Calcutta High Court (Appellete Side)
Kunj Roller Flour M Ills Pvt. Ltd. & Anr vs New Ristha Agro India Ltd on 19 July, 2024
Author: Harish Tandon
Bench: Harish Tandon
1
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
Present:
THE HON'BLE JUSTICE HARISH TANDON
&
THE HON'BLE JUSTICE M ADHURESH PRASAD
FMAT 403 of 2023
CAN 1 of 2023
CAN 2 of 2023
Kunj Roller Flour M ills Pvt. Ltd. & Anr.
Vs.
New Ristha Agro India Ltd.
W ith
COT 52 of 2024
New Ristha Agro India Ltd.
Vs.
Kunj Roller Flour M ills Pvt. Ltd. & Anr.
Appearance:
For the Appellants/Respondents : M r. Ranjan Bachawat, Adv.
(COT 52 of 2024) M r. Rudraman Bhattacharyya, Adv.
M r. Siddhartha Das, Adv.
M r. Akash M unshi, Adv.
M r. Souvik Kundu, Adv.
For the Respondent/ Cross Objector : M r. Shuvasish Sengupta, Adv.
(COT 52 of 2024) M r. Balarko Sen, Adv.
M r. Abhrajit Roy Chowdhury, Adv.
Judgment On : 19.07.2024
Harish Tandon, J.:
The plaintiff is the appellant in the instant case assailing the order no. 44 dated 05.08.23 passed by the learned Additional Session Judge, Barasat, 7th Court in Title Suit no. 3 of 2016 by which the order of temporary 2 injunction was restricted to the edible vegetable oil till the disposal of the suit. The appeal is taken out at the behest of the appellant on the score that the Court should not restrict the temporary injunction in respect of e dible vegetable oil only despite being the prior user of the trademark.
On the other hand, the defendant/respondent has filed the cross- objection assailing the order of the temporary injunction on the premise that even the order of temporary injunction restricted to edible vegetable oil could not be passed as the trademark "Rishta" is used by it since 1995. Both the appeals and the cross-objections are taken up together having aimed against the common order.
It is a specific case of the plaintiff/appellant that being a leading manufacturer of various kinds of food products like atta, maida, suji, besan, edible oils etc, such products were manufactured and sold throughout the country under the brand name "Rishta" which has acquired reputation and goodwill in the market being associated with the superior quality of products and thus became a distinctive mark in the market. The appellant claimed to have manufactured and adopted the said mark "Rishta" since 2000 and is using the said mark continuously, uninterruptedly and extensively and has become a well known product in such name in the household. It is a verred that upon acquiring the reputation, goodwill and distinctiveness in the said trade name or market expenditures were made for promoting the said product in the said mark which gives impetus in the sales which would be evident from the turnover during the relevant assessment years.
Subsequently, the application was made by the appellant for registration of the mark "Rishta" in Class 29 and 30 which was eventually granted. However, due to inadvertence and the negligence committed by the 3 trademark attorney, the period of the registration under Class 30 expired/lapsed and a fresh application for registration has been duly applied. However, it is further contended that despite the expiration or lapse of the registration period, the plaintiffs continued with the business activities of manufacturing and selling the edible oil and the other food items by exclusively using the word "Rishta" and also in conjunction with the said word upon adopting a unique packaging of the products. It is asserted that the volume of the turnover and the expenses incurred for promotion of the trademark "Rishta" acquired a distinctive brand name associated with the appellant. It is alleged in the plaint that in the month of May, June 2016, it was noticed by the appellant that sale in the North India decreased considerably and on an enquiry it was re vealed that the sale of the product with the trade name "Rishta" by the defendant/respondent was responsible therefor. It is further alleged that the respondent is selling the inferior quality products with the trademark "Rishta" with an object to deceive the public and the members of the trade with an intent to create a perception of nexus with the appellant.
On the conspectus of the aforesaid allegations, the appellant filed Title Suit no. 3 of 2016 before the District Judge, Barasat claiming a relief in the form of decree of permanent injunction against the respondents from infringing the registered trademark of the appellant by use of the mark "Rishta" or by use of any other marks identical or deceptively similar thereto and also from passing off or to pass off its product by using mark "Rishta" or any other mark deceptively similar thereto.
The respondent contested the said application for injunction after the service of notice and took a stand that it obtained the registration on 29th 4 March, 2001 of a mark "Rishta" for the goods under Class 30. It is a specific stand of the respondent that they are using such mark since 1995 through their predecessor-in-interest for sale of its rice product under the said trademark and, therefore, they are the prior user for the said trademark vis-a- vis the appellant. It is further alleged that on 19 th December, 2007 the predecessor-in-interest of the respondent registered the trademark "Rishta" in Class 30 and the certificate of registration was issued on 2nd July, 2012. The respondent acquired and became the owner of the said trademark after an assignment made by the predecessor-in-interest in the year 2013 and having stepped into its shoes it has every right to protect the interest and the ownership acquired on the said trademark as a prior user.
The Trial Court after extensively recording the respective stand of the parties and the arguments advanced in respect of their stands taken before it allowed the application for temporary injunction restraining the respondent from selling the products of edible vegetable oil by using trademark "Rishta" till the disposal of the said suit.
Mr. Bachawat the learned Senior Advocate appearing for the appellant submits that there is no clarity in the impugned order nor any finding is returned in precession as to why the temporary injunction should be restricted to the edible vegetable oil, more particularly, when the Trial Court found that the appellant is a prior user of the trademark "Rishta". It is further submitted that the Trial Court was under the misconception that the suit filed by the appellant is in relation to an infringement of a trademark and not on a passing off which is contrary to the pleadings made in the plaint as well as the injunction application. Mr. Bachawat would submit that not only a case of an infringement of a trademark but a case of passing off in respect of a 5 trademark "Rishta" is vividly and lucidly pleaded in the pleadings which appears to have been overlooked by the learned Judge in the Trial Court. Mr. Bachawat further submit that the documents disclosed before the Trial Court by the appellant clearly prove that the said trademark is used since 2000 and in absence of any corroborative document produced by the defendant/respondent in support of an alleged claim that the said trademark "Rishta" is used since 1995, the Trial Court ought to have passed orders in respect of the other products apart from the edible oil.
On the other hand, Mr. Shuvasish Sengupta, the learned Advocate appearing for the respondent who is also a cross-objector submits that the document produced before the Trial Court would sufficiently prove that the predecessor-in-interest of the respondent was using the said trademark "Rishta" since 1995 and being a prior user as well as the registered owner of the said trademark, no injunction can be passed even in relation to an edible vegetable oil. In respect of the aforesaid contention, Mr. Sengupta relies upon a certificate of registration of the prior date relatable to its predecessor-in- interest. Mr. Sengupta would further submit that respondent is also a holder of registered trademark "Rishta" and, therefore, there is no question of any infringement of a trademark. Mr. Sengupta further submits that the goods manufactured and sold in the market by the respondent have acquired good reputation and goodwill and being a prior user, an injunction cannot be passed by the Trial Court.
On the backdrop of the aforesaid facts and the submissions so advanced it is apparent from the materials placed on record that both the appellants and the respondents are the holder of the registered trademark "Rishta" but the question still begging an answer who is a prior user for the 6 purpose of passing off action. Before we proceed to decide the aforesaid issue, the object and purpose behind the incorporation of Sections 27, 28 and 29 of the Trade Marks Act, 1949 is required to be recapitulated. Section 27 (1) of the Act creates an absolute embargo against the prevention and/or recovery of damages on infringement of an unregistered trademark. However, Sub- Section (2) thereof saved the right of such unregistered trademark holder to bring an action against any person for passing off the goods or services as the goods of the another. It is thus apparent that the holder of an unregistered trade mark is not entitled to approach the Court on account of infringement thereof but by virtue of Sub-Section (2) the right of action for passing off remain unaffected. The corollary effect of the saving provisions contained under Section 27 (2) of the said Act leaves no ambiguity that in trade a person can use a mark associated to its goods despite not having registered the same before the competent authority as such right emanates from a common law and it stands independently in relation to a passing off action. The aforesaid impression made get further impetus from the use of the non-obstante clause in Sub-Section (2) of Section 27. However, by introduction of Section 28 in to the said Act which is again subject to the other provisions of the Act, the registration of the trademark recognises the exclusive right to use the said trademark in relation to the goods or the services for which it is registered and further conferred a right to obtain the relief in respect of an infringement of such trademark. It is thus manifest that the registration simply recognises the pre-existing right to use trademark in a common law and cannot be regarded as a conferment of the right for the first time. The common law right to use the trademark is based upon a prior use of the same continuously, uninterruptedly and distinctively as a mark associated with the user thereof 7 and upon introduction of Section 28 certain immunity and/or entitlement of a registered trademark is recognised.
The object and purpose of a prior user and the prevention and protection to the public confidence upon it, is based upon a notion that the one who has come first in the market has a superior right on the other who came later. Though the exclusivity or exclusive right is conferred on the registered trademark holder under Sub-Section (1) of Section 28 of the said Act but is circumscribed with the condition or limitation to which registration is subjected under Sub-Section (2) thereof. Sub-Section (3) of Section 28 of the Act further indicates that when two or more persons are the registered proprietors of the trademark, the right of exclusivity shall not be enforced against each other. The provisions contained under Section 28 of the Act does not in any manner impair the right of a registered proprietor of a trademark against other having a similar right in relation to a passing off action which remain unaffected.
The Apex Court in case of S. Syed. Mohideen vs. P. Sulochana Bai reported in (2016) 2 SCC 683 have succinctly jotted down the concept of passing off and the right of a person to protect its goodwill in the business acquired from his skill and labour and is essentially based upon an action in deceit under the law in the following:
"31.1. Traditionally, passing off in common law is considered to be a right for protection of goodwill in the business against misrepresentation caused in the course of trade and for prevention of resultant damage on account of the said misrepresentation. The three ingredients of passing off are goodwill, misrepresentation and damage. These ingredients are considered to be classical trinity under the law of passing off as p er the speech Lord Oliver laid down in Reckitt & Coleman Products Ltd. v. Borden Inc. Which is mor e 8 popularly known as "Jif Lemon" case wherein Lord Oliver reduced the five guidelines laid out by Lord Diplock in Erven Warnink Besloten Vennoootschap v. J. Townend & Sons (Hull) Ltd. ("the Advocaat case") to three elements : (1) goodwill owned by a trader, (2) misr epresentation, and (3) damage to goodwill. Thus, the passing off action is essentially an action in deceit where the common law rule is that no person is entitled to carry on his or her business on pretext that the said business is of that of another. This Court has given its imprimatur to the above principle in Laxmikant V. Patel v. Chentanbhai Shah. 31.2. The applicability of the said principle can be seen as to which proprietor has generated the goodwill by way of use of the mark/ name in the business. The use of the mark/carrying on business under the name confers the rights in favour of the person and generates goodwill in the market. Accordingly, the latter user of the mark/name or in the business cannot misrepresent his business as that of business of the prior right holder. That is the reason why essentially the prior user is considered to be superior than that of any other rights. Consequently, the examination of rights in common law which are based on goodwill, misrepresentation and damage are independent to that of registered rights. The mere fact that both prior user and subsequent user are registered proprietors are irrelevant for the purposes of examining who generated the goodwill first in the market and whether the latter user is causing misrepresentation in the course of trade and damaging the goodwill and reputation of the prior right holder/former user. That is the additional reasoning that the statutory rights must pave the way for common law rights of passing off."
It has been further held that the right of passing off emanating under the common law is a broader remedy than that of the infringement on a basic notion that one cannot represent or pass on his goods which resembles or nearly resembles the goods of the other inculcating a sense in a common man 9 of imperfect recollection that it is a goods of the another man and for such reason it is called an action in deceit.
In Amravati Enterprises vs. Karaikudi Chettinadu, reported in (2007) SCC Online Madras 1650, the Division Bench held that the registration of a trademark mere recognises the use of such trademark and by virtue of an introduction of Section 34 in the said Act an exception is created in relation to a prior use of the said trademark. It has further been highlighted that the moment the defence of a prior user is taken, the onus lies on such person to produce an evidence in relation to prior and continuous uses of the said trademark which would further be evident from the volume of the sales in the following:
"18. When a party is using prior user a shield in an action for infringement, it is necessary to prove that they have been continuously using the trade mark in respect of goods manufactured or marketed by them.
19. In the present cas e, the respondent relies on an unregistered partnership deed dated 15.9.2000, Nil IT returns for the year 2000-2001 and the licence fee receipt issued by Ambattur Municipality in support of their contention that they are the prior user of the name "KAR AIKUDI CHETTIN ADU R ESTAURANT".
20. When a defence of prior user is taken, burden lies on such trader/manufacturer to prove the continuous usage of the said trade name. Here the volume of sales also assumes significance. Similarly advertisement and other modes adopted for promotional sales also assumes significance. The reason being that the statutory presumption under Section 28 of the Trade Marks Act, 1999 loses its significance once prior user as provided under Section 34 of the Act is established."
What makes a person, a prior user of the trademark has been succinctly elucidated in the judgment of the Apex Court in case of Uniply 10 Industries Ltd. vs. Unicorn Plywood Pvt. Ltd. & Ors., reported in (2001) 5 SCC 95 in the following:
"8. Some courts indicate that even prior small sales of goods with the mark are sufficient to establish priority, the test being to determine continuous prior user and the volume of sale or the degree of familiarity of the public with the mark. Bona fide test of marketing, promotional gifts and exp erimental sales in small volume may be sufficient to establish a continuous prior use of the mark. But on some other occasions courts have classified small sales volume as so small and inconsequential for priority purposes. Therefore, these facts will have to be thrashed out at the trial and at the stage of grant of temporary injunction a strong prima facie case will have to be established. It has also to be borne in mind whether the appellant had also honestly and concurrently used the trade marks of there are other special circumstances arising in the matter. The courts below have merely looked at what the prima facie case is and tried to decide the matter without considering the various other aspects arising in the matter. Therefore, we think, the appropriate order to be made is that injunction either in the favour of the appellant or against them or vice versa is not appropriate and the proceedings in the suit shall be conducted as expeditiously as possible or the Registrar under the Trade a nd Merchandise Marks Act, 1958 may decide the matter which may govern the rights of the parties."
The right of the prior user against the registered proprietor of the trademarks is saved by virtue of a provision of Section 34 of the said Act and the Court must bear in mind while considering the case where protection and/or preservation is sought on the basis of a prior user as held by the Division Bench of this Court in B.S. Progressive Pvt. Ltd. Vs. M/s. S. G. Sales Corporation & Other reported in (2014) SCC Online Cal 2578 in the following:
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"The parties are in different classes in the matter of registration. The present lis is a passing off action where the prior user would have its say. From the facts so far revealed, it would be too early to conclude finally who is in the business of plywood earlier than the other, let it be decided at the proper time. The plaintiff should be given full opportunity to prove his case as to the prior use. The defendant would also be entitled to defend. We would expedite t he hearing of the suit. The defendants ar e representative through advocate except the defendant Nos. 5 and 6. The plaintiff must expedite the process of service of the writ of summons upon them. Service upon rest of the defendants is dispensed with."
Another Division Bench in case of Orient Papers Industries Ltd. vs. Jayanta Lamp Industries Pvt. Ltd. reported in (2011) 3 CHN 444 succinctly laid down the proposition underlying the granting of temporary injunction in a passing off action in the following:
"After hearing the learned counsel for the parties and after going through the materials on record, we find that the law relating to the grant of injunction alleging passing of is now well settled. In proceedings alleging passing off, the Court is required to answer the question whether there is such similitude between the two names as that one is in the ordinary course of human affairs likely to be confused with the other. It is, however, not necessary for the plaintiff to prove that the defendant in assuming the name complained of by it had any fraudulent intention. It is enough if the plaintiff proves that the act of the defendant in taking the name objected to by it is an injury to its right. The principle upon which the cases of this na ture proceed is not that there is property in the word, but that it is a fraud on a person who has established a trade and carries it on under a given name by some other who assumes the same name with a slight alteration in such a way as to induce the people to deal with him in the belief that they are dealing with the person who has given reputation to the name."12
In a recent judgment of the Division Bench in Vasundhra Jewellers Pvt. Ltd. vs. Kirat Vinodbhai Jadvani & Anr., reported in (2022) SCC Online Delhi 3370, it is held that the composite trademark or the label should not be dissected to determine the deceptive similarity with each other. The Court should look at the composite mark claimed by the prior user with the competing marks strictly for the purpose of ascertaining whether the same is deceptively similar and segregating of the mark should be avoided in the following:
"32. It is well settled that a composite trademark or label trademark is not required to be dissected to determine whether ther e is any deceptive similarity with another trademark. The question whether there is any deceptive similarity between two trademarks has to be ascertained by examining the marks in question as a whole. In South India Beverages India Private Limited v. General Mills Marketing Inc, 2014 SCC OnLine Del 1953, the Division Bench of this Court had explained the „anti-dissection rule‟ in some detail. The Court reiterated that "conflicting composite marks ar e to be compared by looking at them as a whole, rather th an breaking the marks up into their components parts for comparison". However , the Court had also observed that "while a mark is to be consider ed in entirety, yet it is imper missible to accord more or less importance or „dominance‟ to a particular portion or element of a mark in cases of composite marks."
On the conspectus of the law let us examine whether the order of temporary injunction granted by the Trial Court warrants interference. As indicated hereinabove the learned Judge in the Trial Court proce eded that the case is founded upon an infringement of a trademark yet it proceeded to limit the temporary injunction to the edible vegetable oil despite the claim of the appellant as prior user. The plaint as well as the application for temporary injunction is founded upon both claim i.e., the infringement of trademark as 13 well as passing off. In the event the Court found that both the parties have a registered trademark in relation to a goods or services, the case has to be decided on the parameter of the passing off action as the right of a prior user is protected under the said Act.
The documents produced by the appellant in support of his contention that the said trademark "Rishta" is used since 2000 has not been taken into consideration in the impugned order. Those documents form part of the record indicating the volume of the sales during the relevant period 2000-01 onwards. The invoices in relation to a sale pertaining to the aforesaid year is also annexed in support of the contention that the sale was affected Pan India and the Trademark "Rishta" has acquired a distinctive mark in the trade field. Though the respondent claimed the user of the trademark "Rishta" from 1995 by his predecessor-in-interest, there does not appear to be any document produced in this regard except the certificate of registration of firm. Even the application for registration of the trademark would indicate that the use of the said trademark is after 2000. The certificate relating to registration of a firm cannot be a reliable piece of evidence for the purpose of using the trademark "Rishta" since 1995. In S. Syed. Mohideen (supra), the Apex Court has put an emphasis on the goodwill by way of use of mark or name in the business and conferment of the right to protect the same against a misrepresentation causing damage of the reputation in the market. The goodwill and reputation in the market in relation to a mark associated with the goods or services is the primary concern in a passing off action which can be deciphered from the volume of the sales and the expenditures in preservation of the same. It appears that apart from the edible vegetable oil other food items are traded with the trademark "Rishta" which acquired a distinctive mark associated 14 with the appellant and even if the respondents have subsequently registered the said mark cannot get away from the clutches of the passing off action. It is evidently clear from the documents relied upon by both the parties in the said proceeding that the appellant is a prior user and, therefore, there is no justification in restricting the order of temporary injunction to the edible vegetable oil only.
The order of injunction is modified to the extent that the respondent shall be restrained from passing off its product by the use of the mark "Rishta" by selling, stocking the food items and edible oils till the disposal of the suit.
The appeal is, thus allowed to the extent as above.
The cross-objection filed by the respondent is hereby dismissed. No order as to costs.
Urgent Photostat certified copies of this judgment, if applied for, be made available to the parties subject to compliance with the requisites formalities.
(Harish Tandon, J.) I agree.
(M adhuresh Prasad, J.)