Delhi High Court
M/S Coral Seal & Ceramics vs Sunil Sagar on 26 July, 2013
Author: S. Muralidhar
Bench: S. Muralidhar
* IN THE HIGH COURT OF DELHI AT NEW DELHI
#22
+ CS(OS) 1662 of 2012
M/S CORAL SEAL & CERAMICS ..... Plaintiff
Through: Mr. Sushant Singh with
Mr. P.C. Arya, Mr. Gowtham,
Mr. V.K. Shukla, Mr. Tejinder Singh
and Ms. Parveen Arya, Advocates.
versus
SUNIL SAGAR ..... Defendant
Through: Mr. Manish Kaushik, Advocate.
CORAM: JUSTICE S. MURALIDHAR
ORDER
% 26.07.2013
1. The following issues are framed:
(1) Whether the Plaintiff is the owner and proprietor of the
trademark CORAL MECHANICAL SEAL? OPP
(2) Whether the Defendant is passing off its goods as and those of
the Plaintiff? OPP
(3) Whether the Defendant's packaging is identical to the
Plaintiff's packaging, thereby amounting to infringement of the
Plaintiff's copyright? OPP
(4) Whether there is concealment of material facts by the Plaintiff
and to what effect? OPD
(5) Whether the Defendant is the prior user of the impugned
trademark CORAL MECHANICAL SEAL? OPD
(6) Whether the Plaintiff is entitled to damages as claimed by the
Plaintiff? OPP
(7) Relief.
No other issue arises or is pressed.
2. The parties will now file their respective list of witnesses and affidavits CS(OS) No. 1662 of 2012 Page 1 of 10 by way of examination-in-chief of those witnesses within eight weeks. To be placed before the Joint Registrar on 13th November 2013. I.A. No. 10717 of 2012 (u/O XXXIX R-1 & 2 CPC)
3. The background facts to the present suit has been set out in some detail in the order passed by the Court on 1st June 2012 while granting an ex parte ad- interim injunction in favour of the Plaintiff and against the Defendant. The said order reads as under:
"Plaintiff has filed the present suit for injunction, infringement of copyright, passing off, damages and delivery up etc. against the defendant.
As per the plaint, plaintiff is engaged in the business of manufacturing and trading of automobile parts and mechanical seals under the trademark 'CORAL MECHANICAL SEAL' and has applied for registration of the said trademark with the Registrar of Trademark. A copy of the trademark application under no.2056103 dated 1.11.2010 has been filed along with the plaint. The plaintiff's products are known for their quality and high standard. The device, name, word, letter, design, layout and packaging of the said products of the plaintiff are covered by the provisions of Section 2(m) of the Trade Marks Act, pertaining to the definition of mark. The plaintiff is also the owner of the copyright in the packaging and design of the said products. The plaintiff has adopted the distinctive mark, shape, design, getup layout and arrangement of features in respect of the CORAL MECHANICAL SEAL and has been using the same continuously, regularly, extensively and uninterruptedly. The plaintiff has also spent large amount of money on sales promotion and advertisement through various modern media. The purchasers of CORAL MECHANICAL SEAL are generally the semi-literate persons or traders dealing with automobile parts and mechanical seals who recognize the plaintiff's goods with their distinctive mark, shape design, getup and layout of the product.
Learned counsel for the plaintiff submits that the plaintiff has learnt that defendant is engaged in the business of manufacturing and sale of automobile parts and mechanical seals. Counsel further submits that CS(OS) No. 1662 of 2012 Page 2 of 10 defendant's mechanical seal are virtually a replica of the plaintiff's product CORAL MECHANICAL SEAL inasmuch as the device, mark, label, shape, design, arrangement of features, layout and get- up, colour combination, packaging and the overall trade dress are concerned and the said product of the defendant is readily available in Delhi and NCR. In support of his submission, counsel has drawn the attention of the Court to the scanned graphic design/scanned design of the plaintiff's CORAL MECHANICAL SEAL and the defendant's CORAL SEAL to show the similarity between the products of the plaintiff and the defendant. Counsel next submits that defendant is aware of the plaintiff's product, has been dealing with the plaintiff and purchasing the goods from the plaintiff, which is evident from the original bill, which has been filed at page 175 of the documents. Counsel also submits that defendant has filed an application dated 17.10.2011 before the Assistant Registrar, opposing the registration of the plaintiff's trademark CORAL MECHANICAL SEAL under class 7. Counsel submits that in case the defendant is permitted to continue with its illegal activities the plaintiff would suffer immense loss, goodwill, reputation and the name of the plaintiff will be diluted. Counsel, in these circumstances, prays for ex parte ad interim injunction.
Issue summons in the suit and notice in the application to defendants, returnable on 22.08.2012.
I have heard counsel for the plaintiff and perused the plaint, application and the documents. I am satisfied that prima facie plaintiff has been able to show that it has been using the trademark 'CORAL MECHANICAL SEAL' prior in time to the defendant, which is evident from a copy of the bill which has been placed on record to show that the defendant has been buying the product from the plaintiff. Had the defendant been in business prior to the plaintiff, defendant would not be purchasing the identical goods from the plaintiff. On comparison of the packaging material, I also find that the defendant has copied the trade-dress and the manner of writing is almost identical. The plaintiff has thus been able to establish a case for grant of ex parte ad-interim injunction.
Accordingly, till the next date of hearing defendant, its directors, partners, proprietors, servants, officers, agents and representatives are restrained from marketing, selling, offering for sale, advertising and directly or indirectly dealing using the similar mark, device, label, brand, name, shape, design and other arrangement of features and trade dress as that used by the plaintiff for its product CS(OS) No. 1662 of 2012 Page 3 of 10 'CORAL MECHANICAL SEAL'.
Plaintiff will comply with the provisions of Order 39 Rule 3 CPC within five days. DASTI."
4. The graphic design/scanned design on the Plaintiff's coral mechanical seal and the Defendant's coral seal are as under:
5. It is submitted by Mr. Sushant Singh, learned counsel for the Plaintiff that there is a high degree of deceptive resemblance between the products and in their mark, device, label, brand name, design, shape, scheme, layout, get-up and arrangement of features and any purchaser of ordinary prudence and imperfect recollection is bound to get confused as to the source of origin of CS(OS) No. 1662 of 2012 Page 4 of 10 the goods and perceive the Defendant's product as having emanated from the Plaintiff. He highlighted the following three features:
(i) The two products are identical in respect of their mark, device, label, brand name, design, shape and arrangement of features.
(ii) The class of customers for the rival products, including traders or persons dealing with automobile parts and mechanical seals primarily, would overlap.
(iii) The trade channels through which the products are sold i.e., shops selling automobile parts, are also identical.
6. He submitted that permitting the Defendant to continue manufacturing and marketing the aforementioned product bearing the aforementioned identical mark, device, design, layout, shape as that of the Plaintiff's CORAL MECHANICAL SEAL is likely to cause irreparable and unquantifiable damage to the Plaintiff's business, and would tarnish the reputation that the Plaintiff has built over many years, thereby resulting in loss of its business and sales due to the confusion of the innocent purchaser. There would be dilution of the goodwill of the mark in general. He points out that while the Plaintiff's application for registration was under Class 7 issued on 19th November 2010, the Defendant applied for registration of the identical mark clearly one year later, i.e., on 17th October 2011. According to him, the Plaintiff had commenced its business in 2005 and its products had, in a span of over and a half decade, become well-known for their CS(OS) No. 1662 of 2012 Page 5 of 10 quality and high standards. Apart from answering the description of a mark under Section 2(m) of the Trade Marks Act, 1999 (TM Act), it is submitted that the Plaintiff is also the owner of the copyright in the packaging and design of the said product within the meaning of 'artistic work' under Section 2(c) of the Copyright Act, 1997 (Copyright Act). He relies on the advertising given by the Plaintiff in various newspapers (Annexure C Colly) the sale and advertisement figures (Annexure D), a list of several invoices (Annexure E) which go to show that the Plaintiff has been in the trade of manufacturing and selling the product under the said trademark prior to the Defendant. He relied on an invoice dated 18th November 2005 evidencing sale of the product by the Plaintiff since then. He submitted that even as recently as 3rd December 2009 and 20th June 2011the Plaintiff has been supplying the product to the Defendant (PW 1/9). He submits that thereafter the Defendant has, in a dishonest manner, virtually copied the mark, design and packaging of the Plaintiff's product.
7. Mr. Manish Kaushik, learned counsel for the Defendant, on the other hand, submitted that Plaintiff was not itself engaged in the manufacture of mechanical seals and was merely a dealer in the said product. According to him, the carton of the Plaintiff is a cheap imitation of the carton of the Defendant. While the carton of the Defendant has the manufacturing date, quantity, MRP etc., describes the Defendant as manufacturer and contains a CS(OS) No. 1662 of 2012 Page 6 of 10 logo CST meaning 'Coral from Sagar Trading Company', the word 'S' on the Plaintiff's packaging has no connection at all with the Plaintiff. It is submitted that around 2006 when the Plaintiff started dealing in mechanical seals, the Defendant was already a well-known name. Referring to the registration certificate dated 26th February 1987 under the Delhi Shops & Establishments Act, 1954, it is submitted that the Defendant opened his shop in Ajmeri Gate in 1985 and has been continuously in business since then. It is claimed that he has been selling pumps spare parts and mechanical seals since 1987. He obtained sales tax registration in 2005 and started manufacturing mechanical seals under the brand name CORAL.
8. Counsel for the Defendant placed considerable reliance on an invoice dated 30th September 2005 which shows the buyer as 'Machinery Zone - Kashmeer' with parties TIN No. '01542020105'. Another invoice dated 26th November 2005 issued by the Defendant does not indicate the name of the purchaser and is purported to be "a cash sale". There is a third invoice of 28th November 2005 addressed to a party in Delhi. These invoices are relied upon to show that the Defendant has been selling mechanical seal products earlier than the Plaintiff.
9. Mr. Sushant Singh has drawn the attention of the Court to information gathered by the Plaintiff about the identity of the purchaser 'Machinery Zone CS(OS) No. 1662 of 2012 Page 7 of 10
- Kashmeer' whose TIN No. is shown in the invoice dated 30th September 2005 issued by the Defendant. The said firm in fact obtained the sales tax registration only on 5th June 2009. Prima facie, it appears doubtful whether in fact that entity could have purchased the product in question from the Defendant in 2005. In any event, this would be a matter for evidence.
10. The other feature is that although the Defendant claims to have been in business from 1987 onwards, there is not a single invoice of that date to substantiate such a claim. The Defendant claims that like the Plaintiff it being manufacturing the Coral Mechanical Seals only in 2005. Both the Plaintiff and Defendant have produced invoices of 2005. While one of the Defendant's invoices, as noted above, does appear prima facie to be doubtful, the validity of the invoices can be tested at the trial. The Defendant would have to explain the invoices produced by the Plaintiff which show that the Defendant has been purchasing products from the Plaintiff even as late as 2009 and 2011.
11. There are two factors that are striking. One is that there is very little to distinguish one trade mark and packaging from the other. In the Plaintiff's application for registration dated 19th November 2010 it has been stated that it had been engaged in manufacture and marketing of mechanical seals in 2005 and exclusively, continuously and uninterruptedly. The date of use is in CS(OS) No. 1662 of 2012 Page 8 of 10 December 2005. In the Defendant's Application made almost a year later on 17th October 2011 for a nearly identical trademark, the user date is shown as four months prior to the Plaintiff, i.e., 12th August 2005. However, there is no invoice of 12th August 2005 produced by the Defendant. The last invoice is of 13th September 2005 which shows the aforementioned TIN no. which appears to be of a firm which obtained its sales tax registration much later in 2009.
12. Counsel for the Defendant sought to place reliance on the decisions of this Court in L.D. Malhotra Industries v. Ropi Industries (1976) ILR Delhi 278 and Novartis AG v. Crest Pharma Pvt. Ltd. 2009 (41) PTC 57 (Del). The said decisions reiterate the settled position that the mere filing of an application prior in time does not per se confer any right "if the other party is in fact an actual prior user of the mark in question". In the present case, it is not possible at this stage to conclude even prima facie that the Defendant is the actual prior user of the mark. This could be decided only after evidence is recorded. The Plaintiff having claimed user since December 2005 has in fact produced an invoice of 10th November 2005. What also weighs in favour of the Plaintiff at this stage is the name of the firm of the Plaintiff being 'Coral Seal & Ceramics'.
13. In the above circumstances, this Court is of the view that the Plaintiff has CS(OS) No. 1662 of 2012 Page 9 of 10 a prima facie case in its favour for making absolute the interim injunction granted by the Court on 1st June 2012. The balance of convenience is also in favour of the Plaintiff.
14. For all of the aforementioned reasons, this Court makes the interim order passed by it on 1st June 2012 absolute during the pendency of the suit. It is, however, clarified that the above observations are prima facie and will not influence the final decision in the suit.
15. The application is disposed of.
S. MURALIDHAR, J.
JULY 26, 2013 akg CS(OS) No. 1662 of 2012 Page 10 of 10