Delhi High Court
M/S Flowil International Lighting ... vs M/S Digital Gadgets And Ors on 14 March, 2014
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 14 March, 2014
+ CS(OS) 1391/2010
M/S FLOWIL INTERNATIONAL LIGHTING (HOLDING)
B.V. (NETHERLANDS) AND ANR ..... Plaintiffs
Through: Ms. Pratibha M. Singh, Mr.
Sudeep Chatterjee and Mr. Ashwin
Kumar, Advs.
Versus
M/S DIGITAL GADGETS AND ORS ..... Defendants
Through: Mr. Nitin Bhatia, Adv. for D-3.
Mr. Rajiv Virmani, Sr. Adv. with
Ms. Sarojh Nagaraj, Adv. for D-5
Mr. Sai Krishna Rajagopal, Ms.
Sneha Jain and Mr. Arjun
Ranganathan, Advs.for proposed
D-14.
Mr. Mrinal Bharti, Adv. for
proposed D-15.
Mr. Abhinav Vashisht, Sr.
Advocate with Mr. Anuj
Malhotra, Mr. Gaurav Kothari,
Ms. Suruchi Rungta for proposed
D-16.
Dr. Saif Mahmood, adv. for
proposed D-18.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
CS(OS) No.1391/2010 Page 1 of 11
IA No.12589/2012 (of the plaintiff u/O1 Rule 10 r/w Order 39 Rules 1&2
CPC).
1. The two plaintiffs instituted the present suit, initially against eight
defendants, for permanent injunction restraining infringement of
registered trademark „SYLVANIA‟ and for restraining the defendants
from passing off their goods as that of the plaintiffs and for the ancillary
relief of rendition of accounts, pleading:-
(i) that the plaintiffs possess rights in the trademark
„SYLVANIA‟;
(ii) that the plaintiffs learnt of the defendant no.3 The Hong
Kong and Shanghai Banking Corporation Limited (HSBC)
offering to its customers a Net Book PC bearing the brand
name „SYLVANIA‟;
(iii) that on enquiry it was learnt that the defendant no.1 Digital
Gadgets was offering the said products, claiming itself to be
a licensee of defendant no.2 Osram Sylvania Inc.;
(iv) that the defendant no.2 Osram Sylvania Inc. does not have
any rights to use the mark „SYLVANIA‟ in any manner
whatsoever in any country other than USA, Canada, Mexico
and Puerto Rico;
(v) that besides the defendant no.3 HSBC, the defendants no.4
to 7 i.e. M/s India Times. Com, M/s Rediff.com India
Limited, M/s TolMol India and M/s Compact International
CS(OS) No.1391/2010 Page 2 of 11
were also offering sale of aforesaid products under the
brand „SYLVANIA‟;
(vi) that the defendant no.1 M/s Digital Gadgets and defendant
no.2 Osram Sylvania Inc. were offering for sale their
computer Net Books bearing brand name „SYLVANIA‟ on
the websites of defendants no.4 to 7;
(vii) that the defendant no.8 M/s Panam Corporation was
importing the said products under the brand „SYLVANIA‟
in India;
(viii) that none of the defendants had any permission,
authorization, consent or license from the plaintiffs to use in
any manner the mark „SYLVANIA‟ in the territories
worldwide including India; only the defendant no.2 Osram
Sylvania Inc. has limited right to use / license the mark
„SYLVANIA‟ in USA, Canada, Mexico & Puerto Rico.
2. Vide ad interim order dated 14th July, 2010 in this suit, the
defendants no.1&2 were restrained from using the mark „SYLVANIA‟ in
any manner whatsoever and the defendants no.3 to 8 were restrained from
advertising or promoting the „SYLVANIA‟ brand particularly for Net
Book PCs either through promotional mails or through their websites.
3. Subsequently, the defendants no.9&10 i.e. M/s Siemens Industry
Inc. and M/s Osram GmbH were added as defendants to the suit, pleading
CS(OS) No.1391/2010 Page 3 of 11
that they were the principal companies of defendant no.2 Osram Sylvania
Inc.
4. Thereafter, on application of plaintiffs, M/s Honda Siel Cars India
Ltd. and M/s Honda Motor Co. Ltd. were also added as defendants
no.11&12, on the averment of the plaintiffs that were fitting automobile
lamps under the brand name „SYLVANIA‟ in the Honda Accord Cars
being sold by them.
5. The plaintiffs have filed this application inter alia for impleadment
of Amazon.com, Homeshop 18.com, eBay India Private Limited,
Naaptol.com and Wespro Digital Pvt. Ltd., pleading that the said
proposed defendants are the retail websites accessible in India and the
„SYLVANIA‟ branded products can be purchased by Indian customers
by logging on to the said websites and that such a sale by the said
proposed defendants of „SYLVANIA‟ branded products through their
website is impermissible as India is the exclusive territory wherein the
plaintiffs are the owners of the mark „SYLVANIA‟ and none of the said
proposed defendants have obtained consent or license or authorization
from the plaintiffs to sell „SYLVANIA‟ branded products; with respect to
the proposed defendants Wespro Digital Pvt. Ltd., it is stated that the
products purchased by the attorneys of the plaintiffs through
www.naaptol.com were being sold in India by the said Wespro Digital
Pvt. Ltd. The plaintiffs thus contend that the aforesaid proposed
defendants are necessary and proper parties to the suit.
CS(OS) No.1391/2010 Page 4 of 11
6. On 17th July, 2012 notice of this application was issued to the
defendants. On 21st September, 2012, notice of the application was also
ordered to be issued to the proposed defendants.
7. On 6th March, 2013, the counsel for the proposed defendant
Amazon.com contended that the application of the plaintiffs for
impleadment of Amazon.com is contrary to the dicta of the Division
Bench of this Court in Kapil Wadhwa Vs. Samsung Electronics Co. Ltd.
(2013) 53 PTC 112. However, on request of the counsel for the plaintiffs,
the hearing was adjourned.
8. Replies have been filed on behalf of the proposed defendants
Amazon.com and Naaptol.com to the application. The counsel for the
plaintiffs and the counsels for the proposed defendants Homeshop
18.com, eBay India Private Limited, Naaptol.com and Wespro Digital
Pvt. Ltd. have been heard on the said application. The counsel for the
plaintiffs and the counsel for eBay India Private Limited have also filed
written synopsis of their submissions.
9. It is the contention of the counsels for the said proposed defendants
that their respective websites merely provide an online platform to enable
the vendors to display for sale their respective goods and allow the
purchasers of the said goods to make the transaction of sale through the
said website/portal. They further argue that they are an "intermediary"
within the meaning of Section 2(w) of the Information Technology Act,
2000 and are under Section 79 of the said Act not liable for any for any
third party information posted by them and their liability, as per the
CS(OS) No.1391/2010 Page 5 of 11
Information Technology (Intermediaries Guidelines) Rules 2011 is only
to, upon objection being taken, remove the objectionable information and
not allow the same to be posted on their respective website/portals in
future. It is yet further argued that it is not possible for them to prevent
any objectionable information being posted on their websites, in as much
as they cannot control the same and are only required to, on receipt of
objection, take action within 36 hours. They further contend that upon
objection being taken by the plaintiffs to the products bearing mark/name
„SYLVANIA‟ being posted for sale on their respective portals/website,
they have immediately, in accordance with law, asked the vendors who
had posted the said information to remove the same and the vendors have
so removed the information. It is further argued that upon the failure of
the vendors to remove the said information, the said proposed defendants,
as per clarification dated 18th March, 2013 issued by the Department of
Electronics and Information Technology, Government of India, are
required to within one month‟s time, remove the information objected.
They thus state, that they will abide by the said procedure and having
made the said statement, are neither a necessary nor a proper party to the
suit. The counsel for proposed defendant Wespro Digital Pvt. Ltd. has
also stated that in addition to posting information of the vendors on their
portal Naaptol.com, the said Wespro Digital Pvt. Ltd. was also engaged
in the business of sale of goods but has upon receipt of objection from the
plaintiffs, stopped such sale on its own also and is no longer dealing in
the said products.
CS(OS) No.1391/2010 Page 6 of 11
10. Notwithstanding the aforesaid stand of the counsels for the said
proposed defendants, the counsel for the plaintiffs contends that the role
of the said proposed defendants is not as an intermediary and they were
engaged in effecting sales themselves. It was further argued that the
question, whether the said proposed defendants are merely intermediary
or were affecting sale of the products infringing the trademark of the
plaintiffs themselves, can be decided only after the said proposed
defendants are impleaded as defendants and file their written statement.
11. Though arguments were heard long back on 15th May, 2013 and
the pronouncement of order thereon went on the back burner, owing to
change of Roster and applications from time to time being filed in the suit
and though the counsel for the plaintiffs has on subsequent dates also
argued that instead of pronouncing orders, arguments be heard afresh
along with the arguments of others also sought to be impleaded but my
written notes of arguments as well as the written synopsis, have not
allowed the matter to become stale and I thus proceed to pronounce order
on the arguments heard.
12. I may however record, that on 15th May, 2013, arguments of the
senior counsel for the defendant no.5 Rediff.com India Limited were also
heard; but since, the defendant no.5 seeks rejection of the plaint qua it,
and while reserving order, this distinction was not carved out, it is
deemed appropriate to defer orders on the same as of now.
13. The argument of the counsel for the plaintiffs is that since the
proposed defendants also, by selling/offering for sale products under the
CS(OS) No.1391/2010 Page 7 of 11
mark „SYLVANIA‟, have infringed the rights of the plaintiffs, they are a
necessary and a proper party to the present suit. It is also contended that
the statement of the said defendants through their counsels, of having
stopped sale of such products and / or to the effect that they will not sell
such products in future, though may take care of the relief in so far as
sought of permanent injunction, does not take care of the relief also
claimed in the plaint, of rendition of accounts and damages.
14. I may notice, that the plaintiffs, during the pendency of this
application for impleadment, filed IA No.17623/2012 stating that during
the pendency of the proceedings, the plaintiffs and the defendant no.2
Osram Sylvania Inc., defendant no.9 Siemens Industry Inc., defendant
no.10 Osram GmbH, defendant no.11 Honda Siel Cars India Ltd.,
defendant no.12 Honda Motor Co. Ltd. and proposed defendant no.13
Osram Sylvania Products Inc. (now known as Osram Sylvania Inc. i.e.
the same as defendant no.2) have arrived at an amicable settlement of all
pending disputes and differences subject matter of the suit on the terms
contained in the Settlement Agreement dated 14th September, 2012 and in
view thereof the plaintiffs withdraw the suit against the said defendants
and also waive off their entire claim against the said defendants. The said
application was allowed on 21st September, 2012 and the suit of the
plaintiffs against the said defendants dismissed as withdrawn.
15. The position which thus emerges is, that the cause of action on
which the suit was filed, of the defendant no.2 Osram Sylvania Inc. and
its Group Companies Siemens Industry Inc. (defendant no.9), Osram
CS(OS) No.1391/2010 Page 8 of 11
GmbH (defendant no.10) and Osram Sylvania Products Inc. (proposed
defendant no.13), in violation of their license agreement which permitted
them to use the mark „SYLVANIA‟ only in the countries of USA,
Canada, Mexico and Puerto Rico, were on / through the websites of
defendants no.4 to 7 and the proposed defendants aforesaid selling the
products with the mark „SYLVANIA‟ in India, has disappeared.
16. The plaintiffs are however still wanting to flog the suit against the
defendants no.4 to 7 and the proposed defendants aforesaid on / through
whose portals/website the goods of defendant no.2 Osram Sylvania Inc.
with the mark „SYLVANIA‟ were / are being sold. It is not the case of
the plaintiffs that any of the defendants no.4 to 7 or the proposed
defendants aforesaid are themselves manufacturing the goods with the
mark „SYLVANIA‟. The allegations against the defendants no.4 to 7 and
the proposed defendants aforesaid are only of selling or allowing sale of
the goods of defendant no.2 Osram Sylvania Inc. with the mark
„SYLVANIA‟.
17. The plaintiffs have not filed the Settlement Agreement signed by
them with the defendants against whom the suit has been withdrawn and
have claimed confidentiality with respect thereto. The plaintiffs, in IA
No.17623/2012 supra have not pleaded that the plaintiffs have received
any compensation from the defendant no.2 Osram Sylvania Inc. and its
Group Companies Siemens Industry Inc., Osram GmbH and Osram
Sylvania Products Inc. who had launched the products bearing the mark
„SYLVANIA‟ in India and which were being marketed/sold by / through
CS(OS) No.1391/2010 Page 9 of 11
the websites / portals of defendants no.4 to 7 and the proposed defendants
aforesaid. The plaintiffs, after the cause of action on which the suit was
filed has disappeared, cannot be permitted to continue the suit and to,
after unconditionally withdrawing the suit against the manufacturer of
goods with infringing mark, keep the same alive against the defendants
no.4 to 7 and the proposed defendants aforesaid who were/are merely
selling or allowing the sale, on their respective websites of the said goods.
18. I may further notice that the plaintiffs have since also filed I.A.
No.16505/2013 for impleadment of M/s Curtis International Ltd. as a
defendant, pleading that M/s Osram Sylvania Inc. has intimated the
plaintiffs that it had licenced the said M/s Curtis International Ltd. to
offer for sale SYLVANIA branded products within its territory of USA,
Canada, Mexico and Puerto Rico and not outside the said territory but the
said M/s Curtis International Ltd. was illegally getting the products under
the mark SYLVANIA manufactured in China and supplying the same to
various websites for sale outside the territory of Osram Sylvania Inc. The
said application is still pending consideration and thus I refrain from
making any observations with respect thereto and have mentioned the
same only to complete the picture. It is however not deemed necessary to
defer pronouncement of orders on arguments heard prior to filing of IA
No.16505/2013, as the subsequent event of filing of IA No.16505/2013
cannot change the factual situation existing on the date of hearing.
19. In this view of the matter, need is not felt to pronounce on the
arguments urged and noted above.
CS(OS) No.1391/2010 Page 10 of 11
20. IA No.12589/2012 thus, in so far as seeks the impleadment of
Homeshop 18.Com, eBay India Private Ltd., Naaptol.com and Wespro
Digital Pvt. Ltd. is dismissed. The said proposed defendants shall
however remain bound by the statements/undertakings of their Advocates
as aforesaid recorded. The application for impleadment having been
dismissed for reasons aforesaid, it is made clear that the plaintiffs shall be
entitled to, if have a separate and distinct cause of action against the said
proposed defendants, to institute separate proceedings against them
thereon.
RAJIV SAHAI ENDLAW, J.
MARCH 14, 2014. pp CS(OS) No.1391/2010 Page 11 of 11