Delhi District Court
Additional District Judge12 ... vs M/S Gyancy Enterprises on 24 October, 2011
IN THE COURT OF SHRI MAN MOHAN SHARMA
ADDITIONAL DISTRICT JUDGE12 (CENTRAL)
TIS HAZARI COURTS, DELHI.
T. M. No. : 112/ 11
24.10.2011
M/S Frontier Biscuit Factory (P) Ltd.
C35/10, Lawrence Road Industrial Area,
Delhi110035
... Plaintiff
VERSUS
M/S Gyancy Enterprises
G3, 1333, Durga Chamber
D.B.Gupta Road, Karol Bagh
New Delhi110005
through proprietor/partner
.....Defendant
APPLICATION UNDER ORDER 39 RULE 1 & 2 CPC
ORDER:
1. This order is on an application of the plaintiff under Order 39 Rule 1 and 2 of the Code of Civil Procedure seeking restraint order against the defendant from the use of plaintiff's trade mark and copyright in the word 'FRONTIER' Plaintiff's Case
2. The case of the plaintiff is that it is a private limited company registered under the Companies Act, 1956. It is carrying on an TM No. 112/11 Page 1 of 39 established and reputed business of manufacturing and trading of biscuits, namkeens, cakes, and various other goods.
3. Plaintiff's predecessor coined, conceived and adopted the Trade Mark FRONTIER in 1921 at Hoti Mardan in West Pakistan (as a proprietorship concern of late Shri Mangal Sain Sethi F/o Shri Munshi Ram Sethi--the present Chairman & Managing Director of the plaintiff company). Sh. Munshi Ram Sethi continued his ancestral business under the Trade Mark FRONTIER in India after partition by setting up a production unit in Kasabpura, Sadar Bazar, Delhi, in the year 1947 as a proprietor. Thereafter he admitted his family members as partners in the aforesaid business and finally it became a Private Limited Company in the name and style of M/S. Frontier Biscuit Factory Private Limited in the year 1989. Throughout its various transition from proprietorship to constitution of the company, it maintained its Trade Mark of FRONTIER.
4. The plaintiff's trade mark FRONTIER word perse is registered under no. 1386729 dated 22.09.2005 before the Registrar of Trade Marks in respect of namkeens, biscuits, cakes and pastry included in class 30, The plaintiff's trade mark FRONTIER label mark is registered under no. 662072 dated 10.04.1995 before the Registrar of Trade Marks in respect of sweets, namkeens, biscuits, cakes, pastry included in class 30. Both registrations are valid, subsisting and in full force. TM No. 112/11 Page 2 of 39
5. Plaintiff's said trade mark FRONTIER is represented in unique get up, colour combination, font, design etc. and the same is original art work. The plaintiff is the true and lawful owner of said art work FRONTIER and as such copyright in said artistic label FRONTIER is exclusively vested in favour of the plaintiff. The plaintiff is the registered proprietor of the copyright in the said artistic label FRONTIER under no.A72560/2005. The registration of said label under the Copyright Act, 1957 is still valid, subsisting and in full force.
6. The plaintiff has its fullfledged Factories at : (i) Lawrence Road Industrial Area, Delhi established in 1970 71 (ii) Mundka Udyog Nagar, Delhi established in 1995 96; (iii) 58/3, M.I.E., Bahadurgarh, Haryana established in April 2002. The plaintiff company is engaged in the manufacturing and trading of 'Frontier Biscuits', 'Frontier Namkeens', 'Froniter Rusks' and 'Frontier Cakes' etc. Presently it has more than 35 varieties of handmade Biscuits, more than 10 varieties of Namkeens.
7. On account of excellent contributions in making quality, soft, crisps, hygienic and nutritious biscuits under the Trade Mark FRONTIER the plaintiff company has been honored with - (i) Quality Recognition Award, 1990; (ii) Bhartiya Udyog Ratan Award, 1996; (iii) Rashtriya Udyog Sammaan Puruskar, 1999; and (iv) Udyog Bhushan Award, 2001. The Plaintiff company is a life member of Laghu Udyog Bharti.
TM No. 112/11 Page 3 of 39
8. The plaintiff company is a well organized company having a network of 3 factories (employing more than 250 workforce), more than 27 showrooms scattered all over Delhi including 2 in Haryana; 2 Distribution Zones and 3 Production Franchisees. The company has an organized workforce under the fleet of Managers with designated departmental responsibilities.
9. The demand of the plaintiff's products under the Trade Mark FRONTIER has been growing day by day necessitating the expansion of its network of shopping zones and production units in and around Delhi. The Plaintiff has made extensive sale of its goods under the trade mark FRONTIER. As a result of extensive user in the past years coupled with publicity, the Trade Mark FRONTIER has acquired enviable reputation. The sales figures of the Plaintiff's products, packing expense and advertisement expenditures under the Trade Mark FRONTIER are as follows:
Year Sales Pkng. Exp. Advt. Exp.
197576 2,07, 009/ 165/
197677 3,65, 526/
197778 3,80, 024/ 277/
197879 4,00, 352/ 548/
197980 5,57, 968/ 3,477/
198081 8,62, 675/ 2,260/
198182 12,52, 881/ 4,868/
TM No. 112/11 Page 4 of 39
198283 12,13, 430/ 23/
198384 14,07, 981/ 6,800/
198485 17,76, 791/ 19,950/
198586 23,56, 945/ 55,548/
198687 27,96, 809/ 96,666/
198788 37,05, 747/ 86,952/
198889 50,54, 474/ 1,82,063/
198990 65,81, 622/ 3,45,077/ 2,13, 294/
199091 89,98, 497/ 6,00,378/ 2,39,572/
199192 1,31,66,268/ 7,98,321/ 3,30,071/
199293 1,64,48,560/ 9,80,828/ 4,25,127/
199394 1,86,68,720/ 10,27,961/ 7,22,361/
199495 2,30,84,113/ 14,27,219/ 7,82,157/
199596 2,94,22,999/ 20,57,129/ 8,89,359/
199697 4,50,80,778/ 28,61,184/ 14,61,080/
199798 5,32,29,202/ 31,67,914/ 15,54,830/
199899 5,98,78,828/ 38,24,338/ 11,22,148/
199900 6,84,56,080/ 39,43,694/ 20,08,833/
200001 7,18,25,936/ 51,78,771/ 25,07,884/
200102 6,90,26,099/ 55,27,762/ 18,32,574/
200203 7,84,08,865/ 65,46,379/ 30,14,209/
200304 9,93,03,715/ 96,73,887/ 29,13,879/
200405 11,43,43,103/ 1,17,76,370/ 13,00,445/
TM No. 112/11 Page 5 of 39
200506 12,06,15,562/ 1,25,07,037/ 17,35,168/
200607 13,57,32,280/ 1,39,59,103/ 23,18,877/
10. Due to the good quality of the goods under the Trade mark FRONTIER, the sales of the Plaintiff company has seen record increase in respect of which news items was published in various news papers.
11. The plaintiff is the bonafide adopter, owner and lawful proprietor of the trade mark FRONTIER as word perse as well as label mark in respect of the above goods. FRONTIER is the prominent part of the name of the plaintiff company and people & trader recognize the plaintiff company by this name and said trade/label. On account of the superior quality and high effectiveness of the said goods under the said trade mark FRONTIER for decades, the plaintiff's said trade mark/ label FRONTIER have acquired high degree of recognition, reputation and goodwill among the buying public in general and members of trade. In the course of business the said trade mark/label indicate the said goods as originating from the plaintiff and have become exclusively associated/ synonymous with the plaintiff. The plaintiff have given wide publicity to its trade mark through various media i.e. trade literature, pamphlets, publication of advertisement in newspapers etc for which the plaintiff has spent huge amount.
TM No. 112/11 Page 6 of 39
12. The defendant had entered in to dealership agreement dated 26.06.1997 with the plaintiff company for selling of the plaintiff's products under the said trade mark/label FRONTIER from its shop. The said dealership agreement terminated by the plaintiff w.e.f. 19.02.2001 vide termination letter dated 05.02.2001. After issuance of aforesaid termination letter, the plaintiff published advertisements in newspapers thereby informed the general public that the plaintiff company stopped supplying said goods under the trade mark FRONTIER to the defendant. The defendant sent legal notice dated 12.02.2001 to the plaintiff which was replied by the plaintiff through its Advocate. Thereafter the plaintiff sent legal notice dated 27.02.2001 to the defendant thereby interalia called upon to desist from misusing name of the plaintiff. On 09.03.2001 the plaintiff in newspapers 'Punjab Keshri' and 'Sandya Times' publicized notices that the dealership agreement between plaintiff and defendant stood terminated.
13. Despite all these the defendant continued to use the name/trade mark FRONTIER of the plaintiff company. Against said illegal action of the defendant, the plaintiff on legal advise of earlier counsel filed a suit bearing No.105/2001 in April 2001 before the Learned Senior Civil Judge thereby interalia seeking permanent injunction restraining the defendant from using/exhibiting name of plaintiff company at his shop. On 15.10.2001 the Court granted interim injunction against the defendant TM No. 112/11 Page 7 of 39 from using name/trade mark FRONTIER. Thereafter the defendant filed application Order 7 rule 10 for returning the plaint on the ground want of jurisdiction. Consequently on 07.11.2001 Ld. Civil Judge was pleased to stay operation of interim injunction order. Then on legal advise the plaintiff filed revision petition in Hon'ble High court, Delhi, the earlier counsel did not communicate fate of development in said revision and suit thereafter. On inquiries by the officials of the plaintiff company the earlier counsel always communicated that the proceedings were pending.
14. The plaintiff came across publication in Trade Mark Journal of the Defendant's application for registration of mark/label FRONTIER in the year 2007 and then filed notice of opposition dated 25.04.2007 against the Defendant's application for registration of impugned mark FRONTIER. The said opposition is pending. In the first week of November 2007 plaintiff instructed the counsel, who has filed opposition, to find out status in the above said suit. The said counsel on inspecting the case file pertaining to the said suit communicated to the plaintiff that the plaint in said suit has been returned to be presented before the competent court vide order dated 22.04.2002. On the legal advise of the said counsel, the present suit has been preferred as each and every violation/infringement of the plaintiff's said trade mark FRONTIER by the defendant on using identical/deceptively similar mark FRONTIER gives a separate cause of action.
TM No. 112/11 Page 8 of 39
15. The plaintiff managed to purchase the defendant's goods under identical/deceptively similar mark/label FRONTIER which manifest the defendant is indulge in infringing of the plaintiff's trade mark and copyright in said trade mark/label FRONTIER. The defendant has pirated and still pirating the said trade mark/label and trade name FRONTIER of the plaintiff with fraudulent and malafide intention to trade upon and to profit upon the goodwill and reputation of the plaintiff in the said trade mark/label. The defendant is guilty of infringement of trade mark and copyright and passing off its goods as that of the plaintiff in furtherance of its evil design and motives. That the impugned mark/label of the defendant is identical/deceptively similar to the plaintiff's said trade mark and the defendant is using the impugned mark in respect of identical/allied goods and as such common unwary buyers are bound to be waylaid in buying the defendant's goods under impression that they are buying the plaintiff's goods. Hence the defendant's goods are bound to be passed off as that of the plaintiff to the disadvantage of the plaintiff in terms of money, loss of goodwill and reputation. Every gain of defendant from the said business under the impugned mark/label FRONTIER is the loss occasioned by the plaintiff.
16. The defendant has no right or justification whatsoever for adoption and use of the impugned mark/label FRONTIER which is identical/deceptively similar to the plaintiff's trade mark/label TM No. 112/11 Page 9 of 39 FRONTIER. Adoption and user of the impugned mark/label by the defendant is malafide, unscrupulous and fraudulent and made with an evil intention and motive to pass off its inferior goods and business under the garb of the plaintiff's superior quality of plaintiff's goods and thus to occasion immense loss and injury to name, reputation, goodwill and business of the plaintiff. The defendant's illegal acts are causing confusion and deception among the unwary customers of average intelligence. The plaintiff is thus suffering loss not only in present but further loss and damage to trade and reputation of the plaintiff are inevitable unless the defendant be restrained permanently from using impugned trade mark/label FRONTIER. The pecuniary compensation will not affirm to the plaintiff adequate relief. The defendant's activities will lead to the dilution and eventual erosion of the goodwill and reputation linked to the plaintiff's said trade mark FRONTIER and also loss of distinctiveness, uniqueness and exclusively attached thereto.
Defendant's Case
17. The defendant challenged the suit of the plaintiff stating that the plaintiff has made false, frivolous, baseless and misleading statements in the plaint. The word FRONTIER is an ordinary dictionary word therefore it being coined and conceived by its predecessor i.e. a proprietorship concern of late Sh. Mangat Sain Sethi in the year 1921 does not arise as the word FRONTIER is in existence ages before the TM No. 112/11 Page 10 of 39 year 1921. The plaintiff has obtained the registration of the mark FRONTIER word perse under no. 1386729 and the mark FRONTIER label under no. 662072 both in class 30 by making false claims before the Registrar of Trade Marks and as such are liable to be rectified and removed from the register of the Registrar of Trade Marks.
18. The conduct of the plaintiff is fraudulent. For obtaining registration of the mark FRONTIER (label) under no. 662072 in class 30 before the Registrar of Trade Marks, the plaintiff claimed user thereof from 1st January, 1947; for obtaining Copyright registration under no. A 72560/2005 of the same vary label, the plaintiff claimed the first publication of the said label in the year 1980.
19. The plaintiff is not the proprietor of the mark FRONTIER as the plaintiff was incorporated on 6th January, 1989, as per its own version. The plaintiff's claim of proprietary right in the mark FRONTIER on the basis of adoption and use thereof since the year 1921 and/or 1947 is contrary to the provisions of the Trade Marks Act, 1999. In fact, the plaintiff itself is a guilty of piracy of the mark FRONTIER.
20. The plaintiff has obtained the registration of copyright under no. A73560/2005 by making false claims before the Registrar of Copyright. Before the Registrar of Copyright for obtaining the said registration, the plaintiff claimed that FRONTIER label was first published in the year 1980 and the same was created by Mr. Kamal Sahdeva of Navyug Paper TM No. 112/11 Page 11 of 39 Product, whereas before the Registrar of Trade Marks for obtaining trade mark registration of the same vary label under application no. 662072, the plaintiff claimed user thereof from 1st January, 1947.
21. The suit of the plaintiff is time barred and the same, as such, is liable to be dismissed. The present suit has been filed beyond the prescribed period of limitation under the provisions of the law. As per plaintiff's own claim, the defendant has been using the mark FRONTIER since much prior to April, 2001 when the plaintiff had earlier filed the suit bearing no. 105 of 2001 for permanent injunction restraining use of the said mark before the Ld. Senior Civil Judge, Delhi. The present suit has now been filed after a gap of more than six years of the order dated 2nd April, 2002 of the Ld. Civil Judge directing return of plaint for want of jurisdiction. Admittedly, the defendant has been using the trade mark in question through out this period. For all those years from 2nd April, 2002 till the filing of the present suit, the plaintiff did not take any action against the defendant to restrain him from using the mark in question.
22. The suit of the plaintiff is liable to be dismissed as the plaintiff has made false statements in the plaint. The plaintiff has admitted that the operation of order of injunction dated 15.10.2001 passed in the above mentioned Civil Suit No. 105 of 2001 was stayed by the same very Court on 07.11.2001. The plaintiff has made a false statement to the effect that till first week of November, 2007, the plaintiff was not aware about the TM No. 112/11 Page 12 of 39 order dated 22.04.2002 passed in the said suit whereby it was ordered that the plaint be returned to the plaintiff for presentation before the Court of competent jurisdiction. The plaintiff has admitted that the operation of the injunction order was stayed by the Hon'ble Court while dealing with the defendant's applications including the application for return of plaint. It is beyond the comprehension of mind of any reasonable person to believe the plaintiff's cooked up story to the effect that its earlier counsel always told that the alleged revision and suit proceedings are pending.
23. The defendant has been running his business and using the mark in question from his premises at G3, 1333, Durga Chamber, D.B. Gupta Road, New Delhi - 110005 and the plaintiff has been selling its products through a franchisee, who is running his business from the shop adjoining to the shop of the defendant bearing no. G4, 1333, Durga Chamber, D.B. Gupta Road, New Delhi-110 005 since the year 2001. The plaintiff has given an impression as if the plaintiff was not aware about the continuous, extensive and established use of the mark in question on the part of the defendant during all this period till the date of publication of the defendant's application for registration of the mark in question in the Trade Marks Journal. The plaintiff has not come before this Hon'ble Court with clean hands and as such is not entitled for any relief much less an equitable relief of injunction.
TM No. 112/11 Page 13 of 39
24. The plaintiff has made concealment of material facts from this Hon'ble Court. The plaintiff has deliberately concealed the fact that the plaintiff has been selling its goods from the adjoining shop of the defendant through its franchisee since the year 2001 after the disputes between the plaintiff and the defendant had arisen. The defendant is the proprietor of the mark in question GYANCY FRONTIER. The defendant has continuously and extensively been using his mark uninterruptedly to the knowledge of the plaintiff since the year 2001. The defendant is therefore entitled to use his mark under the provisions of Section 12 of the Trade Marks Act, 1999. The opposition filed by the plaintiff to the application for the registration of the mark in question of the defendant is liable to be dismissed in due course and the defendant is entitled to get the registration of his mark.
25. The defendant has established its trade. The sales of the defendant's goods bearing the mark in question is in no way affecting the alleged sales of the plaintiff and no damage of any sort has been caused to the plaintiff's alleged trade or its alleged reputation.
26. The word FRONTIER cannot become the property and / or monopoly of any trader being the common word used in relation to different merchandise goods and services by different persons. The suit as such is liable to be dismissed. The mark FRONTIER is being used by number of persons in respect of various merchandise and services. The TM No. 112/11 Page 14 of 39 mark FRONTIER is in fact commonly being used by large number of persons and is common to trade.
27. The competing marks are neither identical nor deceptively similar. There is no similarity of any nature whatsoever between the competing marks. The defendant has been using the prefix GYANCY with the word FRONTIER. The prefix GYANCY used by the defendant is sufficient to distinguish his goods from those of the plaintiff. The competing labels are also different. There is no likelihood of creation of any confusion and deception by use of the mark in question on the part of the defendant. Therefore, there is no question of any infringement and/or passing off. In addition, the name and address of the defendant appear on its packaging, which itself is sufficient to distinguish the goods of the defendant from that of the plaintiff. There is no likelihood of creation of any confusion and deception by use of the mark in question on the part of the defendant. Therefore, there is no question of any infringement and/or passing off. No instance of confusion and deception has been pleaded in the plaint.
28. The plaintiff has all along been aware about the use of the mark and packing material in question on the part of the defendant and the plaintiff having knowingly stood by it acquiesced to the use thereof on the part of the defendant. The plaintiff has throughout allowed the defendant to use the mark in question and grown in business under the said mark. The present suit has been filed only to crash the trade of the TM No. 112/11 Page 15 of 39 defendant when the same has been established and stand well built up. The suit is definitely barred by principles of acquiescence, latches, delay and estoppel.
29. The suit of the plaintiff is not maintainable under the provisions of Section 33 of the Trade Marks Act, 1999. Further as the plaintiff has failed to file Legal Proceeding Certificates, which are only admissible in evidence under Section 137 of the Trade Marks Act, 1999 the suit for infringement of trade mark is not maintainable.
30. The defendant admitted the execution of the agreement dated 26.06.1997 but submitted that the said agreement was not concerning any goods under the mark / label FRONTIER. It also admitted that the defendant issued a legal notice dated 12.02.2001 to the plaintiff. The suit of the plaintiff is barred by the principles of delay, latches and acquiescence. The defendant has been using the mark in question openly and concurrently much prior to April, 2001 within the knowledge and under the nose of the plaintiff.
31. Defendant denied that the competing marks / labels are identical or deceptively similar or that the unwary buyers are bound to be misled into buying the defendant's goods under the mark in question under the impression that they are buying the plaintiff's goods or that the defendant's goods are bound to be passed off as that of the plaintiff, as alleged or otherwise. It also denied that the use of the mark in question on TM No. 112/11 Page 16 of 39 the part of the defendant is illegal or unauthorized or that the plaintiff has suffered any loss or injury to its alleged goodwill or reputation or that the gains of the defendant by the use of the mark in question is loss occasioned by the plaintiff.
32. Arguments have been addressed by Shri A. K. Goyal, ld. counsel for the plaintiff and Shri Gurvinder Singh, ld. counsel for the defendant at length over a number of hearings. Ld. Counsel copiously read from the pleadings and documents and cited case law in support of their respective submissions.
33. I have considered the rival submissions in para wise heads as under: FRONTIERAn Ordinary Dictionary Word
34. The first and foremost objection of the defendant is that the word FRONTIER is an ordinary dictionary word and the question of its being coined by plaintiff's predecessor does not arise at all.
35. It has been argued by the Ld. Counsel for the defendant that the plaintiff has made claim of user of label FRONTIER of different date in registration proceeding under the Trade Marks Act and the Copyright Act.
36. Ld. Counsel for the plaintiff answered the objection by arguing that the plaintiff's label which is registered under number 662072 under the Trade Marks Act, 1999 and the plaintiff's label which is registered under TM No. 112/11 Page 17 of 39 number A73560/2005 under the Copyright Act, 1957 are different in color combination, font and since the label FRONTIER which is registered under No. 662072 under the Trade Marks Act, 1999 was firstly used in the year 1947 and as such claim of user since the year 1947 was truly mentioned at the time of filing of application for the registration thereof and also as the label FRONTIER registered under No. A 73560/2005 under the Copyright Act was firstly published by the plaintiff in year 1980 and as such claim of user thereof was rightly claimed at the time of filing of application for registration thereof under the Copyright Act. In any case plaintiff is the prior adopter/user visàvis the defendant.
37. Ld. Counsel for defendant has relied upon the case Rhizome Distilleries P. Ltd. vs. Pernod Richard S. A. France 2010 (42) PTC 806 (DEL.) (DB) wherein the Court has held IMPERIAL is a laudatory word implying grandeur or royalty; it is also a word of common parlance and therefore no exclusive or proprietary rights can be claimed by either of the parties. In that case interim injunction was refused on the ground of delay and acquiescence; plaintiff idly stood by and watched the defendant's sale grow manifold; both labels dissimilar and any likelihood of deception being ruled out, the injunction was refused.
38. No doubt the word 'FRONTIER' is a dictionary word having a meaning, thus being in public domain. If we look at the hierarchy of TM No. 112/11 Page 18 of 39 marks from weak to strong in the spectrum of distinctiveness the following lineage appears: GENERIC>DESCRIPTIVE> SURNAME>SUGGESTIVE> ARBITRARY>INVENTED
39. Arbitrary marks comprise those words, symbols or pictures etc. which are in common linguistic use but which, when used with the goods or service in issue, neither suggest nor describe any ingredients, quality or characteristic of those goods or services. Thus 'Apple' for computers; 'Arrow' for shirts; 'Teacher' for liquor are all arbitrary marks. These words of dictionary have no connection with the ingredients, quality or characteristic of those goods. Thus they have in the course of trade have become distinctive of the goods they represent from a particular proprietor or source. They have thus in the course of use have become source identifier.
40. On this yardstick, the word mark 'FRONTIER' being an arbitrary mark, and on account of its use has been a source identifier for the plaintiff's goods and its distinctiveness. The plaintiff is not only claiming registration but long user and considerable goodwill also.
41. The argument of the defendant regarding Frontier being a word of common parlance and thus being not capable to being a trade mark or TM No. 112/11 Page 19 of 39 registration as such cuts both ways. The defendant is also using the word Frontier, of course coupled with another word 'Gyancy'. It has also been using ® (word R in circle to indicate it being a registered trade mark), though it is not the case in reality as the defendant has shown no registration of the trade mark 'GYANCY FRONTIER' on record. The defendant has argued that it was only due to bonafide mistake that some cartons with such description and using ® were printed but not actually used. Be that as it may be.
42. The argument of the defendant that the plaintiff has obtained the registration of the mark FRONTIER word perse under no. 1386729 and the mark FRONTIER label under no. 662072 both in class 30 or copyright registration by making false claims before the Registrar of Trade Marks and as such are liable to be rectified and removed from the register of the Registrar of Trade Marks prima facie cuts no ice. Even otherwise, the cancellation/rectification is within the domain of the Registrar or IPAT/Board.
Estoppel against defendant being former dealer?
43. On this aspect Shri Goyal has argued that the plaintiff is the first who adopted and used the word FRONTIER long back as a trade mark which does not refer directly or indirectly any description or quality of the bakery goods and thus the trade mark FRONTIER adopted by the plaintiff in respect of Biscuits, Namkeens, Cakes etc. is a coined word in TM No. 112/11 Page 20 of 39 respect of the said goods. The defendant, who is none other than the erstwhile dealer/licensee of the plaintiff, and after termination of dealership/license agreement has continued to use the plaintiff's trade mark FRONTIER despite objections from the plaintiff, and the same in itself reflective of the dishonest user on the part of the defendant .It has no right to use the impugned mark FRONTIER OR GYANCY FRONTIER, which is nothing but dishonest. The following facts speak for itself:
(i). The Defendant has admitted (in reply to para no.18 of the plaint) the dealership agreement. Clause 2 and 6 of the same are relevant and self explanatory of the matter contained therein.
(ii). Termination of said agreement is also tacitly admitted.
(iii). Pursuant to the termination a citation was was published in the news paper under the head 'Public Notice' informing the public at large that the defendant ceased to be dealer of the plaintiff, which fact has not been disputed by defendant.
(iv). Despite termination of the said dealership agreement, the defendant did not stop selling the goods under the trade mark consisting of word FRONTIER, and the adoption and user of the impugned mark consisting of word FRONTIER by the defendant after termination of dealership agreement is TM No. 112/11 Page 21 of 39 dishonest and slavish imitation of the plaintiff's trade mark and as such it is liable to be restrained from using the impugned mark.
(v). Being the erstwhile dealer of the plaintiff, it does not lie in the mouth of the defendant to challenge challenge the proprietary rights of the plaintiff over the trade mark FRONTIER. The law on this aspect is well enunciated in the judgment titled Fedders North America Case reported as 2006 (32) PTC 573(DHC) and this judgment lays down the complete law on licence. It has been argued that reliance has been placed on American Home Products Corporation Vs. Mac Laboratories Pvt. Ltd. AIR 1986 SC 137 (1986 (6) PTC 71 (SC) wherein the Hon'ble Supreme Court observed that when a person gets his trademark registered, he acquires valuable rights by reason of such registration as this gives him the exclusive right to the use of that trademark in connection with goods in respect of which it is registered, and if there is any invasion of this right by any other person using the mark, which is the same or deceptively similar to his trademark, he can protect his trademark by an action for infringement in which he can obtain an injunction, damages TM No. 112/11 Page 22 of 39 or an account of profits made by the other person. In such an action, the registration of the trademark is prima facie evidence of its validity. A licencee cannot claim any right to use the trade mark after his licence cames to an end. It is the settled principle of law that there can be only one mark, one source and one proprietor. Plaintiff has relied upon a catena of case law on this aspect.
44. Shri Singh has argued that the defendant though admits the execution of the agreement dated 26.06.1997 but the said agreement is not concerning any goods under the mark / label FRONTIER. Ld. Counsel had read the agreement verbatim to emphasis there is not even mention of the word/label mark 'FRONTIER' in the same.
45. I have considered the rival submissions. The previous franchise is admitted. The same was for the sale of biscuits and allied products. The defendant's trade mark 'GYANCY FRONTIER' is also concerning the same/similar goods. The defendant has not offered any explanation as to why on earth it did not use any other word except 'Frontier' for the sale of its goods similar to that of the plaintiff. While the defendant was a franchisee of the plaintiff, it has at least the knowledge of the trade name of the plaintiff containing the word 'Frontier'. It cannot feign any ignorance of the same.
TM No. 112/11 Page 23 of 39
46. The defendant's plea that many other persons are using the word 'FRONTIER' in different versions to sell the goods similar/same as to that of the plaintiff. Be that as it may be. If so many people are violating the right of a person, it does not lie in the mouth of any of the violator to state that let others be caught first. One has to begin from somewhere. The defendant being the erstwhile franchisee of the plaintiff concern is bound to observe highest level of integrity visàvis the trade name/mark of the plaintiff.
Previous suit abandoned--Delay what effect?
47. The defendant has argued that the plaintiff abandoned the previous suit and the instant suit filed after about 6 years with lame plea about the previous suit has left the plaintiff with no cause of action and the suit is not only barred by limitation but on account of undue and unexplained delay. The suit of the plaintiff is barred by limitation as the plaint of plaintiff in earlier suit was returned vide order dated 22.04.2002 to file before the competent court but present suit filed on 26.11.2007 i.e. after more than 5 years from date of returning plaint.
48. Ld. Counsel for the plaintiff' argued that the plaint of the earlier suit returned with no date of presentation before competent court. There is bonafide explanation for nonrepresentation of the plaint. The plaintiff got information about order dated 22.04.02 of Ld. Civil Judge for returning of the plaint of earlier suit when the present counsel on their TM No. 112/11 Page 24 of 39 instruction inspected the case file of earlier suit after filing of Notice of Opposition. Moreover, the plaintiff has not filed the present suit on the basis of cause of action arose at the time of filing earlier suit (arisen on 23.01.2001 as defendant has not removed its board) but has filed the present suit on the basis of cause of action arose against the defendant when the plaintiff purchased the defendant's goods vide cash memo dated 31.10.2007 which bears the trade mark consisting of word 'FRONTIER' and as such the present suit is based on fresh cause of action than the earlier suit. It is also argued that prayers made in both the suits are different and not identical.
49. Plaintiff has argued that in the case of continuing wrong the return of the previous plaint and its non refiling fades into insignificance. As per Sec. 22 of the Limitation Act there is no limitation period prescribed for suing in respect of continuing breach of contract or continuing tort as each breach of contract or wrong gives separate cause of action to sue against such breach or wrong. Plaintiff's case covered under Sec. 22 of the Limitation Act as the plaintiff has filed the present suit against the defendant due to infringement of the plaintiff's said trade mark and copyright in label FRONTIER and passing off goods by the defendant as that of the plaintiff the time of filing of the present suit and said infringement and passing off have given independent and separate cause of action against the defendant and as such the present suit is not timed TM No. 112/11 Page 25 of 39 barred as alleged. It is well settled law that by limitation rights of a party does not lost but enforcement of that rights lost before the competent court if such party come before the court after limitation period prescribed for enforcement of that right. Every infringing act gives fresh cause of action.
50. Plaintiff placed reliance upon Bengal Waterproof Ltd. Vs Bombay Waterproof Manufacture Co.1997 PTC 17 (SC) wherein the first suit for infringement and passing off of the registered mark 'DUCK BACK' was dismissed. On subsequent point of time another suit was again filed praying same relief referring the recurring cause of action due to fresh sale of infringing mark. Defendant brought the defence of second suit. Setting aside the concurrent findings of the court below Supreme Court held that; "As an act of passing off is an act of deceit and tort every time when such tortuous act or deceit is committed by the defendant, the plaintiff gets a fresh cause of action to come to the Court by appropriate proceedings." Plaintiff quoted from the case that "Similarly whenever and wherever a person commits breach of a registered trademark of another he commits a recurring act of breach or infringement of such trademark giving a recurring and fresh cause of action on each time of such infringement to the party aggrieved. It is difficult to agree how in such as case when in historical past earlier suit was disposed of as technically not maintainable in absence of proper reliefs, for all times to TM No. 112/11 Page 26 of 39 come in future defendant of such a suit should be armed with a licence to go on committing fresh acts of infringement and passing off with impunity without being subject to any legal action against such future acts." It is also held that: "The infringement of the Plaintiff's trademark by Defendants gave it a continuing and recurring cause of action and merely because the Calcutta suit was dismissed in default and for non prosecution does not prevent the plaintiff from filing a suit in this court (Delhi) on the basis of subsequent infringements of its trademark."
51. Plaintiff has also relied upon Midas Hygine Industries (P) Ltd. & Anr. Vs. Sudhir Bhatia & Ors. (2004) 3 SCC 90 in which Hon'ble the Supreme Court held that in cases of infringement of a trademark or a copyright, it is well settled that normally an injunction must follow. It was observed that mere delay in bringing an action is not sufficient to defeat the grant of an injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the infringed trademark was dishonest.
52. Reliance by the plaintiff has also been placed upon Swaran Singh Trading as Appliances Emporium Vs M/s. Usha Industries 1986 (6) PTC 287 (Del.) (DB) wherein it has been held that, "The effect of a registered trademark is that even if there is some delay in enforcing the statutory right, the exclusive right of user cannot be lost. The principles TM No. 112/11 Page 27 of 39 governing other types of injunctions are not to be readily applied to the infringement of a trademark. While dealing with the use of the same trademark, it was held that in such a case the public is deceived into purchasing the defendant's goods on the belief that they are the plaintiff's goods and it is the duty of the court to protect a registered trade mark. An injunction cannot be refused even if there is some delay in such a case because that would tantamount to permitting a fraud being practiced on unwary customers."
53. The plaintiff has also relied upon M/s. Hindustan Pencils Pvt. Ltd. Vs M/s. India Stationery Products AIR 1990 Delhi 19 wherein it was held that the defence of laches or inordinate delay is a defence in equity. If there is honest concurrent user by the defendant, then inordinate delay and laches may defeat the claim of damages or rendition of account but the relief of injunction should not be refused. This is because the interest of the general public has to be kept in mind.
54. Shri Goyal further argued that mere failure to sue without some positive act of encouragement is not in general enough to give a defence and that if defendant acted fraudulently or with knowledge of plaintiff's rights then relief by injunction is accorded even though laches and acquiescence bar the recovery of damages or profits. The courts have been very reluctant to deny injunctive relief because of plaintiff's delay when it appears that defendant knowingly and deliberately adopted the TM No. 112/11 Page 28 of 39 mark which is an infringement. If the defendant acts fraudulently with the knowledge that he is violating the plaintiff's rights then in that case, even if there is an inordinate delay on the part of the plaintiff in taking action against the defendant, the relief of injunction is not denied. He referred to a plethora of case law on this aspect. He also argued that if the user in its inception was tainted it would be difficult in most cases to purify it subsequently. The defendant has used the impugned mark consisting of the word FRONTIER which is identical/deceptively similar to the plaintiff's registered trade mark "FRONTIER". Defendant's goods are biscuits, cakes etc. which are identical to the plaintiff's goods sweets, namkeens, biscuits, cakes, pastry included in class 30 for which the plaintiff's trade mark FRONTIER is registered: Amounting to infringement of the plaintiff's trade mark FRONTIER by the defendant. Under section 28 of the Trade Marks Act, 1999 the registration of a trade mark gives to the registered proprietor exclusive right to use of the trade mark in relation to the goods for which such trade mark is registered.
55. Shri Goyal also argued that it is settled law that the person who is user of a trade mark earlier in point of time is the owner of such trade mark. In passing off action only prior user of the trade mark is to established, subsequent user even if registered is restrained. If chances for success is 20% injunction should be granted since use may destroy the value of the mark.
TM No. 112/11 Page 29 of 39
Laches or Acquiescence
56. Ld. counsel for the defendant has argued that the defendant has been running his business and using the mark in question from his premises at G3, 1333, Durga Chamber, D.B. Gupta Road, New Delhi - 110005 and the plaintiff has been selling its products through a franchisee, who is running his business from the shop adjoining to the shop of the defendant bearing no. G4, 1333, Durga Chamber, D.B. Gupta Road, New Delhi-110 005 since the year 2001. The plaintiff has given an impression as if the plaintiff was not aware about the continuous, extensive and established use of the mark in question on the part of the defendant during all this period till the date of publication of the defendant's application for registration of the mark in question in the Trade Marks Journal. The plaintiff has infact acquiesced and is not entitled to injunction.
57. Ld. Counsel for the plaintiff argued that acquiescence pleaded by erstwhile licensee or dealer or employee has no right to such a plea. Reliance has been placed upon Fedders North American Vs. Show Line & Ors.2006 (32) PTC 573 (Del) wherein it has been held that the continued use of the trademark "Fedders" by Defendant No. 18 is a continuing wrong and therefore the dismissal of the Calcutta suit for non prosecution is of no consequence. Reliance has been placed on M/s. Bengal Waterproof Limited Vs M/s BombayWaterproof TM No. 112/11 Page 30 of 39 Manufacturing Company JT 1996 (10) SC 822 in the similar vein and also on M/S. Hindustan Pencils Pvt. Ltd..Vs. M/S. India Stationery Products 1989 (9) PTC 61 (Del).
58. Ld. Counsel for the plaintiff argued that in AnheuserBusch v. DuBo is Brewing Co., 175 F2d 370 the Court referred to the doctrine that a fraudulent infringer cannot expect tender mercy of a Court of equity so that mere delay by the injured party in bringing suit would not bar injunctive relief. Even though there may be some doubt as to whether latches or acquiescence can deny the relief of a permanent injunction, judicial opinion has been consistent in holding that if the defendant acts fraudulently with the knowledge that he is violating the plaintiff s rights then in that case, even if there is an inordinate delay on the part of the plaintiff in taking action against the defendant, the relief of injunction is not denied. The defense of latches or inordinate delay is a defense in equity. In equity both the parties' must come to the Court with clean hands. An equitable defense can be put up by a party who has acted fairly and honestly. A person who is guilty of violating the law or infringing or usurping somebody else's right cannot clarify the continued misuse of the usurped right. Before considering the defence of latches or acquiescence, an important factor which has to be seen is whether the user or adoption by the defendant was honest or fraudulent.
TM No. 112/11 Page 31 of 39
59. Ld. Counsel for the plaintiff further argued that as per the settle position of law acquiescence means something more than mere silence on the part of the plaintiffs. Acquiescence means encouragement on the part of the plaintiff to the defendant. Nonaction may disentitle the plaintiff for the award of damages or rendition of accounts, but such inaction does not show any consent or acquiescence on the part of the plaintiff to the defendant's using the said mark. No overt act has been done by the plaintiffs who could, in any manner, amount to encouraging the defendant to continue to use the infringing mark.
60. Ld. Counsel for plaintiff further argued that the plaintiff need not run after each and every violator. It is only when the violation is substantial that the person may take action. Hon'ble the Supreme Court in National Bell Vs. Metal Goods, AIR 1971 SC 898 has held that a proprietor of a trademark need not take action against infringement which do not cause prejudice to its distinctiveness. Similarly in Express Bottlers Services Pvt. Ltd. Vs. Pepsi Inc. & Ors.1989 (7) PTC 14 it has been held that "..if the proprietor of the mark is expected to pursue each and every insignificant infringer to save his mark, the business will come to a standstill...if a road side Dhaba puts up a board of "Taj Hotel" the owners of Taj Group are not expected to swing into action and raise objections forthwith. They can wait till the time the user of their name TM No. 112/11 Page 32 of 39 starts harming their business interest and starts misleading and confusing their customers."
61. Ld. Counsel for defendant has relied upon the case Rhizome Distilleries P. Ltd. vs. Pernod Richard S. A. France 2010 (42) PTC 806 (DEL.) (DB) wherein interim injunction was refused on the ground of delay and acquiescence as plaintiff idly stood by and watched the defendant's sale grow manifold.
62. Ld. Counsel for defendant has also relied upon Novartis AG vs. Wandbury Ltd 2005 (31) PTC 75 (DEL.) wherein it has been held that acquiescence is nothing but on facet of delay. If the plaintiff stands by knowingly and lets a defendant build up an important trade until it has become necessary to crush, the plaintiff would be stopped by acquiescence. It would be a fraudulent conduct to allow knowingly somebody to spend money to build a reputation and then try and crush it.
63. There is a fine diving line between acquiescence, latches or waiver. Acquiescence may be express or implied consent. In law, care must be taken to distinguish between mere knowledge of a situation and positive consent to it. For example, in the defence of volenti non fit injuria an injured party will not be regarded as having consented to a risk simply because he knew that the risk existed. Thus acquiescence is a positive act and must show consent. On the other hand laches is the neglect and TM No. 112/11 Page 33 of 39 unreasonable delay in enforcing an equitable right. If a claimant with full knowledge of the facts takes an unnecessarily long time to bring an action (e.g. to set aside a contract obtained by fraud) the court will not assist him; hence the maxim "the law will not help those who sleep on their rights" and "equity aids the vigilant". Waiver is an act of abandoning or refraining from asserting a legal right.
64. In the case of Rhizome Distilleries P. Ltd. vs. Pernod Richard S. A. France 2010 (42) PTC 806 (DEL.) (DB) relied upon by the defendant it has been held that mere delay in bringing action no ground for refusing injunction if adoption of trade mark by defendant primafacie dishonest.
65. Taking the case has a whole the plaintiff in order to succeed in an interim injunction must show a prima facie case; balance of convenience and apprehension of irreparable loss and injury.
66. In Ruston and Hornby Ltd. v. Zamindara Engineering Co. AIR 1970 SUPREME COURT 1649 it has been held: "In an action for infringement where the defendant's trade mark is identical with the plaintiff's mark, the Court will not enquire whether the infringement is such as is likely to deceive or cause confusion. But where the alleged infringement consists of using not the exact mark on the Register, but something similar to it, the test of infringement is the same as in an action for passing off. In other words, TM No. 112/11 Page 34 of 39 the test as to likelihood of confusion or deception arising from similarity of marks is the same both in infringement and passingoff actions."
67. While evaluating whether there is a possibility of deception the yardstick is based on the reality test--as a consumer in the market. If he is likely to be deceived or taken for a ride, then there is element of deception.
68. The Defendant has used the impugned mark consisting of the word FRONTIER on the packaging strikingly similar in colour combination, design, placement of words, lay out and pattern etc. to the plaintiff's packagings i.e. trade dress in order to mislead the ordinary, unwary customers of common prudence and thus the defendant has considerable potential to pass off its goods as that of the plaintiff. The defendant has used of the mark FRONTIER visible in large font and the packaging is similar to the plaintiff's packaging which by itself manifests that there is a clear and subtle attempt on the part of the defendant to impress upon the customers and members of trade that its mark is FRONTIER but not GYANCY FRONTIER. In defendants trade mark the word 'FROINTER' is quite prominent whereas the word 'GYANACY' is in small font and not prominently shown. The defendant's packaging and use of the mark FRONTIER prominently and the design, color combination etc. of the TM No. 112/11 Page 35 of 39 packaging is deceptively similar to the plaintiff's packaging. The trade dress as propounded by the defendant is quite similar to the plaintiff's trade dress and the deception and confusion to the consumer cannot be ruled out as the broad and prominent features are quite similar.
69. Even otherwise the trade mark 'GYANCY FRONTIER' is deceptively similar to the plaintiff's trade mark 'FRONTIER'. The defendant has no offered no explanation at all as to the use of trade mark 'GYANCY FRONTIER'.
70. The goods such as biscuits or namkeens and other similar, allied or cognate goods are purchased by the ordinary consumers such a housewives etc. Both the marks are not available to them side by side by comparison. Thus a consumer of ordinary prudence and imperfect recollection is likely to taken for a ride by believing that he is buying the goods of the plaintiff and not of defendant. The facts of the present case are in stark contrast to the facts of the case of Rhizome Distilleries P. Ltd. vs. Pernod Richard S. A. France 2010 (42) PTC 806 (DEL.) (DB) in which the goods viz. the premium whisky is purchased by a customer who stands on a different footing as to the level of knowledge, prudence etc. than the purchaser of goods like biscuits and namkeen etc.
71. Therefore, due to user of the impugned mark consisting of the word FRONTIER by the defendant in respect of the said goods will certainly cause confusion among the public who will purchase under TM No. 112/11 Page 36 of 39 impression that defendant's goods under the impugned mark consisting of word FRONTIER are the plaintiff's goods which are not so in reality and in such manner the public will be deceived and the defendant's goods will be further passed off as that of the plaintiff.
72. The above fact coupled with the fact that once upon a time the defendant was the franchisee of the plaintiff and sold its goods will compound the confusion, as the customers may still carry the impression of the association between the plaintiff and defendant. An unwary consumer is very much likely to believe that the goods are coming from the same source/manufacturer. Having so purchased the goods sold by the defendant, if the customer is not satisfied with the quality of the goods, then the casualty of the same would be the goodwill and reputation of the plaintiff.
73. Defense of delay, laches or acquiescence does not come to the aid to the defendant for the reasons that the delay has been prima facie reasonably explained and even otherwise the plaintiff banks upon continuing cause of action. No positive acts of acquiescence has also been established as the defendant has not stated as to what goodwill it has generated in its Trade Mark GYANCY FRONTIER due to the defendant keeping quite and watching its sale to grow etc.
74. It is the settled law that he who seeks equity must also do equity.
75. In the instant case defendant's adoption of trade mark TM No. 112/11 Page 37 of 39 'FRONTIER" as a part of its trade mark since inception is tainted and dishonest. The cartons of defendants are manifestly blatant copy of the plaintiff's cartons as demonstrated on record. The settled law is that statutory right can not be lost or defeated by delay. Delay may defeat rendition of account, damages, cost and not injunction.
76. It is the settled law that public interest must get precedence over the private interests. Why the law should permit a consumer to be taken for a ride? While considering an application for injunction it is not the actual deception but the likelihood of deception that is the sinequanon. In the present case, as the facts of the case suggest, there is every likelihood of the general and unwary public associating the goods of defendant with that of the plaintiff on account of the use of the same trade mark 'FRONTIER'. The public interest is paramount and cannot be permitted to whittled down or sidetracked.
77. There can be no absolute case. It is only on the plane of relativity that the rival cases of the parties have to be judged. The plaintiff has been able to show a primafacie case in its favour visavis the plaintiff and defendant the case of the plaintiff is at a higher pedestal. The plaintiff is not only the holder of registered trade mark, its mark is much more prior in use. The defendant is stopped from taking a stand to the contrary on account of itself being the franchisee of the plaintiff. The plea of delay, acquiescence and waiver carries no water at this stage as ostensibly there TM No. 112/11 Page 38 of 39 is a continuing and recurring cause of action as disclosed by the pleadings and material on record. The balance of convenience is also titled in favour of the plaintiff as it has made substantial investments in its trade mark and generated a considerable goodwill. The plaintiff is liable to suffer irreparable loss and injury if the injunction is not granted as the dilution of its goodwill which will have farreaching consequences, which cannot be compensated with any amount of money as the consequences will continue to haunt the plaintiff for unlimited time or perpetually.
78. In view of the above discussion, in my considered opinion the plaintiff has been able to make a good case for grant of adinterim injunction to restrain the defendant from using the trade mark 'FRONTIER' of plaintiff in respect of its goods in any way till the final disposal of the suit. It is ordered accordingly.
79. Nothing stated herein shall tantamount to an expression of opinion on the merits of the case.
80. Application of plaintiff under Order 39 Rule 1 and 2 of the Code of Civil Procedure stands disposed of in these terms.
Announced in the Open Court On this 24th day of October 2011 (MAN MOHAN SHARMA) ADJ (Central)12, Delhi TM No. 112/11 Page 39 of 39 TM No. 112/11 Page 40 of 39