Delhi District Court
Diageo Brands B. V vs M.S. Mayya on 8 May, 2014
IN THE COURT OF SH SUNIL KUMAR AGGARWAL: ADDL.
DISTRICT JUDGE (CENTRAL) 10: DELHI
Diageo Brands B. V.,
Molenwerf 1012,
1014 BG, Amsterdam,
The Netherlands. ....Plaintiff
VERSUS
1.M.S. Mayya, Company Secretary Khoday India Ltd.
No. 53 Kannayakana Agrahara Anjanapura Post, Bangalore - 560062
2. Khoday Breweries Ltd.
Brewery House, 7th Mile
Kanakpura Road,
Bangalore - 560062 .....Defendants
Plaint presented on 12.04.1996
E XP A R T E J U D G M E N T:
1. This suit for permanent injunction restraining infringement of trademark, passing off, dilution, rendition of account of profits and delivery up of impugned goods was filed by United Distillers Plc as plaintiff no. 1 and United Distillers India Ltd. as plaintiff no. 2 through Mr. Ronald James Gilchrist, Company Secretary and Mr. Sumant Bakshi, CEO stating that plaintiff no. 1 trading as William Sandorson & Sons and John Walker & Sons was incorporated as a company under the laws of Scotland as a subsidiary of English Suit No.151 of 2012 Page No. 1 of 12 Company Guinnes Plc while plaintiff no. 2 is an Indian Company and have been carrying on business as distillers, bottlers, blenders, exporters and distributors of large verities of scotch whiskeys under popular brands JOHNNIE WALKER and VAT 69 etc.. One of the finest scotch whiskeys of the plaintiff is a blend called VAT 69. It was adopted by Mr. William Sandorson who had established a highly respected Scotch Whiskey house in 19th Century. He was confronted that the challenge of determining the finest blend out of his various blends. Mr. Sandorson placed almost a 100 of his different blends of malt and grain whiskeys in separate containers which were individually number. Thereafter expert blenders and friends were invited and asked to choose the best blend. The blend contained in cask no. 69 was unanimously chosen as the best and on the said basis Mr. Sandorson decided to launch said blend under the name VAT 69. The trademark thus was first point in 1880s. For a century now VAT 69 Scotch whiskey has been sold in green coloured glass bottles with the mark appearing on it in bold stencilled lettering just as it used to be done when the whiskey was sold by cask. The plaintiffs, ever since the formal launch of blend has spent huge amount on advertisement and sales promotion in order to place apart from the other ones. On the background of tremendous efforts put by the plaintiff, the trademark VAT 69 acquired instantaneous recognition and became identifiable by the members of trade and public solely with the plaintiff. In 1930 the brand became known all over the world from Holland to Argentina. One of the first advertisements of VAT 69 was published in The Times of India in 1925. About a million cases of VAT 69 are sold annually in more than 164 countries. Due to exquisite and incomparable quality of blend, VAT 69 not only has impressive sales but also enviable amount of goodwill and reputation. Suit No.151 of 2012 Page No. 2 of 12
2. VAT 69 scotch whiskey was first introduced in India in early 1900 when it was sold through stores such as "Spencer & Co." in Bombay, Madras, Karachi and Lahore. Subsequently the direct sales to Indian Public decrease due to import restrictions but the brand continued to be available and the patrons started getting their stock from duty free shop and local contacts. Subsequently it became freely available in hotels, restaurants, bars and pubs. Apart from the common law rights, the plaintiff has statutory rights over the trademark VAT 69 in India by virtue of registration of the mark vide number 5926 dated 29.09.1942 in class 33. It was originally registered in favour of William Sanderson & Sons Ltd. which had assigned it to the plaintiff in 1989. The plaintiff thereafter was registered as a subsequent Prop. of the trademark. The association of plaintiff with the brand is so inseperable that any attempt by a third party to use the mark VAT 69 or any mark similar thereto would mislead the consumers and members of trade by causing them confusion at plaintiff's cost. The plaintiff therefore, has retained its exclusivity over the trademark by maintaining strict vigil for any violation of its proprietary rights at all times and has been opposing its use by third parties.
3. The plaintiff was also trading as M/s John Walkers and Sons Ltd., a company incorporated under the laws of United Kingdom who was the owner of trademark JOHNNIE WALKER Red Label in respect of whiskeys which was previously known as old highland whiskey. The said product since its inception has been sold in unique square shaped bottles. It also has a distinctive trade dress in terms of get up, lay out and arrangements of features comprising three labels. The square shaped bottles and the distinctive labels appearing thereon including the central slanted label were instrument in enabling the plaintiff to set apart its Suit No.151 of 2012 Page No. 3 of 12 JOHNNIE WALKER Red Label from other blends available at that time. The blend was introduced in India in early 1900 which soon left and indelible mark in the minds of consumers and persons of the trade. The shape of the plaintiff's bottle is registered in various companies including China, Germany, France, Indonesia, Japan and United States.
4. The defendant no. 2 has been carrying on business of manufacture and sale of spirituous liquors by defendant no. 1 appears to be the principle officer of its associate company. In August, 1991 the plaintiff came to know of the impugned trademark VAT 999 of the defendant through scotch whiskey association. The product however was not seeing in the market until November, 1992 when a sample was procured by the plaintiff's agent. Even then the products bearing impugned trademark were not available in the market in commercial quantities. When the impugned produced were again seen towards the end of 1994, the plaintiffs through their solicitors send a cease and desist letter dated 11.01.1995 to defendant no. 2 calling upon them to give up the un authorized and unlawful use of mark VAT 999 and infringing trade dress of JOHNNIE WALKER Red Label bottle. The defendant however refuse to comply with the fair requisitions of plaintiff by their reply dated 05.02.1995. The plaintiff thereafter attempted to settle the matter with defendants for some time but on their adopting obdurate stand, the plaintiffs have come up in this suit without undue delay.
5. The defendants have adopted the trademark VAT, the numerals 999, square shaped bottle, the stencilled lettering style in respect of the composite trade mark and slanted central label with bold coloured border and red inner portion which are the key, essential and domining features of both the plaintiff's Suit No.151 of 2012 Page No. 4 of 12 product. Given that the public is generally unaware of the specific corporate structure of used products they buy, but is aware that diversification, mergers, acquisitions and operations through subsidiaries is a fact of life, it is reasonable to believe that the adoption of trade dress and trademark of the plaintiffs by the defendant would lead to confusion as to the sponsorship of either or both plaintiff's product. The misrepresentation would succeed in its target as the tie up between plaintiffs has been publicized and the relevant class of consumers is expecting to see the locally bottled products of plaintiff in the open market in India. The defendants products are then likely to be immediately associated with those of plaintiff and purchased under mistaken belief of nexus.
6. The acts of infringement and passing of the defendants are further bound to erode the distinctiveness of plaintiff's product leading to their dilution. On fining that VAT 999 does not bear the same finnesse and quality as VAT 69 and JOHNNIE WALKER Red Label brand they are bound to regard the product as damp one from the stable of plaintiff thereby adversely hitting the goodwill and reputation painstakingly built up by the plaintiff over the years. The plaintiff also commissioned a market survey by an independent agency in December, 1995 to gouge the effect of the use of trademark VAT 999 by the defendant to find that they would be high degree of confusion between the competing products VAT 69 and VAT 999.
7. The defendants have malafidely chosen the square shaped bottle which is identified with the products of plaintiff so as to give an impression to the public that their bottle comes from the same company that markets JOHNNIE WALKER Red Label and thus expected to be of same level of quality as is the tradition with plaintiff. The defendants copying of get up, lay out and Suit No.151 of 2012 Page No. 5 of 12 arrangement of features of the plaintiff's bottle so slavish that the labels have been copies identically. It is estimated that plaintiff has thereby suffered a loss atleast to the tune of Rs. 5,00,000/ although the loss to goodwill and reputation cannot be ascertained in money terms.
8. In written statement the defendants have raised preliminary objections to the maintainability of suit. It is stated that the plaintiff does not enjoy statutory rights in the shape of bottles as it has not been registered in their name as a design. Further no copy right in the label is claimed which in any case must have expired. The suit suffers from misjoinder of causes of action as JOHNNIE WALKER Red Label is not a registered trademark in India. The defendant on the other hand is a reputed industrial house manufacturing various qualities of papers distinctly identified by consumers, dealers and distributors by the logo printed on every label indicating its origin. The basis of popularity in sales of their product is not much as the words and numbers but the reputation and logo of the house of Khodays. The defendants product VAT 999 being used in relation to whiskey, brandy, rum and gin all sold in square shaped bottled with affixed labels, is neither identical nor deceptively similar to VAT 69. There is therefore, no likelihood of deception or confusion to anyone . It is contended that the suit suffers from inordinate delay, latches and acquiescence.
9. Defendant no. 2 has been using the fancyfull trademark VAT 999 in relation to letters since 1991 after honestly adopting it. They have also filed an application for its registration under no. 675559 which is pending. There has been gradual increase in the sales turn over of the products of defendants under the said trademark over the years with corresponding rice in promotional expenses. The defendant thereby his carved a niche in the Indian market through Suit No.151 of 2012 Page No. 6 of 12 the products being sold under trademark VAT 999 without a single instance of confusion being brought to their notice. The nature of goods, their price and class of customers are the material factors which obliterate the likelihood of their products being mistaken for the foreign liquor of plaintiffs. On merits defendants stated that the history of adoption of mark VAT 69 is irrelevant for present purposes. While the plaintiffs VAT 69 is sold in green coloured bottles, the defendants VAT 999 is sold in transparent non coloured bottles. There is therefore, no scope for confusion or possibility of latter being passed off as the whiskey of plaintiff. The registration of plaintiff's mark in other countries is irrelevant as the law of Trademarks is not extraterritorial. Further the registration of square bottle get up label of plaintiff in Canada is subject to disclaimer i.e. the right to the exclusive use of a bottle of the shape depicted is disclaimed apart from the distinguishing guise. It is denied that there was any attempt by the plaintiff for settlement. The ploy has been cooked up as an excuse for the unexplained delay in filing the suit. The market survey report has been denied by the defendants terming it to be unreliable having not been conducted according to the established principals adopted by the plaintiff in their own country and following the guidelines laid down in Whitford J. Imperial Group Vs. Phillip Morris, (1984) RPC 293. On these averments the dismissal of suit was urged.
10. Replication is a formality of reiterating the contents of plaint and refuting those of the written statement.
11. By an interim order dated 23.04.1996 the defendants were restrained from selling, offering, advertising directly or indirectly dealing in whiskeys under the trademark VAT 999 or any other identical or deceptively similar Suit No.151 of 2012 Page No. 7 of 12 trademark.
12. By way of amendment applications, which were allowed, the plaintiff incorporated the various changes in its name and those of the proprietors of relevant trademarks. It was stated that the name of plaintiff no. 1 was changed to United Distillers Ltd. and then to United Distillers & Vintners (ER) Ltd. on 27.02.1998. Vide assignment deed dated 10.11.2000 effected 28.04.2000 the rights were assigned to UDV (SJ) Ltd. The said company further assigned it to United Distillers and Vintners (SJ) B. V. vide assignment deed dated 10.11.2000 effective from 31.08.2000. It was further assigned to Guinness United Distillers & Vintners B. V. of Amsterdam, The Netherlands, by a deed of assignment dated 24.07.2001 effective from 01.12.2000. The amended plaint in the name of said company was filed through Ms. Geraldine Mary Patricia Downey, attorney. The said company further underwent change of name to Diageo Brands B. V. w.e.f. 28.10.2003. It is claimed that the proprietorship of relevant trademarks now vests in this company and the second amended plaint was filed through Ms. Caron Tayler, Sr. I.P. Counsel.
13. The defendant was proceeded exparte on 27.08.2001 which order was set aside on application of defendant no. 2 on 12.11.2002. Simultaneously the interim order was directed to continue till further orders.
14. The suit was transfered to district courts in October, 2003 on enhancement of pecuniary jurisdiction. By this time about 5 years were consumed by the parties in settlement of which however could not come through. Following issues were framed for trial on the basis of pleadings on 21.11.2005.
1. Whether the adoption and use of the trademark VAT 999 by the Suit No.151 of 2012 Page No. 8 of 12 defendants amounts to infringement and passing of plaintiffs registered trademark VAT 69? OPP.
2. Whether the distinctive square shape bottle and get up use by defendant is respectively similar to the trade dress of the plaintiffs product Johny Walker Red Label and amounts to passing off the same? OPP.
3. Whether the plaintiff enjoys statutory rights to the Johny Walker get up in India and has registered the shape of the bottle and get up as a trademark or as a design?
4. Whether the defendants are guilty of infringing the plaintiffs trademark rights and of passing off their product for and as the product of the plaintiff? OPP.
5. Whether the defendants are liable to the restrained by the permanent injunction? OPP.
6. Relief.
15. To substantiate their case plaintiff filed affidavit of Sh. Sridhar Iyer, Director Finance as PW1. He was even partly cross examined on three occasions but before his cross could be completed, he left the employment of plaintiff.
16. The defendant was again proceeded exparte on 20.07.2009 which order was recalled on 18.03.2010. Sh. Sunil Vasudeva. thereafter was proposed to be examined by the plaintiff but ultimately the affidavit of Sh. Malay Dikshit, Attorney of the plaintiff was filed as Sh. Vasudeva had also left by that time. On the application of plaintiffs U/o 1 rule 10 CPC, plaintiff no. 2 was dropped from the array of parties on 03.05.2012.
17. The defendant was yet again proceeded exparte on 01.12.2012 and Suit No.151 of 2012 Page No. 9 of 12 did not turn up. Sh. Dikshit therefore, tendered his affidavit on 24.05.2013 therein stating the facts and tendering his Power of Attorney Ex. PW1/1, brief history of VAT 69 Ex. PW1/2, photographs of the glass bottle Ex. PW1/3, advertisement of 1925 Ex. PW1/4, copies of other advertisements in magazines Ex. PW1/5, article on VAT 69 in The Economic Times dated 09.10.1995 Ex. PW1/6, extract of the World Book of Whiskey Ex. PW1/7, legal proceedings certificate Ex. PW1/8, copies of registration certificates in relation to VAT 69 pertaining to other countries Ex. PW1/9, a write up on JOHNNIE WALKER Red Label Ex. PW1/10, photograph of the said product Ex. PW1/11, advertisement published in newspaper dated 06.07.1924 Ex. PW1/12, extract of the book containing reference to JOHNNIE WALKER Red Label Ex. PW1/13, registration certificate Ex. PW1/14, Deeds of assignment Ex. PW1/15, legal proceedings Certificate for JOHNNIE WALKER Ex. PW1/16, letter addressed to the defendant Ex. PW1/17, their reply Ex. PW1/18, photographs of the defendant products Ex. PW1/19, market survey report Ex. PW1/20. Besides identifying documents mark A to mark G.
18. I have perused the written synopsis filed on behalf of the plaintiff and carefully perused the record.
11. An application under Order VII Rule 14 & Section 151 CPC was filed by the plaintiff on 25.04.2007 for producing some documents which came into existence during pendency of the suit. The documents being relevant for the subject matter of the suit, the application was allowed.
Suit No.151 of 2012 Page No. 10 of 12
12. In exparte evidence, the plaintiff had earlier submitted the affidavit of Sh. Sridhar Iyer, Director (Finance) of Diageo India Pvt. Ltd. on 25.04.2007 after suffering heavy costs, which could be partly tendered as the trunk containing some of the documents had not been received alongwith the case file on its transfer. It took about one year to retrieve the trunk and by that time Sh. Iyer was found to have left the company. The court thereafter was informed on 10.12.2008 of the appointment of Sh. Apurv Mehta as the attorney of plaintiff. When however the witness did not appear on 03.03.2009 nor the imposed cost was paid, the exparte evidence was closed on 03.03.2009. The opportunity however was reopened on filing of an application under Section 151 CPC on behalf of the plaintiff. Finally Sh. Sunil Vasudeva, was appointed attorney on 04.02.2009 who filed his affidavit dated 01.05.2009 wherein the facts were stated and confirmatory assignment deeds of the trademarks for India were tendered as Ex. PW 1/1, the copies of certificates of changes in the names of subsequent proprietors of trademark Ex. PW 1/2, Power of Attorney Ex. PW 1/3, Shirt & Jeans procured from the defendants Ex. PW 1/4, Photographs of the defendant's products bearing impugned trademark Ex. PW 1/5, Record showing registration of trademark bearing no. 9789 Ex. PW 1/6, Advertisement of the trademark JOHNNIE WALKER under application no. 153266 in the name of plaintiff's predecessor in Trademarks Journals dated 24.03.1952 Ex. PW 1/7, Copy of order dated 08.07.2004 for transfer of the name of the plaintiff in respect of the trademark Ex. PW 1/8, Renewal Certificate Ex. PW 1/9, Documents showing registrations of trademark 'JOHNNIE WALKER' held by plaintiff Ex. PW 1/10 and Registration in respect of 'striding figure' device Ex. PW 1/11. The witness Suit No.151 of 2012 Page No. 11 of 12 also identified various documents from Mark 'A' to Mark 'N'. The exparte evidence was closed on 26.05.2009.
11. I have heard Sh. Manu Manocha, Adv. Ld. counsel for the plaintiff and carefully perused the file. The accepted legal proposition in an action for infringement right from the ratio in 'Kaviraj Pandit Durga Dut Sharma Vs. Navratanna Pharmaceuticals Laboratories, 1965 SCR 737', is that the plaintiff must make out that the use of defendant's mark is likely to deceive but when the similarity between competing marks is so close either visually, phonetically or otherwise to enable the court to reach conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's right have been violated. If the essential features of the trademark of the plaintiff are found to have been adopted by the defendant such as get up, packing, writing on the goods and packets, there are good chances of unwary customers assuming the trade origin of two to be common. It was held in 'American Home Products Corporation Vs. Mac. Laboratories Pvt. Ltd., 1986 PTC 71 (SC)' that the registration of trademark confers a valuable right upon the registered proprietor. Under Section 27 (1) of the 1958 Act, no person can institute any proceeding to prevent or to recover damages for the infringement of an unregistered mark. Simultaneously in an action for infringement, plaintiff is not required to prove the reputation of his mark.
Announced in the open court (Sunil K. Aggarwal)
on 8th May, 2014 Addl. District Judge (Central)10
Delhi.
Suit No.151 of 2012 Page No. 12 of 12