Calcutta High Court
Tushar Saraff & Anr vs Manish Kumar Jain & Ors on 8 August, 2024
OCD-1
IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE
COMMERCIAL DIVISION
IA No. G.A. (Com) 1 of 2024
In
I.P. (COM) No. 21 of 2024
TUSHAR SARAFF & ANR.
-VS-
MANISH KUMAR JAIN & ORS.
BEFORE:
The Hon'ble JUSTICE KRISHNA RAO
Hearing Concluded On : 05.08.2024
Order On : 08.08.2024
Appearance:
Mr. Ranjan Bachawat, Sr. Adv.
Mr. Debnath Ghosh, Adv.
Mr. Biswaroop Mukherjee, Adv.
Ms. Vaibhavi Pandey, Adv.
Mr. Shaunak Mitra, Adv.
... For the plaintiffs/petitioners.
Mr. S.K. Bansal, Adv.
Mr. Sayantan Basu, Adv.
Mr. Somenath De, Adv.
Mr. Tanmoy Roy, Adv.
... For the defendant/respondent nos. 1 and 2.
Mr. S. Roy Choudhury, Adv.
Mr. K.K. Pandey, Adv.
Mr. S. Sen, Adv.
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Mr. M. Mukherjee, Adv.
Ms. Enakshi Saha, Adv.
... For the defendant/respondent no. 3.
Mr. Soumya Roy Chowdhury, Adv.
Mr. S. Ganguli, Adv.
... For the defendant/respondent no. 4.
ORDER
1. The plaintiff has filed the present application for grant of ad interim injunction against the defendant nos. 1 and 2. The predecessor-in- interest of the petitioners i.e. Rajesh Kumar Saraff (now deceased), had been carrying on business in the partnership in the name of style of "M/s. J.J. Electrical Industries" and "M/s. J. J. Electrical Corporation".
2. On 14th May, 2013, the members of the Saraff family i.e. Anoop Kumar Saraff, Amit Kumar Saraff, Rajesh Kumar Saraff (since deceased), Pravin Kumar Saraff, Prabhat Kumar Saraff, Purushottam Lal Saraff, Prabhu Shankar Saraff, Pramod Kumar Sarff and Pradeep Kumar Saraff all being the lineal descendants from a common ancestor had entered into a family arrangement in terms of the family settlement.
3. The respondent nos. 1 and 2 are engaged in the business of manufacturing switches, adapters, plugs and other allied products. On 10th March, 2014, the partnership firm M/s. J.J. Electrical Industries, Kolkata in which the respondent nos. 3 and 4 are the partners filed an application for removal of the identical or deceptively similar trademark "JJ DELUXE (LABEL)" of the respondent no. 2, illegally and wrongfully registered under No. 1201904.
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4. During the lifetime of Late Rajesh Kumar Saraff, the respondent nos. 1 and 2 suffered a decree in Suit No. 215 of 2014 (M/s. J.J. Electrical Industries, Kolkata -vs- M/s. Mahavir Prashad Jain & Ors.) filed before the Hon'ble High Court at Delhi. In the said compromise decree, the rights of the parties in relation to various "JJ" formative marks including "JJ DELUXE" stood decided and the respondent nos. 1 and 2 surrendered to the intellectual property rights of the petitioners in relation to the mark "JJ DELUXE". The applicant in the rectification proceeding before the IPAB, i.e. M/s. J.J. Electrical Industries, Kolkata, therefore, had chosen to withdraw the rectification application.
5. The father of the petitioners, namely, Rajesh Kumar Saraff died on 7th December, 2016 after the death of the father of the petitioners, the respondent nos. 3 and 4 had purported to wrongfully and illegally oust the petitioners from the partnership firm, namely, M/s. J.J. Electrical Corporation. Immediate intervention of the petitioner nos. 1 and 2 and the members of the Saraff and other well-wishers, the respondent nos. 3 and 4 inducted the petitioner nos. 1 and 2 into the partnership firm being the son of the Rajesh Kumar Saraff (since) deceased into the partnership firm M/s. J.J. Electrical Corporation. In place of their father having 33.34% shares in the partnership business.
6. The petitioners along with the respondent nos. 3 and 4 entered into a reconstituted partnership business under the name and style of "M/s. J.J. Electrical Industries" and "M/s. J.J. Electrical Corporation". The petitioners and the respondent nos. 3 and 4 decided that the partners 4 of partnership of M/s. J.J. Electrical Corporation and M/s. JJ Electrical Industries and the petitioners would be entitled to the undivided right, title and interest in respect of the marks "JJ DELUXE"
and "JJ" Marks.
7. The petitioner nos. 1 and 2 came together to form a new partnership business to be carried on in the name and style of "JJRS Enterprise". The petitioners and the respondent nos. 3 and 4 agreed that the Trademark "JJ DELUXE" bearing the Registration No. 342575 in Class 9 and Registration No. 632575 in Class 9 would be jointly owned by the petitioners and the respondent nos. 3 and 4. It is also agreed that the respondent no. 2 would be permitted to manufacture switch gear items such as Bus Bars, Change Overs, Main Switches, Other Switches, Fuse Units, MCBs, D.B. Boxes under the marks "JJ DELUXE" and "JJ CLASSIC" on behalf of the petitioners for the sole consumption of the petitioner nos. 1 and 2. It was also agreed that the respondent no. 2 would be permitted to supply the finished goods under the mark "JJ DELUXE" to the petitioners and the respondent nos. 3 and 4 failing which, the license granted by the petitioners to the respondent no. 2 would be cancelled. It was also agreed that the respondent no. 2 would not sell the products with the aforementioned brand name to any other party on a PAN India basis.
8. As regard the application for removal of the identical and deceptively similar trademark "JJ DELUXE (LABEL)" of the respondent no. 2 pending before the IPAB, the Learned IPAB by an order dated 12th 5 February, 2018, recorded that the applicant had chosen to withdraw the rectification application on the basis of the compromise decree passed in CS (OS) No. 215 of 2014.
9. On 13th July, 2018, the petitioners and the respondent no. 4 agreed that the petitioners would permit the respondent no. 4 to manufacture switch gear items such as Bus Bars, Change Overs, Main Switches, other Switches, Fuse Units, MCBs, D.B. Boxes under the marks "JJ DELUXE" and "JJ CLASSIC" on behalf of the petitioners for the sole consumption of the petitioners.
10. The petitioner no. 1 representing M/s. JJRS Enterprises entered into an agreement dated 14th October, 2020 with the respondent no. 1 permitting the respondent to manufacture and supply various products under the mark "JJ DELUXE" exclusively for use and consumptions of the petitioners from the respondent no. 1 to the petitioners, upon payment of valuable consideration for a period of 10 years with effect from 14th October, 2020 to 14th October, 2030. Under the said license agreements, the respondent nos. 1 and 2 have unequivocally accepted the right, title and interest of the petitioners in the mark "JJ DELUXE".
11. The petitioners' dealers and distributors had intimated the petitioners i.e. the respondent nos. 1 and 2 are selling electrical gears/ switch gears and other allied products which are deceptively similar and identical to the products of the petitioners without the mark "JJRS Enterprise" and is purporting to market the same by indicating that the 6 same is originating from the respondent nos. 1 and 2. Immediately, the petitioners have contacted the respondent nos. 1 and 2 who are the licensees of the petitioners. The respondent nos. 1 and 2 intimated the petitioners that the respondent nos. 1 and 2 had independent rights over the mark "JJ DELUXE" and forwarded to the petitioners. The respondents are purporting to accept that they are allegedly acquired rights over the mark "JJ DELUXE" and the petitioners as well as their dealers and distributors are not entitled to sell, market and distribute the product under the mark "JJ DELUXE", the petitioners instructed their trademark attorney to cause a trademark search on the portal of the Trade Mark Registry. The petitioners came to know that the respondent no. 1 in Form TM-A of the Trade Marks Act, 1999, filed an application seeking registration of device/label mark "JJ DELUXE Label" for electrical goods in Class 9 with a user claim from 1st January, 2021.
12. Mr. Ranjan Bachawat, Learned Senior Advocate, representing the petitioners submits that the respondent nos. 1 and 2 are seeking to wrongfully and illegally assert rights in relation to the marks "JJ" and "JJ DELUXE" instead of withdrawing the registration subsequent to the compromise decree, as had been agreed by the respondent nos. 1 and
2.
13. Mr. Bachawat submits that the application for the trademark under number 1201904 has been associated with trademark under number 834642, which the respondent nos. 1 and 2 have withdrawn, and in 7 view thereof, the said mark under number 1201904 is also deemed to have been withdrawn.
14. Mr. Bachawat submits that the respondent nos. 1 and 2 have duly acknowledged that the petitioners and their family members are prior users and registered proprietors of the "JJ" formative marks and as well as the trade mark "JJ DELUXE", and have undertaken not to claim any proprietary right in relation to such trademarks.
15. Mr. Bachawat submits that the action of the respondent nos. 1 and 2, in applying for the registration of an identical and deceptively similar mark "JJ DELUXE (Label)" claiming proprietary rights in relation thereto, is not only wrongful and illegal but also duplicitous and contradictory to their own promise and undertaking before the Court of law, and is an act of trespass into the petitioners rights in relation to its "JJ DELUXE" and "JJ" formative marks, and in the event the respondent nos. 1 and 2 are permitted to trespass and trammel onto the intellectual property rights of the Petitioners, the same would lead to a dilution of the petitioners goodwill and reputation in relation to its "JJ DELUXE" and "JJ" formative marks.
16. Mr. Bachawat submits that while perusing the impugned application and the documents uploaded in support of the same, the advocates for the petitioners came across a reference to a purported co-existence agreement dated 25 July, 2023.
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17. Mr. Bachawat submits that by way of the said purported agreement dated 25 July, 2023, it appears that the respondent nos. 3 and 4 have wrongfully and illegally, surreptitiously and clandestinely conferred upon the respondent no. 1 an unfettered right for the use and exploitation of the trade mark "JJ DELUXE" [Word per se and stylized).
18. Mr. Bachawat submits that the purported co-existence agreement is a forged and fabricated document and an outcome of fraud, and is liable to be delivered up and cancelled.
19. Mr. Bachawat submits that despite having knowledge of the petitioners' right, title and interest in relation to the mark "JJ DELUXE", and despite unequivocally accepting and agreeing in the agreement dated 14 October, 2020 that the petitioners are the absolute owner of the trademark "JJ DELUXE" and the respondent nos. 1 and 2 shall not supply the products under the mark "JJ DELUXE" or under any other "JJ" brand to anyone else, the respondent nos. 1 and 2 have purported to obtain a co-existence agreement to the exclusion of the petitioners on 25 July, 2023, and are seeking to assert their rights in relation to the said trademark and have filed application for registration and for opposition, wrongfully and illegally claiming rights in respect of the mark "JJ DELUXE", on the basis of the purported co-existence agreement.
20. Mr. Bachawat submits that the respondent no. 1 is seeking to assert its proprietorship right over the mark "JJ DELUXE" claiming user from 1st 9 January, 2021, in the said proceedings, in relation to electrical goods. In the said proceedings, the respondent is wrongfully and illegally seeking to assert rights in relation to the mark "JJ DELUXE" bearing application no. 1201904 filed in class 9, which it had unequivocally agreed to withdraw, before the Hon'ble Delhi High Court. The respondent nos. 1 and 2 have, therefore, acted in breach of the terms of the license agreements entered into between the respective petitioners and the respondent nos. 1 and 2.
21. Mr. Bachawat submits that it is further significant to state herein that in the purported proof of user in relation to the mark "JJ DELUXE" the respondent no. 1 has relied upon the invoices raised by it on the petitioners. Such invoices relied upon by the respondent no. 1 have been generated in terms of the license agreement.
22. Mr. Bachawat submits that for the purpose of selling its goods under the mark "JJ DELUXE" the predecessors-in-interest of the petitioner nos. 1 and 2 adopted and conceived a label and/or artistic work . The same is an original artistic work within the meaning of the Copyright Act, 1957 and the Petitioners have the exclusive right to exploit the same. Any unauthorised use, exploitation, adaptation, rearrangement and alteration thereof, infringe the petitioner's copyright therein.
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23. Mr. Bachawat submits that the petitioners have been continuously and uninterruptedly using the mark "JJ DELUXE" both in the form of a label/device as well as a word (per se), in relation to electrical products and accessories including cut-outs (electric), distribution process (electric), fuse (electric), switchgears (electric), plugs, adapters and parts, P.V.C. insulated wires and cables and other related and allied goods.
24. Mr. Bachawat submits that by reason of such vast and extensive use, the general public and members of the trade society are aware that the mark "JJ DELUXE" is associated with the petitioners and no one else and the same has acquired a secondary significance in course of trade.
25. Mr. Bachawat submits that the Respondent nos. 1 and 2 are subsequent users of the mark "JJ DELUXE" and had been permitted to manufacture the electrical goods for the Petitioners on a job work basis only, and no proprietary right ever existed, or could ever exist in favour of the Respondent nos. 1 and 2.
26. Mr. Bachawat submits that the respondent nos. 3 and 4 have purported to deal with the assets, i.e. the marks "JJ DELUXE" and other "JJ" formative marks, in which the petitioners have a right, title and interest, in sheer derogation of the terms of understanding amongst the parties.
27. Mr. Bachawat submits that the respondents are seeking to assert ownership rights, inter alia, in respect of the Petitioners' mark "JJ 11 DELUXE" and the artistic work , and misrepresent before the general public and the members of the trade that its goods and products sold under the mark "JJ DELUXE" are connected with the petitioners' business and/or forms a part thereof.
28. Mr. Bachawat submits that the impugned mark as used and applied by the respondent nos. 1 and 2, in the form as is deceptively similar to and a slavish imitation of the stylised representation of the petitioners' "JJ DELUXE" mark, in the form as , and various other "JJ" formative marks which are artistic works within the meaning of the Copyright Act, 1957, and the petitioners have rights in relation thereto.
29. Mr. Bachawat submits that the petitioners, through their advocates, have issued a notice dated 14th June, 2024, to the respondent nos. 1 to 4, thereby severing any and all relationship between the petitioners and the respondent nos. 1 and 2, and calling upon the respondent nos. 1 and 2 to immediately cease and desist from using the impugned "JJ DELUXE" marks and/or artistic work in connection therewith.
30. Mr. Bachawat submits that despite receipt of such notice, the respondent nos. 1 and 2 have refused to cease and desist from using the petitioner's mark "JJ DELUXE" and the artistic work in connection 12 therewith and are denying and/or are interested to deny the right of the petitioners to use the said trademarks "JJ DELUXE" and various other "JJ" formative marks, and the respondent nos. 3 and 4 are aiding and abetting and/or are interest to aid and abet the respondent nos. 1 and 2 to infringe such marks.
31. Mr. S.K. Bansal, Learned Advocate representing the respondent nos. 1 and 2 submits that on 25th July, 2023, M/s. JJ Electrical Industries through its partner, the respondent nos. 3 and 4 have entered into a Deed of Agreement with Mahavira Sales Corporation through its proprietor, Manish Kumar Jain, the respondent no. 1 wherein the respondent nos. 3 and 4 gives consent for co-existence for the purpose of perpetual, uninterrupted and unfettered use and exploitation of the trademark "JJ DELUXE" by the defendant no. 1 in relation to Switches (electric), Plug, Adapters and Parts.
32. Mr. Bansal submits that the respondent nos. 3 and 4 have agreed to entered into the above agreement upon one time consideration of Rs. 10,00,000/- and the same was duly paid by the respondent no. 1 to the respondent nos. 3 and 4 and the respondent nos. 3 and 4 have duly acknowledged the receipt of the same.
33. Mr. Bansal submits that the respondent nos. 3 and 4 have also executed an affidavit on 25th July, 2023 stating that M/s. J.J. Electrical Industries has entered into a Deed of Agreement on 25th July, 2023 with the respondent no. 1. He submits that the petitioner nos. 1 and 2 13 have by a letter dated 25th February, 2019 to the partners of M/s. J.J. Electrical Industries informed that due to unavoidable circumstances and personal commitments they have tendered their resignation for the partnership with M/s. J.J. Electrical Industries with effect from 31st March, 2019.
34. Mr. Bansal submits that on 1st April, 2019, after acceptance the resignation of the petitioner nos. 1 and 2, the respondent nos. 3 and 4 have entered into a Deed of reconstitution of partnership with respect to M/s. J.J. Electrical Industries wherein it is mentioned that the respondent nos. 3 and 4 having the share of 50% each in the said partnership.
35. Mr. Bansal submits that the respondent no. 1 has also obtained Copyright from the Registrar of Copyrights being Registration No. A- 154297/2024 dated 28th June, 2024 with respect to the mark "JJ DELUXE (LABEL)". He submits that the petitioners have sent cease and desist notice dated 14th June, 2024 to the respondent nos. 1 and 2 calling upon the respondents to cease and desist the use of the mark "JJ DELUXE". He submits that on receipt of the said notice, the defendant nos. 1 and 2 had sent a reply giving the details as to how the respondent nos. 1 and 2 are using the trademark "JJ DELUXE" and requested the petitioners to withdraw the said notice.
36. Mr. Bansal submits that submits that on 17th November, 2023, the petitioners have made an application before the Trade Marks Registry 14 being application No. 6188710 under Class 9 for the trademark "JJ DELUXE (Device)" by mentioning the date of user from 15th February, 2018 for the form "JJRS Enterprise". He submits that on receipt of the said application, the Trade Marks Registry had informed the petitioners that the similar trademark is already on record of the Registrar for the same or similar goods and directed to provide supporting documents that the petitioners are using the said marks since 15th February, 2018. He submits that the petitioner no. 1 has also filed an affidavit before the Registrar, Trade Marks on 16th November, 2023 stating that the petitioners have honestly, independently and bonafidely created and adopted the distinctive level "JJ DELUXE" with respect to various goods like switches, main switches, sockets, plugs, holders, MCBs, starters, connectors, testers etc. under Class 9. In the said affidavit, it is also stated that the petitioners are using the mark in respect of the said goods since 15th February, 2018.
37. Mr. Bansal submits that on 19th September, 2023, the petitioners have again submitted an application being No. 6116787 under Class 9 for the trademark "JJ CHAMPION" Device by showing user since 28th January, 1974. He submits that on receipt of the application, the Trade Marks Registry has sent a notice to the petitioner on 5th December, 2023 informing that an objection is raised under Section 11(1) of the Trade Marks Act, 1999 as the mark is identical with or similar to the earlier marks in respect of the identical or similar description of goods 15 or services and because of such identity or similarity there exists a likelihood of confusion on the part of the public.
38. Mr. Bansal submits that the petitioners have filed the present suit by suppressing all the material facts before this Court. He submits that the respondent no. 1 has also filed a suit against JJRS Enterprise before the Delhi High Court along with an application for grant of interim order and the copy of the same is already served to the Counsel for the petitioners as they have filed caveat before the Delhi High Court.
39. Mr. Bansal further submits that the matter was taken up for hearing by the Delhi High Court on 2nd August, 2024 and on the said date, the Learned Counsel for the petitioners has also appeared in the said suit but has not informed the Delhi High Court that the petitioners have filed the present suit before this Court and moved an application for grant of interim order.
40. Mr. Bansal relied upon the judgment in the case of Jain Shikanji Private Limtied -vs- Satish Kumar Jain reported in Neutral Citation No. 2023/DHC/001486 and submitted that the petitioners have retired from the partnership now there is no document to say that they are the joint partners. The respondent nos. 3 and 4 told to the respondent no. 1 that they have retired and the respondent nos. 3 and 4 have received an amount of Rs.10,00,000/- from the respondent no. 1, now how the petitioners claim right over the said mark. 16
41. Mr. Bansal relied upon the judgment in the case of Manohar Singh Chadda -vs- M/s. Sheetal Sweets reported in ILR (2000) III DELHI 197 and submitted that the petitioners have retired from the partnership with the respondent nos. 3 and 4 and after their retirement, the respondent nos. 3 and 4 had entered into a reconstituted partnership amongst themselves and thereafter the respondent nos. 3 and 4 had entered into a co-existence agreement with the respondent no. 1 and the petitioners cannot claim any right over the said mark.
42. Mr. Bansal relied upon the judgment in the case of B.L. and Co. & Ors. -vs- Pfizer Products Incl reported in 2001 PTC 797 (Del) (DB) and submitted that the statement made by the petitioners are not correct as the petitioners had the knowledge that they had resigned from the partnership of the business JJ Electricals and after their resignation, the respondent nos. 3 and 4 have reconstituted the partnership.
43. Mr. Bansal relied upon the judgment in the case of M/s. Golden Tobacco Limited -vs- M/s. Golden Tobie Private Limited reported in Neutral Citation No. 2021: DHC: 3011 and submitted that after entering into a co-existence agreement with the respondent nos. 3 and 4 after payment of an amount of Rs. 10,00,000/- to the respondent nos. 3 and 4, the respondent no. 1 has invested several lacs of Rupees in the said business and in the agreement, it is categorically mentioned that the respondent nos. 3 and 4 agreed to enter into an agreement 17 with the respondent no. 1 for the purpose of perpetual, uninterrupted and unfettered use of the said mark.
44. Mr. S. Roy Chowdhury for the respondent no. 3 submitted that the respondent no. 3 has cancelled the co-existence agreement entered between the respondent no. 1 and the respondent nos. 3 and 4.
45. Mr. Soumya Roy Chowdhury for the respondent no. 4 submitted that the respondent nos. 3 and 4 had already terminated the contract between the respondent nos. 1 and 2 and such the respondent nos. 1 and 2 cannot use the trademark "JJ DELUXE". He further submits that in the earlier suit, filed before the Delhi High Court in CS (OS) No. 215 of 2014, Mr. Bansal had appeared on behalf of the petitioners and now Mr. Bansal is appearing on behalf of the respondent nos. 1 and 2.
46. Heard the Learned Counsel for the parties, perused the materials on record and the judgment relied upon by the parties. The contention of the petitioners in the present application that the respondent nos. 1 and 2 have committed the acts of infringement by purporting to use and apply the petitioners well known established trademark "JJ DELUXE" and various other "JJ" formative marks by trading, marketing and advertise their goods in a manner so as to cause confusion and deception in the minds of the general public and the members of the trade, as regards the origin and source of the impugned goods under the mark "JJ DELUXE Label."
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47. Mahavir Prasad Jain, the father of the respondent no.1 was manufacturing electrical goods and parts thereof under the trademark "JJ DELUXE" at the instance of M/s. J.J. Electrical Industries and also got the trademark "JJ DELUXE (Label)" registered being No. 1201904 in Class 9.
48. M/s. J.J. Electrical Industries being aggrieved with the said registration filed a Civil Suit being CS (OS) No. 215 of 2014 before the Delhi High Court and also filed an application for cancellation being ORA/107/2014/TM/DEL before the IPAB. The suit filed by M/s. J.J. Electrical Industries got settled between the parties on 30th April, 2014 in terms of the joint application filed by the parties under Order 23, Rule 3 of the Code of Civil Procedure, 1908, which reads as follows:
"IN THE HIGH COURT OF DELHI AT NEW DELHI (ORDINARY ORIGINAL JURISDICTION) SUIT NO 215 OF 2014 M/s. J.J. Electrical Industries (Kolkata) ......... Plaintiff v.
M/s. Mahavir Parshad Jain & Others ........ Defendant APPLICATION ON BEHALF OF THE PLAINTIFF AND DEFENDANT UNDER ORDER 23 RULE 3 CPC READ WITH SECTION 151 CPC.
RESPECTFULLY SHEWETH:-
1. That the above mentioned suit is pending adjudication before this Hon'ble Court.
2 That the plaintiff and the defendants have entered into a compromise on the following terms:-19
a) That the defendants admits rights of the plaintiff in the trademark/label JJ DELUXE and other JJ formative marks in relation to electrical and electrical goods, appliances, accessories & fittings, switchgears, switches and other allied and related goods.
b) That the defendants further admits proprietary rights of the. plaintiff in the artistic features viz-a-
viz copyrights in the trademark JJ DELUXE and other JJ formative marks.
c) That the defendants admits proprietary rights of the plaintiff in the trade name M/s. J.J. Electrical Industries, Kolkata.
d) That the defendants admits proprietary right of the plaintiff in the mark JJ DELUXE and other JJ formative marks on account of its prior adoption in the year 1975 and continuous use thereafter.
e) That the defendants admits various trademark registrations of the plaintiff in the mark JJ DELUXE and other JJ formative marks and undertakes never to challenge the same.
f) That the defendants undertakes not to use the trademark JJ DELUXE, trademark JJ and other JJ formative marks as also its artistic features amounting to infringement and passing off of the plaintiff's rights.
f) That the defendants further admits that at earlier occasion defendant was manufacturing electrical goods for the plaintiff on job work basis under the trademark JJ DELUXE and other JJ formative marks and no proprietary rights ever existed in favour of the defendant.
g) Plaintiff and defendant has now arrived at the understanding that the defendant will be manufacturing switchgears (being electrical goods) under the trademark JJ DELUXE and other JJ formative marks for the plaintiff and at the instance and on instructions of the plaintiff. The goods so manufactured by the defendant will be supplied to the plaintiff or to any other person at the instance/on instructions of the plaintiff. The defendants said manufacturing is strictly on job 20 work basis and the defendant will not claim any proprietary rights in the said trademarks. The defendant shall be manufacturing the said products on instruction of the plaintiff M/s. J.J. Electrical Industries, Kolkata as also on behalf of the plaintiffs other associate firms M/s JJ Electrical Corporation, Kolkata.
h) The defendant undertakes never to advertise the said mark JJ DELUXE and JJ formative marks in any manner whatsoever i.e. through print, audio and visual media.
i) The defendant undertakes not to manufacture switchgears (being electrical goods) under the trademark JJ DELUXE and JJ formative marks for any other third party.
j) The defendants have filed various trademark applications for the mark JJ DELUXE and JJ formative marks and some of such applications are pending. Defendants undertake to withdraw such pending trademark and copyright applications.
g) That in view of the above undertaking by the defendant, plaintiff agrees to waive his claim for damages and rendition of accounts.
h) Defendants have no objection whatsoever in case the suit is decreed in terms of Para 31 (a), (i),
(ii) of the plaint.
i) That the above mentioned compromise terms shall bind both the parties, their representatives, heirs, assigns as the case may be.
Under the facts and circumstances of the present case, it is most respectfully prayed that the suit be decreed in terms of the above compromise as well as Para 31 (a), (i), (ii) of the plaint and the compromise be formed part of the decree.
Any other and further order(s) be also passed which this Hon'ble Court may deem fit and proper of the facts and circumstances of the case.
Prayed accordingly,"
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The cancellation application was also withdrawn in view of the settlement vide order dated 12th February, 2018, passed by the IPAB.
49. On 14th October, 2020, an Agreement for supply of products was entered between M/s. JJRS Enterprise and M/s Mahavir Sale Corporation with the following terms and conditions:
"NOW THIS AGREEMENT WITNESSETH AS UNDER:-
1. CONVENANETS BETWEEN THE "COMPANY"
and the "MANUFACTURER"
A) The "COMPANY" hereby agrees to purchase goods from the "MANUFACTURER" and the "MANUFACTURER" agrees to supply to the "COMPANY" the above-mentioned products under the brand name "JJ DELUXE".
B) The "PRODUCTS" must be supplied in accordance with the specification of the "COMPANY" with respect to logo design, printing matter, packing style and marking on packing.
C) The "MANUFACTURER" undertakes that the "COMPANY" is the absolute owner of the trademark "JJ DELUXE" and shall not supply products under the brand name "JJ DELUXE" or any other "JJ"
brand to anyone else.
D) The "COMPANY" undertakes that it will purchase such "PRODUCTS" mentioned above from the "MANUFACTURER" only during the specified duration mentioned in the agreement.
E) The "MANUFACTURER" undertakes not to sell to any party any products or any article bearing the logo or trademark of the "COMPANY" except to the "COMPANY" or its order.
2. DURATION This agreement is for a period of ten years from 14/10/2020 to 14/10/2030.
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3. MUTUAL OBLIGATIONS A) If the "COMPANY" and/or the "MANUFACTURER"
finds any person causing or being the cause of any infringement of the said trademark, either will bring that fact to the notice of each other so as to take necessary legal action against such person. In such event the "COMPANY" and "MANUFACTURER" will provide cooperation to each other in the prosecution of the case."
50. The respondent no. 1 claims that M/s. J.J. Electrical Industries vide Deed of Agreement dated 25th July, 2023, gave consent for co-existence Agreement for the purpose of perpetual, uninterrupted and unfettered use and exploitation of the trade mark "JJ DELUXE" to the respondent no.1 after receipt of one time consideration of Rs.10,00,000/- for manufacture and sale of electrical goods and parts thereof without having any control and supervision thereof retaining their rights to use or otherwise deal with their proprietary rights in the said trademark "JJ DELUXE" (word per se and stylized).
51. On 21st August, 2023, the respondent no.1 had filed an application seeking registration of the device/label mark "JJ DELUXE Label" for electrical goods under Class 9 with the user claim since 1st January, 2021. As per the status report, the said application is pending as objected. The mark which the respondent has applied for is as follows: 23
52. As per Agreement dated 14th October, 2020 which is valid till 14th October, 2030, the petitioners and the respondent nos. 3 and 4 have unequivocally agreed that the trade mark "JJ DELUXE" bearing the Registration No. 342575 in Class 9 and "JJ DELUXE" (Device) bearing the Registration No. 632575 in Class 9 would be jointly owned by petitioners and the respondent nos. 3 and 4 and only permitted the respondent no. 2 to supply the finished goods under the mark "JJ DELUXE" to the petitioners and respondent nos. 3 and 4.
53. The respondent no.1 is claiming the right over the trade mark "JJ DELUXE" on the basis of the Deed of Agreement entered between respondent nos. 3, 4 and the respondent no.1 dated 25th July, 2023 but on the other hand, the respondent no. 4 by notice dated 8th July, 2024, terminated the agreement dated 25th July, 2023, on the pretext that as per the Agreement dated 28th February, 2019, the trade mark "JJ DELUXE" are jointly owned by the petitioners and the respondent nos. 3 and 4 and the respondent no.1 was granted merely a right to use the said trademark but the respondent no.1 has filed an application for registration of the said mark of identical or deceptively similar to the 24 trade mark of the petitioners and the respondent nos. 3 and 4 in the name of the respondent no.1.
54. The terms of Deed of Agreement relied by the respondent no.1 reads as follows:
"NOW THIS DEED WITNESSETH AS UNDER:
1. The Party No.1 gives consent for co-existence for the purpose of perpetual, uninterrupted and unfettered use and exploitation of the trademark J.J. DELUXE (word per se and stylized) by Party No.2 in relation to Switches (electric), Plug, Adaptors and Parts.
2. The Party No.2 shall manufacture and sale the electrical goods and parts thereof under the Trade Mark J J DELUXE (word per se and stylized) without any control and supervision of Party No.1. However, the party no.2 shall have to fulfil all statutory obligations incidental to manufacture and sale of the electrical goods and parts thereof and Party No.1 shall not be liable for any lapse in this respect.
3. This Agreement does not in any way restrict, prejudice or affect the right of the Party No.1 to use or otherwise deal with its proprietary rights in the said JJ DELUXE (word per se and stylized).
4. This Agreement has been entered into by the parties without any force, coercion and undue influence.
5. This Agreement shall bind the parties, their legal heirs, successors, executors, representatives, assign/assignees and any other person acting on their behalf."
55. The petitioners are not the party to the Deed of Agreement dated 25 July, 2023. There is no Deed of retirement enter between the petitioners and the respondent nos. 3 and 4. The reconstitution Deed of 25 Partnership dated 1st April, 2024, the petitioners are not the signatory of the said deed.
56. The judgment relied by the respondent no. 1 in the case of Jain Shikanji Private Limited (supra) is distinguishable from the facts of the case. In the case in hand, the respondent no. 1 relied upon the resignation letters of the petitioners dated 25th February, 2019 but the respondent no. 1 has entered into an agreement for supply of products with the petitioner M/s. JJRS Enterprises through its partner Shri Tushar Saraff on 14th October, 2020, who is the petitioner no.1 in the present proceeding and the said Agreement is valid till 14th October, 2030.
57. In the present case, the specific case of the respondent nos. 3 and 4 that they have terminated the Agreement dated 25th July, 2023 by a notice dated 8th July, 2024 which was duly received by the respondent no. 1. The respondent no. 1 has also filed a suit before the Hon'ble Delhi High Court but in the said case, the respondent no. 1 has neither made the respondent nos. 3 and 4 as party nor has challenged the notice of termination. Considering the above aspect, the judgment relied by the respondents in the case of M/s. Golden Tobacco Limited (supra) is distinguishable from the facts of the case.
58. In the case of Viridian Development Managers Pvt. Ltd. & Anr. -vs- RPS Infrastructure Ltd. reported in 2023 SCC OnLine Del 7134, the Delhi High Court held that :
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16. It is well settled that once the licence contract is terminated, any use of mark by the ex-
licensee of the mark would amount to infringement of the mark of the licensor and would deceive the public, inasmuch as the public would be led to believe that the ex-licensee is still connected with the licensor. Thus, the ex-licensee cannot be allowed to use the mark after termination of license. Further, the licensor has a right and duty to ensure the consistency of the goods or services being sold and advertised under its mark. If the licensor has severed its business relationship with a licensee, it cannot guarantee the continued quality of the ex-licensee's operations. The remedy for the ex-licensee is money damages if the termination is found to be bad in law. The legality or illegality of termination would be a matter to be determined in arbitration. Reference is apposite to a passage in "McCarthy on Trademarks and Unfair Competition", Third Edition, wherein it has been stated as under:
"S. 25.07 Use of Mark by Ex-Licensee [1] Continued Use of Mark by Ex-Licensee Is Trademark Infringement Once a license contract is terminated, there is no doubt that the ex-licensee has no authorization or consent to continue use of the mark. After the license had ended, the ex-licensee must stop use of the mark. Continued use by an ex-licensee of the licensor's mark constitutes a fraud on the public, since they are led to think that the ex-licensee is still connected with the licensor. As the Eleventh Circuit observed: "Common sense compels the conclusion that a strong risk of consumer confusion arises when a terminated franchisee continues to use the former franchisor's trademarks."
xxx xxx xxx Understandably, many ex-franchisees and ex-
licensees are reluctant to give up use of the mark. Nevertheless, they clearly can be enjoined from any such further use.
The Ninth Circuit has indicated that franchisees who refuse to pay franchise fees and sue the franchisor for antitrust violations have in effect "repudiated" the franchise contract and can be enjoined, pending the antitrust litigation, from 27 use of the licensed trademark. The remedy for a franchisee who alleges that she was wrongfully terminated is money damages, not the continued unauthorized use of the franchisor's trademarks. Clearly, a terminated franchisee who is infringing on the franchisor's trademark is not entitled to a preliminary injunction requiring the franchisor to continue doing business. That is, "the infringement of a trademark is not a proper self-help remedy for a breach of contract."
xxx xxx xxx It is clear that use of a mark by a person while such person was a licensee builds up no rights in the mark as against the licensor:"Once a license has expired, use of the formerly licensed trademark constitutes infringement. To say that the licensee has acquired rights that survive the legal termination of the license destroys the entire concept of a license.... No rights are established by such use."
A licensee who once had authorization becomes associated in the public mind with the licensor or franchisor. When such a party loses authorization but continues use of the mark, "the potential for consumer confusion is greater than in the case of the random infringer." Such continued use inevitably threatens injury to the good will and reputation of the mark and puts the licensor's reputation beyond its own control. The licensor's case for a preliminary injunction is stronger than in the ordinary trademark infringement case and "irreparable harm always flows from unlawful use and confusion." As the Seventh Circuit observed:
Once a franchise has been terminated, the franchisee cannot be allowed to keep on using the trademark. The owner of a trademark has a duty to ensure the consistency of the trademarked good or service. If he does not fulfill this duty, he forfeits the trademark.... If the owner of the trademark has broken off business relations with a licensee he cannot ensure the continued quality of the (ex-) licensee's operation, whose continued use of the trademark is therefore a violation of trademark law.
xxx xxx xxx 28 In sum, the law is simple. If, as a matter of contract law, a service mark and trademark license has ended, the licensee has no right to continue use of licensed mark. Any such use is without the trademark owner's consent and constitutes infringement."
In the present case also the respondent no. 4 has issued notice to the respondent nos. 1 and 2 by termination the Agreement dated 25th July, 2023 but the respondent no. 1 has not challenged the said notice.
59. In the case of Sir Robert McAlpine Ltd. vs- Alfred McAlpine PLC reported in (2004) RPC 36, it is held that :
"One co-owner of goodwill cannot by way of misrepresentation elbow out or deprive the other co-owner of the benefits of such goodwill by appropriating them. He submitted that since both the plaintiff and first defendant were joint owners of the trade-mark, trade name and goodwill in the mark, the first defendant's actions to appropriate that goodwill in respect of the third and fourth defendant entities, to the exclusion of the plaintiff, would amount to passing off. Similarly, the attempt by the first defendant to change the trademark of the Hotel without the plaintiffs consent amounts to dilution of the trademark and would result in the erosion of the goodwill associated with it. Therefore, he contended that the restraint order sought for must be granted."
60. Considering the above facts and circumstances mentioned herein above, this Court finds that the documents which the respondent no.1 is relying upon require adjudication. This Court finds that the petitioners have made out a prima facie case and balance of convenience in their favour and if at this stage, an interim order is not passed, which will amount to give license to the respondent nos. 1 and 29 2 to use the trade mark for selling and distribution of the electrical items for which the petitioners will suffer irreparable loss and injury.
61. In view of the above, the respondent nos. 1 and 2 and their men, servants, agents, assigns, dealers and distributors, and/or anyone claiming from or through them be restrained from passing off or allowing others to pass off the trademarks "JJ DELUXE" and various other "JJ" formative marks as that of the petitioner's marks by manufacturing, selling, marketing, and/or distributing electrical and electrical goods, appliances, accessories and sittings, switchgears, switches and other allied and related goods, under any mark which is either identical with or deceptively similar to the petitioners' mark "JJ DELUXE" and various other "JJ" formative marks, in any manner whatsoever till 13th September, 2024.
62. Petitioners are directed to serve the copy of application, documents and plaint to the respondents and to file affidavit of service on the returnable date.
63. List the matter on 13th September, 2024.
(Krishna Rao, J.) p.d/-