Delhi High Court
Pioneer Nuts And Bolts Pvt. Ltd. vs Goodwill Enterprises on 25 April, 2008
Author: S. Ravindra Bhat
Bench: S. Ravindra Bhat
JUDGMENT S. Ravindra Bhat, J.
1. The plaintiff applicant sues the defendant for permanent injunctive relief and delivery up in respect of its trademark, claiming infringement and seeks an ad-interim temporary injunction under Order 39, Rules 1 and 2. This Court had granted ex-parte injunction; that order stood vacated due to non- compliance with provisions of Order 39, Rule 3, Civil Procedure Code. The counsel for parties were heard on the question of grant of ad interim injunction. This order disposes off that application.
2. According to averments in the suit, the trademarks TUFF AND TUFF LABEL (hereafter collectively called "the subject marks") were adopted by the Plaintiff, in 1996 in relation nuts, bolts and screws; they were advertised for registration in Class 6 in the Trade Mark Journal on 30-3-2005. It is averred that the registrations were granted. In relation to the trademark TUFF, the registration is deemed to subsist since 11-2-1998, in Class 6 in India, and for export; in relation to the trademark TUFF LABEL, the registration is deemed to subsist since 15-1-2002, in Class 6 in India. The plaintiff has produced the registration certificates in that regard. It also claims be owner and proprietor in the artistic features in the subject trademarks.
3. The plaintiff avers that it has been honestly, bona fide and in the course of trade, using the subject marks as the proprietor, continuously since their adoption; it claims to maintain the highest degree of quality control and manufactures excellent quality of products. It has also been accredited with ISO 9001: 2000 certification for the said goods by TUV South Asia Pacific Ltd. It also claims to be a leader among manufacturers and suppliers of such goods of different descriptions and precision. It has been registered with sales tax and income tax authorities, and has also been supplying its products to public sector and governmental organizations.
4. It is averred that the plaintiff has acquired and built up a tremendous reputation and goodwill in relation to its product, for which the marks are used. It advertises its products through an exclusive website, i.e www.tuffbolt.com and has its e-mail identity, [email protected] and [email protected]. The plaintiff has spent considerable amounts of money for advertisement and publicity. It is also claimed that the words "TUFF" used for its products, and labels have acquired a secondary meaning connoting a distinctive indicium for its products and goods. Indeed, the plaintiff's reputation and goodwill is dependent on the use of the mark. The plaintiff claims that the subject marks have become distinct marks under Section 2(1)(zg) and Section 11 of the Trade and Merchandise Marks Act, 1999 (hereafter called "the Act"). Since the plaintiff is the owner of and proprietor in respect of the said marks in relation to the goods and cognate goods and services, its use by anyone else would amount to infringement and invite appropriate civil action.
5. It is alleged that the defendant has adopted identical and deceptively similar marks as that of the plaintiff, i.e, TUFF LABEL and TUFF, in relation to screws (self tapping). Copies of such labels and the marks used by the defendant have been produced; the plaintiff has also sought to compare them with its marks. The defendant, not being the proprietor of the trademarks, cannot use them without the plaintiff's leave; it does not possess any rights concerning the marks. The plaintiff avers about becoming aware of the defendant's intention in using the marks, when it came across the advertisement of its application for registration of the mark TUFF LABEL in respect of goods falling in class 12, in 2005. It was also claimed by the defendant that the mark was proposed to be used. The plaintiff immediately lodged a notice of opposition.
6. Mr. Valmiki Mehta, learned senior counsel, relied upon the averments in the suit and also submitted that the defendant is indulging in unfair use of a mark, which it is not entitled to. This amounts to "squatting" with a view to misuse and misappropriate the goodwill and reputation of the plaintiff, built meticulously over the years.
7. Learned Counsel contended that the defendant has sought to raise a completely unfounded plea of prior use, since 1993. In support, the defendant has merely relied on some newspaper advertisements. However, those alone are insufficient for making out a case of honest prior user. The plaintiff, being the registered owner of the subject marks, is justified in complaining of infringement by the defendant.
8. Learned Counsel relied upon the documents, including the registration certificates in relation to the subject mark, copy of the application for registration, which stated that the subject marks had been adopted by the plaintiff on 1-6-1996. He also relied upon a certificate issued and placed on the record, disclosing the sales figure, year wise, to contend that the sales figures were Rs. 456,580/- in 1996-97 and had steadily increased manifold, till it stood at Rs. 3,26,67,643/- in 2005-06.
9. Mr. Mehta relied upon the decision reported as Veerumal Praveen Kumar v. Needle Industries (India) Ltd. and Anr. (2001) DLT 600 (DB), and Ruston and Hornsby Ltd. v. The Zamindara Engineering Co. , to point out the distinction between an infringement action and a passing off action. In the latter judgment , the distinction was articulated in the form of questions to be asked by the court in the two kinds of cases. Apart from the question as to the nature of trademark the issue in an infringement action was held to be different from the issue in a passing off action. In a passing off action the issue is whether the defendant is selling goods so marked as to be designed or calculated to lead purchasers to believe that they are the plaintiff's goods, whereas in an infringement action the issue is if the defendant using a mark which is the same as or which is a colourable imitation of the plaintiff's registered trademark.
10. The court had also held that though the defendant may not use the trademark of the plaintiff, the get up of the defendant's goods may be so much like the plaintiff's that a clear case of passing off could be proved. It is on the contrary, conceivable that, although the defendant may be using the plaintiff's mark the get up of the defendant's goods may be so different from the get up of the plaintiff's goods and the prices also may by so different that there would be no probability of deception of the public. Yet, in an infringement action, injunction would issue as soon as it is proved that the defendant is improperly using the plaintiff's mark. Counsel contended that the defendant has not presented worthwhile material or pleadings to show that it was in fact using the subject trade marks; in the absence of which proof, the plaintiff had prima facie established infringement of its marks. Counsel further relied on the judgment reported as Milmet of tho Industries and Ors. v. Allergan Inc. to say that even where the products of the plaintiff are not used in India, but have acquired distinctiveness on account of its reputation, goodwill and good quality, the court would not deny it injunction, especially in the case of an infringement of its mark.
11. The Defendant avers being engaged in the business of marketing self taping screws for a long time. It is contended that its partners were also partners in M/s Goodwill Partners having offices at Mohali. This firm was formed in the year 1991 and dealt in self taping screws. The firm, it is averred, had adopted the trademark TUFF for self tapping screws in 1991. It is also stated that the said firm advertised the trademark in The HINDU on 26.12.1993 and in GUJARAT SAMACHAR on 26.12.1993.
12. It is also averred, and submitted on behalf of the defendant, by its counsel, Mr. Shailen Bhatia, that the firm also obtained telegraphic address- Grams "TUFF" in August 1994. The firm however was closed down in March 1996. In 1994, another firm, M/s Goodwill Industries was started by one of the partners of the Defendant, which too used the trademark TUFF concurrently. In 2002 the latter firm was closed down and the present Defendant formed, which started using the said trademark since 2003. It is therefore submitted that the family to which the partners belong has been using the said trademark since 1991 in relation to one partnership firm or the other.
13. It is also submitted that the various advertisements issued by these entities, the price lists, letters from dealers, trade enquiries and the renewal of the telegraphic address by subsequent firms only evidence the continuity of the usage of the said trademark. In support of the contention, reliance is placed on partnerships deeds dated 20-12-1991; 30-4-1994; 25-11-2002 and 28-4- 2004 Reliance was also placed on three newspaper advertisements dated 26-12- 1993; and 21-8-1999 (Rajasthan Patrika) and related trade enquiries dated 27/28- 12-1993; 8-10-1994; 12-12-1994; 20-2-1995; 3-1-1995; 11-3-1995, etc; originals of those trade enquiries and letters placing orders on the defendants" products have also been filed.
14. It is submitted that the balance of convenience is in favor of the Defendant because it has demonstrated that it is the first and prior adopter of the said trademark. It is submitted that Plaintiff was unable to show that it had used the marks prior to the defendant; consequently, the former is not entitled to injunction, despite its having obtained registration. Counsel contended that merely if a party secures registration, but chooses not to use it, the defense of honest prior user cannot be brushed aside.
15. Learned Counsel relied upon Section 34 of the Act and submitted that the defendant was entitled to contend that it was the first user of the mark TUFF, thus disentitling the plaintiff to interim injunction. Learned Counsel relied on the judgment reported as J.C. Penny Co. Inc. v. Penneys Ltd and Ors. 1975 FSR 367 and submitted that the court should consider the rights of the parties as on the date of the action or the suit, since the defendant has sufficient materials on the record to show that it was using the mark before the plaintiff. Learned Counsel also relied on the decision reported as Wander Ltd. v. Antox India P. Ltd. (1990) Suppl. SCC 727 N.R. Dongre and Ors. v. Whirlpool Corporation and Anr. and Swaran Singh Trading v. Usha Industries .
16. It was further submitted that the Defendant had addressed two letters dated 7th and 9th December 2006 asking the plaintiff to give details of the registration certificate, which was not replied to. The Defendant submits that the Plaintiff never asked it to cease using the said trademark. It is also submitted that on the 10th and 16th of August 2004, one of the partners of the Defendant had filed two applications in relation to the subject trademark in class 12 and 6 respectively. While in the former the user was stated as 1991 in the latter, it is averred, it was wrongly stated as proposed to be used. This error was brought to the notice of the Registrar and the application and additional documents mention the user as 1991. Therefore, it is submitted that mere wrong advertisement cannot change the factual situation.
17. It is further urged that the plaint is based on false and forged documents and that no sales figures have been furnished by the Plaintiff, contrary to its claim to have been using the mark for a long time; its documents are mostly of the year 2005.
18. During the course of hearing, learned Counsel for plaintiff, in addition to the documents filed along with the plaint, also sought to place reliance on additional documents, sought to be placed on record with an application, in the form of sales tax registration certificates, of 1996 and sales and income tax returns from 1996; and excise registration of 199; copies of returns, from 1996 onwards.
19. For the purposes of deciding the present application, it would be necessary to extract Section 12, 28, 29 and 34 of the Trademarks Act. They are as follows:
12. Registration in the case of honest concurrent use, etc.-- In the case of honest concurrent use or of other special circumstances which in the opinion of the Registrar, make it proper so to do, he may permit the registration by more than one proprietor of the trade marks which are identical or similar (whether any such trade mark is already registered or not) in respect of the same or similar goods or services, subject to such conditions and limitations, if any, as the Registrar may think fit to impose.
28. Rights conferred by registered. -- (1) Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act.
(2) The exclusive right to the use of a trade mark given under Sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.
(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.
29. Infringement of registered trade marks (1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as trade mark.
(2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade,a mark which because of-
(a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or
(b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark; or (c) its identity with the registered trade mark and the identity of the goods orservices covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark.
(3) In any case falling under Clause (c) of Sub-section (2), the court shallpresume that it is likely to cause confusion on the part of the public.
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34. Saving for vested rights.-- Nothing in this Act shall entitle the proprietor or a registered user of registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods or services in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior--
(a) to the use of the first-mentioned trade mark in relation to those goods or services be the proprietor or a predecessor in title of his; or
(b) to the date of registration of the first-mentioned trade mark in respect of those goods or services in the name of the proprietor of a predecessor in title of his; whichever is the earlier, and the Registrar shall not refuse (on such use being proved), to register the second mentioned trade mark by reason only of the registration of the first mentioned trade mark.
20. In the light of principles established and applied by the Supreme Court, in Ruston and Hornsby Ltd's case, as well as this Court and subsequent judgments, in the case of trademark infringement, if the plaintiff is able to prima facie establish that the elements of deception, spelt out in Section 29 exist, the Court must proceed to evaluate the necessity for grant of relief on the basis that such infringement exists, and ordinarily should grant ad-interim injunction, without considering the issue of delay and laches. This rule is, however, subject to two important exceptions. One is prescribed in Section 28, which that if both the plaintiff and the defendant are owners of registered trademarks, an action of infringement will not follow but their rights inter se for passing off action can be maintained. The other exception is enacted in Section 34 which mandates that the proprietor or a registered user of registered trademark cannot interfere or restrain the use of an identical trademark by any person with or resembling it in relation to goods for which that person or predecessor in title has continuously used the trademark from a date prior to the use of the first mentioned trademark in relation to those goods by the proprietor or a predecessor in title.
21. In the present case, the plaintiff has pleaded user of the subject marks since 1996. The two word marks are identical; the plaintiff uses it for nuts, bolts and screws, whereas the defendant uses it for one kind of screw. The pictoral representation of the mark is closely identical in both cases. In the absence of anything else, there would have been no question of infringement. The question however, is whether the defendant has made out a case of prior user.
22. The Registration of the trademark, took place in 2005 w.e.f. 1998 and 2002. Likewise, copyright registration was obtained in 2005. The earliest use, though disputed of the mark, is of the year 1996; the bulk of the invoices and bills produced to evidence of the transaction are of the years 2004 onwards. Also, the plaintiff initially relied on sales figures, typed out in a sheet of paper, on its letterhead. Later, it sought leave to file copies of its sales tax and excise registration, sales tax assessments as well as VAT assessments; all these are from 1996 onwards. These later documents only mention about the plaintiff's income and sales, but do not describe their products. On the other hand, the defendant has been able to show three advertisements, two of 26-12- 1993 and one of the year 1999. The receipts for publication of those advertisements have also been produced. Trade enquiries of 1993, 1994 and 1995 and other invoices etc have been filed; they pertain to different cities, including Calcutta and Madras.
23. The plaintiff's case about the defendant's user of the mark is two fold; one, that the latter was a "squatter" merely advertising the mark, but never using it; and that its product had acquired such distinctiveness so as to connote a secondary meaning to the mark and the word "TUFF". In this context, a Division Bench of this Court had held that advertisement is a mode of dissemination of information to the public, about a product, in Revlon Inc. v. Sarita Manufacturing Co. , in the following terms:
Dissemination of knowledge of a trade mark in respect of a product through advertisement in media amounts to use of the trade mark whether or not the advertisement is coupled with the actual existence of the product in the market....
The argument of the plaintiff about the advertisements produced by the defendant amounting to no credible evidence of user, therefore has to be negatived; it is a relevant and material piece of evidence requiring evaluation.
24. Next, the argument about the plaintiff's mark having acquired such distinctiveness and reputation that in the case of infringement the defendant's intention to misuse it alone should be relevant, so as to entitle the plaintiff to injunction on establishing a prima facie case, in an action of infringement. No doubt, the plaintiff is registered owner of the mark. Yet, the defendant has pleaded prior user of the same word mark, but in relation to one product. It has also produced three advertisements of different years as well as copies of trade enquiries for periods, prior to the plaintiff's claimed use. In addition, the defendant has been able to produce copies of partnership deeds where Shri Harpreet Singh has been shown to be a partner of firms right from 1991, in relation to the business and the product. In such cases, the plaintiff would have to necessarily show that it was using the mark concurrently, if not prior to the defendant, to obtain an injunction.
25. In Swaran Singh v. Usha Industries (India) , a Division Bench of this Court dealt with the case of a prior user in where infringement was alleged, and held as follows:
The order under appeal has the effect of permitting the defendants to use the impugned mark during the pendency of the suit. In the case of a registered trade mark, this creates a very difficult situation. The effect of registration is to give an exclusive right of user to the proprietor of the registered trade mark. This is provided in Section 28 of the Trade and Merchandise Marks Act, 1958. The only persons who can defeat this exclusive user are persons covered by Section 33 of the Act, which provides as follows:
33. Saving for vested rights: Nothing in this Act shall entitle the proprietor or a registered user of a registered trade mark to interfere with or restrain in the use by any person of a trade mark identical with or nearly resembling it in relating to goods in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior:
(a) to the use of the first mentioned trade mark in relation to those goods by the proprietor or a predecessor in title of his ; or
(b) to the date of registration of the first mentioned trade-mark in respect of those goods in the name of the proprietor or a predecessor in title of his ; whichever is the earlier, and the register shall not refuse (on such use being proved) is registrar the second mentioned trade mark by reason only of the registration of the first mentioned trade mark.
In short, if there is user prior to the date of registration, then the user may continue. According to the defendants, now respondents, they have been using the marks from a prior date. There are two portions of the section, one of which refers to the date of user and the other refers to the date of registration. The section seems to give the earlier date as the operative date,i.e., if the user is earlier than the registration it is that date. If we take the user of the two trade-marks as being 1960 and 1971 respectively, it means that the defendants must show that they have used the trade mark 'US HA' prior to 1960 in relation to electric irons and prior to 1971 in respect of room beaters, stoves, angithis, hot plates, etc. The above decision was followed in Micolube India Ltd. v. Maggon Auto Centre 2008 (36) PTC 231(Del). It was similarly held by the Division Bench in N.R. Dongre and Ors. v. Whirlpool Corporation and Ors. that:
According to Section 28(1) of the Act, registration of a trade mark gives to the registered proprietor thereof exclusive right to use the same in relation to the goods in respect of which it has been registered. But from the opening words of Section 28(1) namely, ``subject to other provisions'` it is clear that the right conferred on a trader is not an indefeasible right as the same is expressly made subject to other provisions of the Act. This is further, made clear by Section 27(2) of the Act, which provides that nothing in this Act shall be deemed to affect the right of action against any person for passing off the goods as goods of another person or the remedies in respect thereof.
Thus it is manifest that Section 28 of the Act and all other provisions come within the over-riding sway of Section 27(2) of the Act. Similarly Section 33 of the Act also saves vested rights of a prior user. It lays down that nothing in the Act shall entitle a registered proprietor of a trade mark to interfere with the use of the trade mark by a prior user of the same. Thus the right created by Section 28(1) of the Act in favor of a registered proprietor of a trade mark is not an absolute right and is subservient to other provisions of the Act namely Sections 27(2), 33 etc.
26. It is manifest from the pleadings and materials on record that though the plaintiff has been able to establish prima facie existence of registration in its favor, in relation to the subject marks, with effect from 1998 and 2002, yet there is no credible evidence of proof of the mark from that period; the materials are sketchy. The copies of invoices and bills are predominantly of a later period; no material has been shown on its behalf to demonstrate that its mark was used or made known prior to 1998. On the other hand, the defendant has prima facie shown that the mark was advertised in 1993 and 1999 and trade inquiries through original letters, indents, etc existed in 1993, 1994, 1995 onwards. The defendant has also shown that it obtained use of the mark "TUFF" as its telegraphic name from the Department of Posts and Telegraphs, in 1994, 1995 and 1997, by placing original receipts of the department for the purpose on the record. These show that it was, prima facie continuously using the mark since 1993 at least, enabling it to the benefit of Section 34 of the Act.
27. In view of the above discussion, it is held that the plaintiff is not entitled to ad-interim injunction. IA No. 780/2007 is therefore dismissed; IA No. 2798/2007 is disposed of in the above terms. No costs.