various appliances under various classes including classes for electric appliances such as water purifiers, CCTV cameras and home/kitchen appliances such as mixers, grinders, juicers, blenders etc.; (b) Kent RO launched various home appliances including air purifier in 2006, kitchen appliances in 2014, vacuum cleaners in 2016 and CCTV cameras in 2018, for which invoices have been placed on record; (c) these appliances and fans are sold under the category of home appliances. Material placed on record in the form of major e- commerce platforms as well as brick and mortar stores shows common trade channels for home appliances, water purifiers and fans;
(d) documents on record include written confirmations from various retailers other than Vijay Sales to show sales of these classes of products from common trade channels and there is thus a trade connection between the goods sold by Kent RO and fans, which they intend to launch; (e) as per Nice Classification, goods such as water and air purifiers and fans fall under the same class i.e. Class 11 and pertinently in this classification a finished product is in-principle classified according to its function or purpose and while classification may not be the only determinative factor but is important in deciding similarity in the nature of goods; (f) Kent RO has total sales of appliances under the trademark KENT of over Rs.7,654 crores with marketing expenditure to the tune of Rs.1,106 crores with several brand ambassadors endorsing its products and is a recipient of several Signature Not Verifiedawards for the quality of its products since 2006. In purifiers, it has Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 51 of 60 Signing Date:31.05.2023 15:13:18 been one of the best sellers on all platforms and has gained extensive and formidable goodwill and reputation; and (g) Kent RO has been able to show actual confusion from Amazon printouts between Kent RO and Kent Cables with respect to fans.
55. Succinctly put, the argument is that all ingredients of Section 29(2)(a) of the Act are satisfied in the present case and a case of infringement is made out against Kent Cables even with respect to fans. Much was argued that wires and cables etc. sold by Kent Cables fall in Class 09 and applying the test in FDC Limited (supra), fans are not allied and cognate to the goods for which Kent Cables is registered. It was also urged that Kent Cables laboured hard to negate that all goods in Class 11 cannot be termed as allied and cognate only because they fall in the same class, however, this is not the case of Kent RO. Reliance was placed by Kent RO on the description of goods mentioned in Classes 09 and 11 only in aid of the argument that the nature, function and purpose of cables, wires etc. registered in favour of Kent Cables in Class 09 are dissimilar to the nature and function of fans which are classified in Class 11. Moreover, the entire object of the test of allied and cognate is to establish likelihood of confusion which need not be even gone into by the Court as there is demonstrably evidence on record to show actual confusion.
56. Both sides vehemently argued on the issue whether fans are allied to water/air purifiers and/or home/kitchen appliances and while Kent RO argued in favour, Kent Cables argued to the contrary. Having given a thoughtful consideration to this issue, in my view, this vexed issue need not detain this Court for the simple reason that even assuming at the highest in favour of Kent RO that fans are allied and Signature Not Verifiedcognate to the purifiers/home and kitchen appliances, this cannot take Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 52 of 60 Signing Date:31.05.2023 15:13:18 its case any further to claim infringement against Kent Cables for the fact that Kent RO has never utilized the trademark KENT for manufacture and sale of fans, save and except, the attempt to launch for the first time in the year 2022. Compared and contrasted with this, Kent Cables has been selling fans at least from 2006 and is a prior user for fans, a finding rendered in the earlier part of this judgment. Way-back in 2011, Kent RO admittedly knew of the sale of fans by Kent Cables and took no action to protect its interests with respect to fans. The fact situation as it stands today is that Kent Cables has been selling fans for over a decade and has humongous volumes of sale while Kent RO is yet to launch. Therefore, at this prima facie stage, the argument of allied and cognate cannot aid Kent RO.
57. Great emphasis was laid by Kent RO on the fact that fans fall in Class 11 under the Nice Classification, which is a Class in which the goods for which Kent RO is registered also fall such as water and air purifiers etc. while wires/cables etc. for which Kent Cables has registration, fall in a different Class i.e. Class 09. This contention prima facie merits rejection in view of the observations of the Court in FDC Limited (supra) that classification of goods and services under Section 7 of the Act is not the criteria for deciding the question of similarity in goods/services. I may refer to the relevant passages as follows:-
"51. .... The prime issue in this case, therefore, is whether the goods of the plaintiff and the services of the defendants are allied/cognate or not. Allied/cognate goods or services, as understood from the material referred to below, are those goods/services which are not identical, but can be said to be related or similar in nature (See McCarthy on Trademarks and Unfair Competition, Fourth Edition, Vol 5). The Shorter Oxford English Dictionary on Historical Principles Fifth Edition 2002, Vol. 1. defines the term "Allied" as "connected by nature or qualities;Signature Not Verified
having affinity" and the term "Cognate" as "akin in origin, nature Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 53 of 60 Signing Date:31.05.2023 15:13:18 or quality". Reference may also be made to New Webster's Dictionary and Thesaurus of the English Language, 1992 which defines "Allied" as "relating in subject or kind" and "Cognate" as "1. adj. having a common ancestor or origin (of languages or words) having a common source or root (of subjects etc.) related, naturally grouped together.". Cognate goods/services can be described, inter alia, as goods or services which have a trade connection - as in glucose and biscuits (See Corn Products Refining Co. v. Shangrila Food Products Ltd., AIR 1960 SC 142) or which are intended for the same class of customers - as in television picture tubes (parts thereof, video tapes and cassettes and television tuners etc.) and televisions, tuners and T.V. Kits (See Prakash Industries Ltd. v. Rajan Enterprises (1994) 14 PTC 31), or are complementary to each other - as in toothbrushes and toothpaste (See HM Sariya v. Ajanta India Ltd. (2006) 33 PTC 4).
52. In the present case, the plaintiff is using the registered mark 'Zifi' for goods falling under Class 05 of the Schedule of the Act i.e. pertaining to pharmaceutical preparations. On the other hand, the defendants are using the mark 'Ziffi' for booking of appointments for doctors, diagnostics, spas and salons, and have applied for registration under Class 35 and 42 of the Schedule of the Act. It is the submission of the defendant that goods and services falling under different classes cannot be allied and cognate. I do not find merit in this submission. The classification of goods and services under Section 7 of the Act is not the criterion for deciding the question of similarity in goods/services. Reliance may be placed on K.C. Kailasam/Ramu Vedaraman's Law on Trade Marks & Geographical Indications 1st Edition, 2003 wherein, the learned author on Page 180 has stated as under-
"Classification of goods given in the rules not the criterion Whether or not two sets of goods or services are of the same description is not be decided on the basis of the classification of goods and services given in the 4th schedule to the Trade Marks Rules, 2002. The description of goods may be narrower or wider than any of the classes according to the circumstances of the case. As was observed by LINDLEY J., in the Australian Wine Importers Trade Mark case [(1889) 6 RPC 311]. "If you come to look at that classification, you will find goods of the same description, in one sense, in different classes; and you will find goods of different description in the same class"."
58. This Court takes strength on this issue from the judgment of this Court in Sona Spices Pvt. Ltd. v. Soongachi Tea Industries Pvt. Ltd., Signature Not Verified2006 SCC OnLine Del 1890, as the facts and legal issue in the said Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 54 of 60 Signing Date:31.05.2023 15:13:18 case comes close to the present case. In Sona Spices Pvt. Ltd. (supra) Plaintiff i.e. Sona Spices Private Ltd. filed a suit against M/s. Soongachi Tea Industries Pvt. Ltd. seeking permanent injunction restraining the latter from using the trademark 'Sona' or any other similar trademark so as not to infringe Plaintiff's registered trademark. A cross-suit was filed by M/s. Soongachi Tea Industries Pvt. Ltd. restraining Sona Spices in respect of tea or any other beverage under its registered trademark 'Sona'. Sona Spices contended that it has been selling spices since 1975 and in 1993 it expanded its business to various other items including tea. It was surprised to receive a notice dated 03.02.2004 from Soongachi Tea alleging that Sona Spices was violating the trademark in respect of tea manufactured by Soongachi Tea. Case of Sona Spices was predicated on prior user of the trademark 'Sona' for spices and the allied and cognate nature of tea which it sold from 1993. While Soongachi Tea contended that it was using 'Sona' in respect of tea manufactured by it since 1978-1979 and had huge sales and was a prior user of 'Sona' in respect of tea.
59. After examining the respective contentions, the Court held as follows:-
"12. I am not satisfied that the Plaintiff has made out a prima facie case for interference. Even though the Plaintiff may be entitled to say that its use of the trademark 'Sona' can extend beyond spices to other cognate and allied goods such as tea, the fact remains that the Plaintiff has not utilized this trademark for the manufacture of tea prior to 1993 as per its own averment. On the other hand, the Defendant has been manufacturing and marketing Sona tea since some time in 1978-79 and in any case since it got the 'Sona' trademark registered on 23rd June, 1983, which is a good ten years before the user of the trade name 'Sona' in respect of tea by the Plaintiff. Despite this, the Plaintiff has taken absolutely no steps to protect its interests in respect of the trademark 'Sona' in regard to the manufacture and sale of tea.Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 55 of 60 Signing Date:31.05.2023 15:13:18
13. Another reason why I am of the view that the Plaintiff has not been able to make out a prima facie case for the grant of an interim injunction is that the sale figures projected by the Plaintiff are quite insubstantial in comparison to the sale figures of the Defendant in respect of Sona tea. According to the Defendant, it has now reached a sale figure of Rs. 12 crores per annum and this averment has not been denied by the Plaintiff. The Plaintiff does not claim to have such substantial sales of Sona tea.
14. For the above reasons, I am of the view that the Plaintiff has not made out any prima facie case for interference while the Defendant has made out a prima facie case for the grant of an interim injunction as prayed for.
15. Insofar as the question of irreparable harm and injury is concerned, the primary business of the Plaintiff appears to be in the sale of spices. It has not made any massive sales of Sona tea. On the other hand, the Defendant has a well established business in the manufacture and sale of Sona tea which has been continuing for more than 20 years, if not close to about 30 years. If the Defendant is now restrained from carrying on its business, it will, quite naturally, cause irreparable harm and damage to the Defendant. On the other hand, the loss of business in respect of Sona tea will not dent the business activities of the Plaintiff.
xxx xxx xxx
17. It may be noted that it is not as if the Defendant is trying to pass off its goods as those of the Plaintiff. The Defendant is an independent manufacturer of tea and is an established player in the market. There is nothing to suggest, at least so far, that any person has been misled into believing that the tea sold by the Defendant is actually being passed off as the tea manufactured by the Plaintiff. Indeed, from the facts presented before me, it appears that such an eventuality is quite unlikely. The Plaintiff has a limited territorial market even in respect of spices and there is nothing to suggest that tea manufactured by the Plaintiff is well recognized even within the existing market of the Plaintiff. Therefore, the question of any consumer being misled into believing that tea manufactured by the Defendant is actually being passed off as tea manufactured by the Plaintiff would not arise, particularly in the absence of any evidence in this regard.
18. Insofar as the question of balance of convenience is concerned, I am of the view that even assuming the Plaintiff has some prior right over the use of the trademark 'Sona' in respect of tea, the fact that the Plaintiff has not exercised its right for several years completely dis-entitles it to the grant of any interim relief. Of course, this dos not mean that the Plaintiff may not succeed in the Signature Not Verified event it is able to prove its case after leading evidence but until than, Digitally Signed there does not appear to be any cogent reason to grant any interim By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 56 of 60 Signing Date:31.05.2023 15:13:18 injunction in favour of the Plaintiff and against the Defendant while the converse appears to be more reasonable. It was submitted that even the Defendant has woken up after ten years to the fact that the Plaintiff was selling Sona tea and, therefore, the balance of convenience does not lie in favour of the prayer of the Defendant being granted. Of course, there can be no absolute standard for determining the balance of convenience but the facts of the case do suggest, prima facie, that given the relatively smaller turnover of the Plaintiff in respect of the sale of Sona tea and the limited territory, it is quite possible that the Defendant came to know about the sale of Sona tea by the Plaintiff only in 2003-2004 and it immediately sent a notice to the Plaintiff on 3rd February, 2004. Therefore, on the one hand, there is a situation where the Defendant came to know, though a little late, that its trademark was being infringed and it took immediate action in that regard and, on the other hand, there is a situation where the Plaintiff did not even know that its trademark was being infringed. That being the position, it would be more appropriate, I think, to conclude that the balance of convenience would lie in favour of the prayer of the Defendant being granted rather than that of the Plaintiff.
19. Under the circumstances, while dismissing IA No. 1758/2004 filed by the Plaintiff, I would allow IA No. 2798/2004 filed by the Defendant and restrain the Plaintiff from marketing tea under the trade name 'Sona' until the decision of both the suits."
60. The facts of this case completely fit into the aforementioned case. It is true that Kent Cables does not have registration for fans and the application seeking registration is pending, however, it has been a prior user while Kent RO, on the other hand, has not used its trademark for manufacture and/or sale of fans since 1999, when it stepped into the manufacture and sale of water purifiers and inspite of knowledge of sale of fans by Kent Cables at least in 2011, took no steps to protect its interests. In this view of the matter, the judgment relied on in Laxmikant V. Patel (supra), dealing with legitimate expansion will not help Kent RO.
61. Insofar as the claim of Kent RO with respect to passing off its goods by Kent Cables is concerned, Kent Cables has been in the Signature Not Verifiedmarket of fans for over a decade and save and except, a stray incident Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 57 of 60 Signing Date:31.05.2023 15:13:18 here or there alleging actual confusion, no substantial material has been placed on record by Kent RO in this regard. As for the reference to certain comments by some alleged purchasers on the Amazon website, at this stage, this cannot be taken as a proof of actual confusion and as rightly pointed out by Kent Cables, it is only a self- serving document and in fact, there is a likelihood of reverse confusion based on Amazon listing of fans for Kent Cables which gives link to Kent RO's page. The two comments placed on record in the form of screenshots, cannot lead to a conclusion that there is actual confusion as against a huge volume of sales of fans over the years by Kent Cables and/or the authenticity of this document would also require to be tested during trial.
62. Having examined all the contentions of the respective parties and seen holistically, in my view, Kent Cables has made out a case of prior user and passing off by prima facie establishing its reputation and goodwill, confusion likely to be caused amongst the public if Kent RO sells its fans, considering the identity in the trademark KENT and the resultant damage to its reputation. In Wander Ltd. and Another v. Antox India P. Ltd., 1990 (Supp) SCC 727, the Supreme Court held that passing off is a species of unfair trade competition or of actionable unfair trading and in S. Syed Mohideen (supra) and Neon Laboratories Limited (supra), the Supreme Court underscored that rights in passing off emanate from the common law and prior users' rights will override those of subsequent user, even where he would have been accorded registration of its trademark. It cannot be overlooked at this stage that Kent RO has remained dormant for years together with respect to the user of its mark KENT in fans and in the Signature Not Verifiedinterregnum, Kent Cables has increased its sales considerably. What is Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 58 of 60 Signing Date:31.05.2023 15:13:18 the extent of sales of Kent Cables as well as the supineness of Kent RO in remaining dormant, would be a matter of evidence during the trial of the suit. The balance of convenience lies in favour of Kent Cables which has developed a well-established business in manufacture and sale of fans and has been continuing for over 15 years and if Kent Cables is now restrained from selling fans, it would result in irreparable harm and injury while on the other hand, Kent RO was yet to launch the fans in 2022 and in any case has its prime business in purifiers, home appliances etc. and a restraint on launching fans would not create any dent in its business at this stage. In Wander Ltd. and Another (supra), the Supreme Court laid down the guiding principles for deciding an application for grant of interlocutory injunction and in this context observed that at this stage the existence of legal right asserted by the Plaintiff and its alleged violation are both contested and remain uncertain till they are established at the trial after leading evidence. Relevant para is as follows:-
"9. Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated "...is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the 'balance of convenience' lies."Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 59 of 60 Signing Date:31.05.2023 15:13:18
The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."
63. For the several and myriad reasons as aforementioned, this Court comes to an irresistible conclusion that at this prima facie stage, balance of convenience lies in favour of Kent Cables rather than Kent RO. Accordingly, I.A. 13851/2022 filed by Kent Cables is allowed to the extent of permanently restraining Kent RO, its directors, members, employees, agents, associates, servants and representatives and all other persons including a Body Corporate on their behalf from manufacturing and selling fans under trademark KENT, directly or indirectly, amounting to passing off their goods as those of Kent Cables, during the pendency of the suit. I.A. 14316/2022 filed by Kent RO for restraining Kent Cables from selling fans is dismissed.
64. No further orders are being passed with respect to remaining products which are referred to in the reliefs claimed in the applications but were not pressed during the hearing.
65. Both IAs stand disposed of making it clear that the observations and opinion of the Court in the present judgment are only tentative and prima facie and will have no bearing on the final adjudication of the suit.
JYOTI SINGH, J MAY 30 2023/shivam Signature Not Verified Digitally Signed By:KAMAL KUMAR CS(COMM) 596/2022 and connected matter Page 60 of 60 Signing Date:31.05.2023 15:13:18