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Pax Technology Limited vs Pax Technologies Private Limited & Anr on 16 September, 2022

Author: Jyoti Singh

Bench: Jyoti Singh

                          $~17
                          *    IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +     CS(COMM) 643/2022
                                PAX TECHNOLOGY LIMITED                ..... Plaintiff
                                            Through: Mr. Vijay Pal Dalmia and Mr. Rajat
                                            Jain, Advocates.

                                                    versus

                                PAX TECHNOLOGIES PRIVATE
                                LIMITED & ANR.                                     ..... Defendants
                                              Through: None.

                                CORAM:
                                HON'BLE MS. JUSTICE JYOTI SINGH
                                                    ORDER

                          %                         16.09.2022
                          I.A. 15173/2022 (Exemption)

1. Subject to the Plaintiff filing originals, clearer copies and documents with proper margins, which it may seek to place reliance on, within four weeks from today, exemption is granted.

2. Since there is an urgency in the matter and the same is being heard today, Plaintiff is exempted from serving advance notice on Defendants.

3. For the reasons stated in the application, the same is allowed and disposed of.

CS(COMM) 643/2022

4. Let plaint be registered as a suit.

5. Upon filing of process fee, issue summons to the Defendants, through all permissible modes, returnable on 09.12.2022 before the learned Joint Registrar.

6. Summons shall state that the written statement shall be filed by the Defendants within 30 days from the receipt of summons. Along with the written statement, Defendants shall also file an affidavit of admission/denial of the documents filed by the Plaintiff.

7. Replication be filed by the Plaintiff within 15 days of the receipt of the written statement. Along with the replication, an affidavit of admission/denial of documents filed by the Defendants, shall be filed by the Plaintiff.

8. If any of the parties wish to seek inspection of any documents, the same shall be sought and given within the timelines. I.A. 15172/2022 (Under Order 39 Rules 1 and 2 CPC, by Plaintiff)

9. Present application has been preferred by the Plaintiff under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 for grant of an ex-parte ad-interim injunction.

10. Issue notice to the Defendants through all prescribed modes, returnable on 27.01.2023.

11. Plaintiff has filed the present suit for restraining the Defendants from using the trademark 'PAX', and the logo ('PAX Trademarks') amounting to infringement and passing off as well as for rendition of accounts etc.

12. It is averred that Plaintiff is a company registered and incorporated under the laws of Hong Kong and is principally engaged in manufacturing, marketing and sale of secure electronic payment acceptance systems, 'Point- of-sale' hardware terminals and related software.

13. It is averred that HI SUN Limited vide a Trademark License Agreement dated 01.12.2010, granted an exclusive license to PAX Global Technology Ltd. ('PGTL') to use the trademarks 'PAX', and the logo throughout the world, as corporate logo/identity/trademarks, for the goods and services falling under Classes 09 and 42 including for the 'Spin-Off Business' and further authorized PGTL to sub-license the PAX trademarks to its subsidiaries.

14. It is further averred that PGTL vide an agreement dated 10.12.2010 granted a sub-licence to one of its subsidiaries, Plaintiff, to use the PAX Trademarks, throughout the world, for goods and services falling under classes 09 and 42 and also granted a sub-licence to another subsidiary, PAX Computer Technology (Shenzhen) Limited, a wholly-owned subsidiary Company of the Plaintiff.

15. It is pleaded that the trademark is registered in India in Class 09 in the name of PAX Computer Technology (Shenzhen) Limited, who also has registrations in the said mark in many jurisdictions across the globe. The PAX Trademarks are stated to be well-known world over and have acquired distinctiveness so much so they are solely and exclusively associated with the Licensor and the Licensees.

16. It is further pleaded that Defendant No. 1 is a company and is engaged in the business of marketing, sale, project management etc. of POS terminals Signature Not Verified Digitally Signed CS(COMM) 643/2022 Page 3 of 6 By:KAMAL KUMAR Signing Date:22.09.2022 20:07:30 and services in India, Sri Lanka and Pakistan and Defendant No. 2 is its Promoter and Director. On 03.10.2012, an Independent Consultant Agreement was entered into between Defendant No. 2 and Global POS Services Limited (GPS), whereby Defendant No. 2 was appointed to sell and promote Plaintiff's product, primarily in India and thus, Plaintiff's POS Terminals became available in India. On 01.01.2013, a Master Distribution Agreement was entered into between the Plaintiff and GPS and GPS was appointed to manage the network of payment system integrators.

17. It is averred that in the year 2013, Defendant No. 2 persuaded Plaintiff into incorporating Defendant No. 1's Company under the trademark 'Pax' as a front Company for business in India. Plaintiff permitted the Defendants to use the trademark(s), trading style(s), logo(s) etc., believing that the same would bridge a nexus and connectivity between the Plaintiff and the Defendants and this was followed by execution of Master Distribution Agreement on 01.11.2014. Pursuant thereto, GPS would place purchase orders on the Plaintiff, who would manufacture the products under the PAX Trademarks and supply the same to the Defendants for distribution in India.

18. It is further averred that as large amounts remained outstanding towards the Plaintiff, it was constrained to terminate the agreements in 2017 and also filed a suit in this Court being CS(COMM) 393/2019 against the Defendants, for recovery of the outstanding amounts, which is pending. Plaintiff has also filed an application in the suit under Order II Rule 2 CPC seeking relief to file a separate suit for enforcement of intellectual property rights, which was allowed vide order dated 01.08.2019. The trigger of the present suit is the fact that even after termination of business relationship between the Plaintiff and the Defendants, the Defendants continue to use Pax Signature Not Verified Digitally Signed CS(COMM) 643/2022 Page 4 of 6 By:KAMAL KUMAR Signing Date:22.09.2022 20:07:30 Trademarks inter alia in their communications, correspondence, stationery, corporate name, advertisements and other material and also use the same as their trademark.

19. It is contended by the learned counsel for the Plaintiff that there is no authorization by the Plaintiff permitting the Defendants to use the Pax trademarks and despite repeated attempts by the Plaintiff calling upon the Defendants to cease and desist from using the trademarks, they are intentionally, wilfully and unlawfully using the same for illegal gains.

20. It is also contended that the continued use of the PAX Trademarks by the Defendants in their communications etc. as well as their trade name/corporate name even after the end of business relationships with the Plaintiff, is only with a view to encash upon the immense reputation and goodwill of the Pax trademarks and misrepresent to the public that Defendants have an association with the Plaintiff. The impugned action of the Defendants, therefore, violates the common law rights of the Plaintiff and amounts to passing off.

21. Learned counsel further submits that the Defendants are illegally using the domain name https://www.paxtechnologies.in/, comprising the word/trademark Pax and the intention is clearly to create confusion amongst the customers and deceive them.

22. Having heard learned counsel for the Plaintiff, this Court is of the view that Plaintiff has made out a prima facie case for grant of ex parte ad- interim injunction. Balance of convenience lies in favour of the Plaintiff and it is likely to suffer irreparable harm in case the injunction, as prayed for, is not granted.

23. Accordingly, Defendants and their representatives, promoters, directors, partners, family members, franchise(s), distributors, dealers, retailers, servants, agents, affiliates, employees, successor in title and any other person acting, for or on their behalf, or under their authority, are restrained from using the trademark 'PAX', and the logo and/or passing off their goods or services under the trademarks 'PAX' and the logo or any other deceptively similar word or mark as a part of Defendants' trade name or corporate name or domain name or trademark or in any other manner, till the next date of hearing.

24. Plaintiff shall comply with the provisions of Order 39 Rule 3 CPC within ten days from today.

25. Copy of the order be given dasti to learned counsel for the Plaintiff.

JYOTI SINGH, J SEPTEMBER 16, 2022/rk/shivam Signature Not Verified Digitally Signed CS(COMM) 643/2022 Page 6 of 6 By:KAMAL KUMAR Signing Date:22.09.2022 20:07:30