Delhi High Court
Sears Roebuck And Company vs Happy House (Tv) Manufacturing Company ... on 1 December, 1990
JUDGMENT Sunanda Bhandare, J.
1. This application under Order 39, Rules 1 and 2 of the Code of Civil Procedure has been filed by the plaintiff praying that the defendants be restrained by an order of injunction from using the trade mark SEARS. The brief facts are as follows:
2. The plaintiff is an American Corporation with its head quarters in Chicago, Illinois. It also operates large number of retail stores in Canada, Mexico and South American countries. In its retail stores the plaintiff affects sales of goods which cater to human need which also includes televisions. The plaintiff has also its offices in Hong Kong, Korea, Singapore, Japan and Taiwan in the East and in England and Germany in Europe and in Australia. The plaintiff claims to have engaged over 3, 00, 000 employees and claims that it has customer base of 40 million households. According to the plaintiff apart from the sale in the retail stores, the plaintiff also affects sales by orders for which purpose it distributes and sells catalogues. The plaintiff also claims to advertise in media which advertises its stores and products in several countries including India. According to the plaintiff eleven 1984 Sears Christmas catalogues and eight Sears Fall/Winter catalogues were sent to India. The case of the plaintiff is that the plaintiff is popularly known as SEARS and is well known to large sections of the Indian population especially to the more affluent class who for business, education or pleasure travel abroad.
3. On 14th May 1985 an advertisement appeared in the Economic Times. Among other things the following was also announced :
"SEARS joins hands with ELCOT to bring to consumers the results of the state-of-the-art technology in entertainment electronics".
4. This advertisement was issued by Happy House (TV) Mfg. Division Pvt. Ltd. i.e., defendant No. 1 herein. A notice dated 28th June, 1985 was, therefore sent by the Attorneys of the plaintiff calling upon defendant No. 1 to cease and desist from using SEARS. A similar letter was also sent to Electronics Traders (Regd.) defendant No. 2. In response to this notice, a letter was received from the Attorneys of Coral Electronics (Pvt.) Ltd. Madras who claims to be the proprietor of the trade mark SEARS defendant, No. 3 herein. The plaintiff there after sent letter to defendant No. 3 requiring defendant to inform how defendant No. 3 had allowed defendant No. 2 to use the trade mark SEARS. Defendant No. 3 how ever did not send and reply to this letter. Thereafter since the plaintiff did not have any proof of its reputation in India, requested its Attorney to carry out a survey to determine the extent of reputation of SEARS in India. Consequently an advertisement was issued in the Times of India on 17th November 1985 and the Statesman issue of 17th November 1985 to the following effect :
Notice - Any person who have visited the U.S.A. or have otherwise heard of the SEARS chain of stores organized and run by Sears, Roebuck and Co. please contact ................
5. In reply to the said advertisement, the Attorneys of the plaintiff received 127 letters from persons claiming to the acquainted with the SEARS chain of retail stores. Most of these people who had responded to this advertisement had some time or other dollar their shopping in SEARS stores. Some of them also claim to have a placed their orders after seeking the catalogue. The Attorneys of the plaintiff thereafter sent questionnaire requiring them to answer certain questions. One of the questions was as follows :
"If you saw SEARS written in relation to any goods would you think they had a connection with Sears, Roebuck and Co".
93 persons responded to the questionnaire. On the basis of this advertisement and the questionnaire, the plaintiff claims that SEARS has substantial reputation and goodwill in India. It is, therefore, the case of the plaintiff that the use of SEARS in the advertisement issued by the defendants of their trade mark SEARS-ELCOT has caused and likely to cause deception and confusion in the market and the people in the trade and consumers are likely to think that SEARS-ELCOT televisions which are sold in India has some connection with the plaintiff and because of this people are likely to be confused and the goods are capable of being passed off as the goods of the plaintiff. The plaintiff, therefore, filed the suit in this Court seeking permanent injunction against the defendants from using SEARS as its trade mark. The present application has been filed in the said suit seeking interim relief by way of a temporary injunction.
6. It was submitted by the learned counsel for the plaintiff that any lose of reputation or damage to the goodwill attached to its trade mark will be irreparable and incapable of being made good in money Learned counsel submitted that the trade mark is associated with the defendants are allowed to use the said trade mark, irreparable damage will be caused to the plaintiff. It is further substantial use of the trade mark SEARS and the conduct of the defendants in adopting SEARS is dishonest. The plaintiff submitted that it is not necessary for the plaintiff to have a physical commercial presence in India before it can succeed in a passing off action; that the plaintiff has a reputation in this country which will be injured because of the confusion caused by the defendants and thus even though the plaintiff's business is primarily carried on abroad, the plaintiff is entitled to get an order of injunction restraining the defendants from using the trade mark SEARS. It was further submitted that the reputation and goodwill are inter-linked and inseparable. If a person has a reputation in India derived from sources other than the physical commercial presence, that reputation can be protected by a passing off action. Learned counsel submitted that the reputation in the modern world is not confined within political frontiers. That because of the jet travel SEARS is known even in India and as such the plaintiff is entitled to protection from this Court Learned counsel further submitted that the response received to the advertisement and the questionnaire shows that several persons who normally reside in India but have done their shopping SEARS. Sears elsewhere in the world admitted that the use of the name SEARS by the defendants was likely to create confusion. Learned counsel submitted that at least eleven persons had received SEARS catalogue in India and emphasised that even if the plaintiff is able to show that one customer had substantial transaction with the plaintiff, it creates a protectable right and the plaintiff is entitled to the injunction prayed for. Learned counsel relished on ANHEUSER - Busch In vs. Budweiser Budvar (1984 FSR 413), Poiret v. Jules Poiret and Anr. (1920 RPC 177), La Societe Anonyme des Ancients Establishments Panhard et Levassor v. Panhard Levassor Motor Co. Ltd. (1901, 2 Ch. 513), Sheraton Corporation of America v. Sheraton Motels Ltd. (1964 RPC 202), C & A Modes and Anr. v. C & A (Waterford Ltd.) and Anr. (1978 FSR 126), Metric Resources Corporation v. Leasemetrix Ltd. and Anr. (1979 FSR 571), The Anthetes Foot Marketing Associates Inc. v. Cobra Sports Ltd. and Anr. (1980 RPC 343), Globelegance B.V. v. Sarkissian (1974 RPC 603), Esanda Limited and Anr. v. Esanda Finances Ltd. (1984 FSR 96), Orkin Exterminating Co. Inc. v. Pestco Co. (80 C.P.C. 153) and a judgment of this court in B.K. Engineering Co. v. UBBL Enterprises (1985 PTC Page 1), in support of his contention that physical presence of the plaintiff in India is not necessary in succeeding in a passing off action.
7. On the other hand, it was submitted by the learned counsel for the defendants that is in order to maintain a passing off action in India, the plaintiff must establish that it has sold its goods namely televisions bearing the trade mark SEARS in India; (ii) that it has business in India and has existing customers in India; and (iii) that it has an international reputation in respect of televisions which spills over to India and is accompanied by the existence of its customers for SEARS televisions in India. Learned counsel submitted that there is no possibility of any confusion taking place because the mark used by the defendants is SEARS-ALCOT whereas the mark used by the plaintiff is just SEARS. Furthermore, in all the advertisements issued by the defendants including the advertisement dated 14th May 1985 the defendants have clearly stated that its organisation is promoted and managed by Indian entrepreneurs. Coral Electronics Pvt. Ltd. Madras owns the trade mark SEARS and has used the said trade mark ever since 1982, in respect of televisions. There was an arrangement between defendant No. 1 and defendant No. 3 whereby defendant No. 1 commenced manufacture and sale of television sets bearing the trade mark SEARS in October 1982. Subsequently, a joint, sector venture was set up with Electronics Corporation of Tamil Nadu Limited, a Government of Tamil Nadu Undertaking whose trade mark ELCOT was added as a suffix member to the trade mark SEARS to form hybrid the mark SEARS-ALCOT. The advertisement was issued to convey the legal arrangement between defendants 1 and 2 and defendant No. 3. So, there was no question of any intention to mislead the public because it clearly indicated that the joint venture was promoted by Indian entrepreneurs. Learned counsel submitted that the plaintiff is guilty, of delay amounting to latches and acquiescence and has disentitled itself from seeking the relief. Learned counsel further submitted that the defendants have a large sales turnover. In the year 1988-89 itself the turnover exceeded Rs. 9 crores. Learned counsel submitted that there is not an iota of evidence to show that the plaintiff has sold any television in India with the trade mark SEARS and the plaintiff does not have any activity directed to the Indian market. Rather it is defendants 1 and 2 who have adopted the trade mark SEARS and has cointed it from SEE and HEAR. Learned counsel submitted that the judgment in Anheuser-Bush's case (supra) applies to the case of the plaintiff in all force and the injunction application should be dismissed. Learned counsel further submitted that the relief claimed by the plaintiff cannot be granted at an interlocutory stage without evidence. Learned counsel submitted that the SEARS is a dictionary word and not invented by the plaintiff. There is large distance between U.S.A. and India The plaintiff has no office, no factory and no commercial sales in India. The plaintiff has not even shown token sales of televisions in India except contending that 11 catalogues were sent to India. No customer in India has been produced to prove that he has bought a SEARS television. At best, the plaintiff can only claim to have reputation in India but the reputation is only of a retail chain store in U.S.A. There is no evidence on record excepting the advertisement and the response to the questionnaire without placing the evidence on record. Learned counsel submitted that it is necessary for the plaintiff to prove its reputation in India before it obtain any order of injunction against the defendants otherwise the whole business of the defendants will be brought to a stand-still and will cause tremendous losses which the plaintiff is incapable of bearing.
8. The admitted facts which emerge therefore are.
(a) The plaintiff carries on business abroad and it does not have physical commercial presence in India : and
(b) The plaintiff has not got the trade mark SEARS registered in India and nor has the plaintiff used the said trade mark in India.
9. Undoubtedly, reputation in the modern world is not confined within political frontiers. However, in the present case, considering the evidence placed by the plaintiff on record. I do not think in is necessary for me to go into the question whether physical commercial presence in India is necessary to protect a right in a passing off action. In the present case, the nature of activity of the plaintiff and that of the defendants is totally different. The plaintiff does not manufacture televisions but is a chain of retail stores which sells all sorts of consumer items; whereas the defendants are manufacturers of televisions and do not sell all sorts of consumer items : any other goods excepting televisions. It is thus unnecessary to refer to the large number of authorities cited by the learned counsel for the parties because in all most all the cases there was some commercial transaction in the country where the action was initiated.
10. The short question for determination is whether the plaintiff's reputation and goodwill in India as a retail chain stores entitles it to the injunction prayed for against the defendants restraining the defendants from using SEARS-ALCOT as their trade mark. The plaintiff has placed on record the evidence collected by it pursuant to an advertisement issued by the plaintiff on 17th November, 1985 in the Times of India and the Statesman and the subsequent questionnaire. The plaintiff has received only 127 letters from persons claiming to be acquainted with SEARS chain of retail stores. Majority of them had some time or the other done their shopping in SEARS stores abroad. Only 93 persons replied in the positive to the questionnaire whether if they saw SEARS written in relation to any goods they would think that they had a connection with Sears. Roebuck and Co. In a large country as India with a population of more than 8, hundred million the response to the advertisement issued by the plaintiff and the questionnaire to say the least is rather dismal. However, great emphasis was laid by the learned counsel for the plaintiff on the decision in Metric Resources Corporations case (supra) in support of his contention that even if a small business connection in this country is proved it is sufficient to create a protectable right because as held in Metric Resources Corporations case (Supra) even if the plaintiff is able to show one particular customer having substantial transaction with the plaintiff, it is enough to prove the reputation and goodwill of the plaintiff. I do not think that the Metric Resources Corporations case (supra) helps the plaintiff in any manner. From the answers received to the questionnaire which have been reproduced by the plaintiff in its plaint, it appears that none of these persons have purchased or known of the plaintiff's manufacture of televisions. All these persons have spoken about the reputation of the plaintiff as a retail store abroad. None of them have spoke about the reputation of the plaintiff as a television manufacturer. The plaintiff has also not placed any evidence on record to show that the plaintiff has an international reputation in respect of televisions. Not a single person claims to be a customer of SEARS television in India. In the case of Metric Resources Corporations case (Supra) it was shown that there were substantial transaction with one particular customer in England. This is not so in the present case. Now, admittedly, few persons who have re-acted to questionnaire are from the affluent educated class who have done their shopping abroad. This may prove the reputation of the plaintiff as a retail chain stores abroad. It may also indicate that the reputation of the plaintiff as a large retail chain stores has also reached India. However, I fail to understand how the use of SEARS-ELCOT for televisions in India is likely to mislead the people. Certainly, it cannot be said that the class of people who have responded to the advertisement would be misled by the advertisement of SEARS-ELCOT televisions by the defendants.
11. In contrast to this, the defendants have placed on record evidence to show that they started manufacture of televisions as early as in the year 1982 with the trade mark SEARS. The advertisement which, according to the plaintiff, was objectionable is of 14th May 1985. Whatever evidence the plaintiff has placed on record is subsequent to this advertisement. There is nothing on record to show the reputation of the plaintiff prior to 1982 or 1985. It is also difficult to accept the contention of the plaintiff that the sale of televisions by the defendants with the trade mark SEARS-ELCOT is likely to cause confusion in the minds of the customers. The advertisement issued in the Economic Times on 14th May 1985 clearly states that the joint venture is promoted by Indian entrepreneurs. Since the plaintiff has not placed any evidence on record, it is difficult to accept the claim of the plaintiff that on the basis of reputation and goodwill as retail store abroad, the plaintiff is entitled to the relief of inter-locator nature.
12. I also find that the balance of convenience is also not in favor to the plaintiff. The defendants have a large turn over and have been manufacturing television with the trade mark SEARS since 1982. If the defendants are now restrained from using the said trade mark, they are likely to suffer irreparable loss which cannot be compensated in terms of money.
13. Thus unless evidence is brought before the court showing the reputation and goodwill of the plaintiff in India as a manufacturer of televisions and substantial evidence of the reputation and goodwill of the plaintiff as a retail store in India is placed on record, this court cannot grant the injunction restraining the defendants as prayed for by the plaintiff. The relief sought for is the plaintiff can be considered when the suit is finally decided.The injunction application is, therefore, dismissed with costs.