Madras High Court
Netsweeper Inc vs Netsweeper Technologies Private ... on 8 June, 2022
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
C.S. No.334 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment reserved on 09.02.2022
Judgment pronounced on 08.06.2022
CORAM
The Hon'ble Mr. Justice SENTHILKUMAR RAMAMOORTHY
Civil Suit (Comm.Div) No.334 of 2018
Netsweeper Inc.,
A company having its registered office at
Suite 4, 156 Columbia Street W.,
Waterloo, Ontario,
Canada, N2L 3L3
Rep. by its authorised signatory
Mr.N.Krishnan ... Plaintiff
vs.
1.Netsweeper Technologies Private Limited,
CIN:U72900TN2005PTC057943,
having registered office at No.5-11-1,
Arihant Majestic Towers, J N Road,
100 Feet Road, Koyambedu,
Chennai – 600 107.
2.Mr.C.Gajapathy,
Director and Shareholder,
Netsweeper Technologies Private Limited,
having registered office at No.5-1-1,
Arihant Majestic Towers, J N Road,
100 Feet Road, Koyambedu,
Chennai – 600 107.
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C.S. No.334 of 2018
3.Mrs.Haritha Gajapathy,
Director and Shareholder,
Netsweeper Technologies Private Limited,
having registered office at No.5-1-1,
Arihant Majestic Towers, J N Road,
100 Feet Road, Koyambedu,
Chennai – 600 107.
4.Netsweeper Technologies India Private Limited,
CIN:U72900TN2017PTC117540,
Having registered office at
No.4B, Soundarya Apartments,
Mel Ayanambakkam Main Road,
Mel Ayanambakkam, Chennai - 600 095.
5.Mr.Jagadeesh Sengodappa,
Director and Shareholder,
Netsweeper Technologies India Private Limited,
Having registered office at
No.4B, Soundarya Apartments,
Mel Ayanambakkam Main Road,
Mel Ayanambakkam, Chennai - 600 095.
6.Mr.Senthamaraikannan Pradeepkannan
Director and Shareholder,
Netsweeper Technologies India Private Limited,
Having registered office at
No.4B, Soundarya Apartments,
Mel Ayanambakkam Main Road,
Mel Ayanambakkam, Chennai - 600 095. ... Defendants
Civil Suit is filed under Order VII Rule 1 of the Code of Civil
Procedure, 1908 r/w Order 4 Rule 1A of the Original Side Rules and Section
134 (1)(C) of the Trademarks Act, 1999 praying that (a) the Defendant
Nos.1 to 6 be ordered and directed jointly or severally to pay to the Plaintiff,
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C.S. No.334 of 2018
a sum of INR 1,00,00,000/- (Indian Rupees one crore only) as damages for
passing off its products of software or service as and for the Plaintiff's
products or software of services by wrongfully associating themselves with
the Plaintiff and / or its affiliates;
(b) Permanent injunction restraining the Defendants, its / their
men, servants, agents, successors in business retailers, legal representatives,
assigns or any other person claiming through or under them, from in any
manner, whatsoever, using or otherwise dealing with the trademark / trade
name NETSWEEPER owned by the Plaintiff and / or any identical or
deceptively similar trademark / tradename to that of NETSWEEPER in any
manner whatsoever;
(c) Permanent injunction restraining the Defendant Nos.1 to 6 its
/ their men, servants, agents, successors in business retailers, legal
representatives, assigns or any other person claiming through or under them,
from in any manner, using, selling, licensing, or offering services,
advertising or otherwise dealing with the trademark / tradename
NETSWEEPER owned by the Plaintiff and / or any identical or deceptively
similar trademark / tradename to that of NETSWEEPER and thereby
passing off their products or software or programs or services as and for the
products or software or services of the Plaintiff in any manner whatsoever;
(d) Permanent injunction restraining the Defendants, its / their
men, servants, agents, successors in business retailers, legal representatives,
assigns or any other person claiming through or under them, from in any
manner or through any other entity, contacting the customers of the Plaintiff
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C.S. No.334 of 2018
for providing services by wrongfully associating themselves with the
Plaintiff / or its affiliates;
(e) The Defendants be directed and ordered to surrender to the
Plaintiff for destruction, the name boards, invoice / bills, prints, letter beads,
business cards, advertising materials and any other materials in the
Defendant's possession, which bears the trademark / tradename
NETSWEEPER of the Plaintiff.
(f) The Defendant Nos.1, 2 and 3 be directed to pay the
outstanding invoice payable to the Plaintiff towards the fee for the software
license availed by the first Defendant for the period from April,2017 to
December, 2017 vide invoice No.2111 dated 31.12.2017 for a sum of
Canadian Dollars (CAD)51753.01 and for the period from January,2018 to
March, 2018 vide invoice No.2121 dated 31.03.2018 for a sum of Canadian
Dollars (CAD)42604.04, totalling to Canadian Dollars (CAD) 94357.09
together with interest at 18% per annum until the date of payment of the
entire amount.
(g) A preliminary decree be passed in favour of the Plaintiff
directing the Defendant Nos. 1 to 6 to render account of all revenues
whether in liquid form or as assets by diverting the revenues by use of the
identical and / deceptively similar trademark / tradename NETSWEEPER
and / or passing off and (ii) a final decree be passed in favour of the Plaintiff
for the entire amount of revenues including assets purchased out of the
revenue thus found to have been made by the Defendant Nos.1 to 6 after the
latter have rendered accounts;
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C.S. No.334 of 2018
(h) The Defendants 1 to 3 be ordered and directed to pay to the
Government of India, including but not limited to, a sum of
Rs.43,48,631(Rupees Forty Three Lakhs, Forty Eight Thousand, Six
hundred and thirty only) with additional interest and penalty towards the
service tax debts owed to the Government of India by the first Defendant
and for costs of the suit.
For Plaintiff : Mr.Arun C.Mohan
Asstd. By Mr.S.Aravindan
for M/s.Fox Mandal & Associates
For Defendants : No appearance
JUDGMENT
The suit was filed for permanent injunctions to restrain the Defendants from infringing the Plaintiff's corporate name 'NETSWEEPER' and from passing off the Defendants' products as that of the Plaintiff's. The Plaintiff has also prayed for damages in a sum of Rs.1,00,00,000/-.
2. In spite of service of summons on all the six Defendants, Defendants 4 to 6 did not enter appearance. Therefore, Defendants 4 to 6 were set ex parte on 26.06.2019. As far as Defendants 1 to 3 are concerned, their right to file written statement was forfeited on 24.08.2020 and they were, subsequently, set ex parte on 10.09.2020. Pursuant thereto, the Plaintiff adduced ex parte evidence through N.Krishnan, an employee of the _____________ https://www.mhc.tn.gov.in/judis Page No.5 of 12 C.S. No.334 of 2018 Plaintiff, who was examined as P.W.1. 31 documents were exhibited as Ex.P1 to Ex.P31 through P.W.1.
3. The Plaintiff states that it is a company incorporated in the year 1999 under the laws of Ontario, Canada, and engaged in the business of Internet content filtering and web threat management. According to the Plaintiff, the trademark 'NETSWEEPER' was registered by the Plaintiff under classes 9 and 42 in Canada and USA in the year 2003 and 2006, respectively. The trade mark was subsequently renewed on 14.02.2017 and 18.11.2016, respectively. Further, the Plaintiff states that it is in the process of applying for registration of the said trade mark in India.
4. The suit was filed after discovering that the 4th Defendant had incorporated a company under the corporate name 'NETSWEEPER' on 13.07.2017 with the same objects as the first Defendant, which previously had a licence to use the corporate name 'NETSWEEPER'. The Plaintiff asserts that the above act amounts to passing off of the Plaintiff's goodwill and reputation. The incorporation certificate, Memorandum and Articles of Association of the Defendants 1 and 4 were exhibited as Exs.P1, P2, P6 and _____________ https://www.mhc.tn.gov.in/judis Page No.6 of 12 C.S. No.334 of 2018 P7 to corroborate the said contention. The Plaintiff has exhibited several communications and invoices to prove that the licence was terminated and regarding the amounts outstanding from the first Defendant to the Plaintiff. The Plaintiff has also exhibited the employment contracts of the 2nd and 3rd Defendants with the Plaintiff as Ex.P4 and Ex.P5 and their respective termination letters as Ex.P19 and Ex.P20.
5. On examining the plaint, proof affidavit and Exs.P9 to P11, the Plaintiff has established that it is the registered proprietor of the Trademark in Canada and USA under classes 9 and 42. Even though it has not registered the trade mark in India, the common law remedy of passing off is available to the Plaintiff under Section 134(1)(c) of the Trademarks Act, 1999. Consequently, the Plaintiff is entitled to succeed as regards prayers (c) to (f), (h) and (j). As the Plaintiff has failed to adduce evidence on the loss of profit incurred because of the incorporation of the 4 th Defendant, prayer (a) relating to damages is denied. Since the mark 'NETSWEEPER' is not a registered trade mark in India, prayer (b) is denied. As regards prayer (g), in the absence of accounts from the defendant, the _____________ https://www.mhc.tn.gov.in/judis Page No.7 of 12 C.S. No.334 of 2018 profits and the court fee thereon cannot be ascertained and paid. Therefore, prayer (g) is rejected.
6. Accordingly, Civil Suit (Comm.Div) No.334 of 2018 is decreed in terms of prayers (c) to (f), (h) and (j) of paragraph 22 of the plaint. The Defendants are also directed to pay the Plaintiff a sum of Rs.3,00,000/- (Rupees three lakhs only) as costs, which includes court fees of about Rs.1,59,000/-, lawyer's fees and other costs.
08.06.2022 Index : Yes Internet : Yes rrg Plaintiff's witness:
1. Mr.N.Krishnan : P.W.1 Documents exhibited by the Plaintiff:
Sl.N Exhibi Date Particulars of Documents o ts
1. Ex.P1 26.10.2005 Memorandum and Articles of Association _____________ https://www.mhc.tn.gov.in/judis Page No.8 of 12 C.S. No.334 of 2018 Sl.N Exhibi Date Particulars of Documents o ts
2. Ex.P2 03.11.2005 Incorporation Certificate of the first Defendant Company.
3. Ex.P3 13.05.2018 Master Data of the first Defendant Company
4. Ex.P4 10.10.2005 Employment Contract given to the second Defendant.
5. Ex.P5 01.04.2009 Employment contract given to the 3rd Defendant.
6. Ex.P6 12.07.2017 Incorporation Certificate of the 4th Defendant Company
7. Ex.P7 12.07.2017 Memorandum and Article of Association of the 4th Defendant Company.
8. Ex.P8 13.05.2018 Master Date of the 4th Defendant Company
9. Ex.P9 07.03.2006 Certificate of Registration of Trademark.
10. Ex.P10 18.11.2016 Renewed of registration of Trademark obtained in the United States of America
11. Ex.P11 14.02.2017 Renewal of registration of Trademark obtained in Canada
12. Ex.P12 01.01.2018 Bank Statement of the first Defendant to Company 31.01.2018
13. Ex.P13 21.03.2018 Email between the Plaintiff and the 2nd and 3rd Defendants.
14. Ex.P14 21.03.2018 Email thread between the Plaintiff and its customers notifying termination of license of the first Defendant Company
15. Ex.P15 22.03.2018 Email thread between the Plaintiff and one of its primary customers notifying them about the termination of the license of the first Defendant Company _____________ https://www.mhc.tn.gov.in/judis Page No.9 of 12 C.S. No.334 of 2018 Sl.N Exhibi Date Particulars of Documents o ts
16. Ex.P16 28.03.2010 Representation by the Plaintiff to the Government of India notifying the misconduct of non-remittance of service tax by the first Defendant.
17. Ex.P17 05.04.2018 Reply by the Government of India for the representation of the Plaintiff.
18. Ex.P18 07.05.2018 Cease and Desist notice issued by the Plaintiff to Defendants 1 to 3
19. Ex.P19 08.05.2018 Termination letter issued by the Plaintiff to the 2nd Defendant.
20. Ex.P20 08.05.2018 Termination letter issued by the Plaintiff to the third Defendant.
21. Ex.P21 April,2015 Invoices withheld by the Defendants 1 to 3.
-
Dec, 2017
22. Ex.P22 - Bank Statement provided by the Defendants 1 to 3.
23. Ex.P23 22.03.2018 Board Resolution of the Plaintiff
24. Ex.P24 31.12.2017 Invoice No.2111 raised by the Plaintiff on the first Defendant.
25. Ex.P25 31.03.2018 Invoice No.2121 raised by the Plaintiff in the first Defendant Company.
26. Ex.P26 31.12.2017 Email sent by the Plaintiff to the Defendants 1 to 3.
27. Ex.P27 10.05.2018 Counter foil provided by the banker of the first 08.06.2018 Defendant Company.
& 22.06.2018 _____________ https://www.mhc.tn.gov.in/judis Page No.10 of 12 C.S. No.334 of 2018 Sl.N Exhibi Date Particulars of Documents o ts
28. Ex.P28 - Certificate of Incorporation pursuant to change of name.
29. Ex.P29 16.08.2010 Bank Statement of the first Defendant to Company 22.07.2019 Defendants' documents : NIL SKRJ _____________ https://www.mhc.tn.gov.in/judis Page No.11 of 12 C.S. No.334 of 2018 SENTHILKUMAR RAMAMOORTHY, J rrg Pre-Delivery Judgment C.S.(Comm. Div)No.334 of 2018 08.06.2022 _____________ https://www.mhc.tn.gov.in/judis Page No.12 of 12