Delhi High Court
Micolube India Ltd. vs Maggon Auto Centre And Anr. on 7 February, 2008
Equivalent citations: MIPR2008(1)294, 2008(36)PTC231(DEL)
Author: Badar Durrez Ahmed
Bench: Badar Durrez Ahmed
JUDGMENT Badar Durrez Ahmed, J.
1. This order shall dispose of IA. No. 11702/2007 filed under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908 on behalf of the plaintiff as well as IA. No. 12433/2007 which has been filed on behalf of the defendant No. 2 under Order 39 Rule 4 CPC. The question involved in the present suit is with regard to the use of the mark MICO in relation to petroleum products including oils, greases and lubricants for automotive vehicles and automobiles, including engine oils, gear oils, tractor oils, 2T oils, transmission and hydraulic fluids and coolants.
2. On 09.10.2007, when the suit had come up for admission and the plaintiff's application for ex parte injunction was taken up by this Court, it was contended by the learned Counsel for the plaintiff that the mark MICO has been used by the plaintiff since 1960 in respect of the said petroleum products and that the same stands registered in the plaintiff's name as of 12.02.1985. The plaintiff has two registrations' one in respect of the trade mark MICO and the second in respect of the label mark which includes the word MICO. It was also contended by the learned Counsel for the plaintiff that the word MICO also forms a key and vital part of the plaintiff's cooperate name Micolube India Limited. It was further submitted that the plaintiff came to know in September, 2007 that the defendant No. 2 had started manufacturing lubricants from Bangalore using the trademark MICO and that the defendant No. 1 is the dealer of defendant No. 2 though the exact connection was unknown. On the basis of these submissions, this Court passed the following ex parte ad interim orders:
The defendants are restrained from using, selling, soliciting, exporting, displaying, advertising by visual, audio, print mode or by any other mode or manner or deal in or use the impugned trademark/label 'MICO' or any other identical and/or deceptively similar word/mark/label in relation to lubricants, petroleum products including engine oil, gear oil. The defendants are also restrained from doing any other acts or deeds amounting to or likely to infringe the registered trademark of the plaintiff No. 433800 and 433801 in class 04 as also from passing off their goods as those of the plaintiff.
3. The learned Counsel, appearing on behalf of the defendant No. 2, submitted that the plaintiff had not come to court with clean hands and has been guilty of suppression and/or concealment of material facts. It was also contended that the plaintiff's conduct has been dishonest. First of all, it was stated that the plaintiff did not disclose in the plaint that the defendant No. 2 also has a trade mark registration in respect of MICO in class 4 itself. The application for such a registration was made on 06.01.2004 and was allowed on 17.10.2005. The defendant's registration in class 4 is under No. 1259864. He submitted that this fact was not at all disclosed in the plaint with a view to mislead this Court into passing the order that it did on 09.10.2007 and that, on this ground alone, the said order is liable to be vacated.
4. It was further contended on behalf of the learned Counsel for the defendant No. 2 that, in any event, apart from the question of concealment and suppression, such an injunction cannot be granted against the defendant No. 2 in view of the specific provisions of Section 28(3) of the Trade Marks Act, 1999. It was contended that the plaintiff being the holder of the registered trade mark MICO could not seek exclusivity against the defendant No. 2 which was also the holder of the registered trade mark MICO in the same class of goods. He submitted that both the plaintiff and the defendant No. 2 could restrain the third party from using the mark MICO but they could not claim any right of exclusivity in respect of each other.
5. Faced with this situation, the learned Counsel for the plaintiff submitted that the action brought by the plaintiff is not merely of infringement of a trademark under the provisions of the Trade Marks Act, 1999 but is also one of passing off. He submitted, with reference to the decision of the Supreme Court in the case of N.R. Dongre and Ors. v. Whirlpool Corporation and Ors. , that a passing off action can be brought by a prior user even against a registered holder of a trademark. He placed reliance on paragraphs 29 and 30 of the said decision which read as under:
29. 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 he 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. Neither Section 28 nor any other provision of the Act bars an action for passing off by an anterior user of a trade mark against a registered user of the same. In other words registration of a trade mark does not provide a defense to the proceedings for passing off as under Section 27(2) of the Act a prior user of a trade mark can maintain an action for passing off against any subsequent user of an identical trade mark including a registered user thereof. Again this right is not affected by Section 31 of the Act, under which the only presumption that follows from registration of a mark is its prima facie evidentiary value about its validity and nothing more. This presumption is not an unrebuttable one and can be displaced. Besides Section 31 is not immune to the over-riding effect of Section 27(2). Placing reliance on Section 28(3) of the Act the learned Counsel for the appellant contended that when two registered proprietors of identical or near similar trade marks cannot be deemed to have acquired exclusive right to the use of any of those trade marks against each other, how can an unregistered user of the trade mark maintain an action for passing off against a registered user of the same mark and seek an injunction restraining him from using it. This argument of the learned Counsel seems to stem from a misconception about the real purpose and intent of Section 28(3). Actually Section 28(3) protects registered proprietor of a trade mark from an infringement action by another registered proprietor of an identical or near similar trade mark. In this regard it will also be necessary to extract Section 28(3) and Section 30(1)(d) which carries out the intent of Section 28(3). These sections read as under:
28(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.
30(1)(d). Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of the right to the use of a registered trademark-
...the use of a registered trade mark, being, one of two or more trade marks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act.
A reading of Section 28(3) with Section 30(1)(d) shows that the proprietor of a registered trade mark cannot file an infringement action against a proprietor of an identical or a similar trade mark. While Sections 28(3) and 30(1)(d) on the one hand deal with the rights of registered proprietors of identical trade marks and bar action of infringement against each other, Section 27(2) on the other hand deals with the passing off action. The rights of action under Section 27(2) are not affected by Section 28(3) and Section 30(1)(d). Therefore, registration of a trade mark under the Act would be irrelevant in an action for passing off. Registration of a trade mark in fact does not confer any new right on the proprietor thereof than what already existed at common law without registration of the mark. The right of goodwill and reputation in a trade mark was recognised at common law even before it was subject of statutory law. Prior to codification of trade mark law there was no provision in India for registration of a trade mark. The right in a trade mark was acquired only by use thereof. This right has not been affected by the Act and is preserved and recognised by Sections 27(2) and 33.
(30) The law of 'passing off' as it has developed, permits an action against a registered proprietor of a trade mark for its mendacious use for inducing and misleading the consumers into thinking that his goods are the goods of or are connected with the goods of a prior user of the trade mark. It seems to us that in so far as this Court is concerned, this position cannot be disputed in view of the judgment of the Division Bench in Century Traders v. Roshan Lal Duggar and Co. 1978, Delhi 250 where, while construing Sections 27(2) and 106 of the Act, it was held as follows:
From a reading of the above sections it is clear that registration of mark in the trade mark registry would be irrelevant in an action for passing off.
Thus, the law is pretty well settled that in order to succeed at this stage the appellant had to establish user of the aforesaid mark prior in point of time than the impugned user by the respondents. The registration of the said mark or similar mark prior in point of time to user by the appellant is irrelevant in an action for passing off and the mere presence of the mark in the register maintained by the trade mark registry did not prove its user by the persons in whose names the mark was registered and was irrelevant for the purposes of deciding the application for interim injunction unless evidence had been led or was available of user of the registered trade marks. In our opinion, these clear rules of law were not kept in view by the learned single Judge and led him to, commit an error.
6. Considering the submissions made by the parties up to this point and the observations of the Supreme Court in the case of Whirlpool (supra), it is apparent that the injunction order passed on 09.10.2007 cannot stand against the defendant merely on the basis of an infringement action. But if the plaintiff is able to establish his case under the common law right of passing off then an injunction can be granted in favor of the plaintiff.
7. Insofar as the passing off action is concerned, the learned Counsel for the plaintiff submitted that the plaintiff had adopted the mark MICO in 1960 in respect of its lubricants and petroleum products. There is no dispute that in this field the plaintiff is the prior user. He submitted that the plaintiff has been using the said mark openly and exclusively as would be apparent from the series of advertisements that have been filed by the plaintiff along with the plaint. The advertisements, prima facie, do indicate that the plaintiff had been openly advertising the same since the 1980s even in Bangalore where the defendant No. 2's registered office is situated. He submitted that because of long user, the mark has become distinctive of the plaintiff's goods. He submitted that these averments have been made in the plaint. On the other hand, the defendant's user in respect of the mark MICO has been admitted by the defendant only from February, 2007. The learned Counsel for the plaintiff submitted that there is no dispute with regard to the user of the trademark MICO by the defendant No. 2 in respect of the other automotive parts and the goods which fall under classes 7, 9 and 12. The question, in the present proceeding, is limited to the user of the mark in respect of lubricants which fall under class 4. He submits that insofar as this category of goods is concerned, the admitted position is that the plaintiff is the prior user and there has been continuous and long user on the part of the plaintiff and that the defendant No. 2 is only a new entrant which, as per the defendant's own admission, is from February, 2007.
8. The learned Counsel for the plaintiff then referred to the decision of a learned Single Judge of this Court in the case of Sona Spices Pvt. Ltd. v. Soongachi Tea Industries Pvt. Ltd. 2007 (34) PTC 91 Delhi. In that case, the plaintiffs were the owners of the registered trade mark SONA in respect of spices which fell under class 30. They were also the prior users of the said trademark in respect of spices. The defendant, on the other hand, was the registered proprietor of the trademark SONA in respect of the tea which fell under class 30. The defendant was also the prior user of the said trademark in respect of tea. The plaintiffs had ventured into the business of tea. The defendant had filed a cross suit and in that cross suit, filed by the defendant, the court had restrained the plaintiff from using the mark SONA in respect of tea although it was a prior user in respect of the spices and a registered user in respect thereof. However, the learned Counsel for the defendant No. 2 drew my attention to paragraph 18 of the said decision which reads as under:
18. It may be noted that it is not as if the Defendant is trying to pass off its goods as those of the Plaintiff. The Defendant is an independent manufacturer of tea and is an established player in the market. There is nothing to suggest, at least so far, that any person has been misled into believing that the tea sold by the Defendant is actually being passed off as the tea manufactured by the Plaintiff. Indeed, from the facts presented before me, it appears that such an eventuality is quite unlikely. The Plaintiff has a limited territorial market even in respect of spices and there is nothing to suggest that tea manufactured by the Plaintiff is well recognized even within the existing market of the Plaintiff. Therefore, the question of any consumer being misled into believing that tea manufactured by the Defendant is actually being passed off as tea manufactured by the Plaintiff would not arise, particularly in the absence of any evidence in this regard.
9. He lay emphasis on the fact that, before any passing off action can be established, there must be evidence or material to show that any consumer was being misled into believing that the goods of one are being passed off as the goods of other. In the aforementioned observations in Sona Spices Pvt. Limited (supra), it was noted that the question of any consumer being misled into believing that the tea manufactured by the Defendant was actually being passed off as tea manufactured by the Plaintiff would not arise and it is for this reason that the court restrained the plaintiff from using Trademark 'Sona' in respect of tea, although the plaintiff was the registered proprietor of the mark 'Sona' in respect of spices much earlier. It was also submitted that the sales of the defendant in that case in respect of the tea was much more than that of the plaintiff.
10. The learned Counsel for the plaintiff then referred to the English decision in the case of Provident financial PLC and Anr. v. Halifax Building Society 1994 Fleet Street Reports 81 (ChD). This was a case where the plaintiff No. 2 was in the motor insurance business and was using the trademark 'Halifax' since 1966. The defendant, on the other hand, was a building society and was in that business since 1928 and was also using the mark 'the Halifax' as well as 'the Halifax Building Society'. The defendant subsequently ventured into the business of building and house contents insurance and ultimately expanded this business to motor vehicle insurance in 1992. The plaintiff was aggrieved by this and complained about the use of the mark 'the Halifax' in respect of the motor insurance business. The court injuncted the defendant in that case from venturing into the motor insurance business from using the mark 'Halifax'. Various observations were made in the said decision. However, the most material observations to my mind are contained at pages 95, 96 and 97. The said observations are as under:
Passing Off The plaintiff submitted that over the last 25 years of trading, it had built up a substantial reputation amongst people engaged in the insurance trade and, to a limited extent amongst the public, as a company providing motor insurance. That reputation had been built up using the name Halifax Insurance and the name Halifax. It submitted that the defendant by moving into the motor insurance business using the X logo and its name was misrepresenting to a substantial section of the public that the defendant was connected or in some way associated with the plaintiff. That, it was submitted, would damage the plaintiff because of loss of business, damage to reputation and erosion of goodwill. Thus, it was submitted that the five characteristics of passing off, identified by Lord Diplock in Erven Warnink Besloten Vennootschap and Anr. v. J. Townend and Sons (Hull) Ltd. and Anr. [1979] A.C. 731, at 742, were present:
My Lords, A.G. Spalding and Bros. v. A.W. Gamage Ltd. 84 L.J.Ch.449 and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off : (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business of goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trade by whom the action is brought or (in a quia timet action) will probably do so.
xxxx xxxx xxxx xxxx xxxx The first two characteristics require the court to identify a misrepresentation made by the defendant in its literature in exhibit ACJ20. The submission that such a misrepresentation exists is supported by the affidavits of brokers and the public filed on behalf the plaintiff, to which I have already referred.
The defendant submitted that no such misrepresentation was made as the plaintiff had no reputation. To support that submission, the defendant commissioned a survey which was carried out by Gordon Simmons Research Group Limited. The results of that survey were set out in Mr. Gordon's affidavit. That survey was criticised by Mr. Vicken in his affidavit with, I believe, justification. However, I will disregard those criticisms. The results do not help the defendant's case. The 841 people surveyed were shown a copy of one of the plaintiff's leaflets and were asked. "Who do you think is offering this service".
Further questions were asked to try and clarify the answers given. According to the conclusion drawn by Mr Gordon, over 60 per cent of those surveyed thought that the service referred to in the plaintiff's leaflet was being offered by the defendant. Thus pesons seeing the plaintiff's literature believed that there was a connection between the plaintiff and the defendant. It is not possible to find out whether any of the 841 interviewed had ever heard of the plaintiff before. Thus it does not throw doubt upon the evidence filed by the plaintiff to the effect that persons who know of or had heard of the plaintiff believed that there were two separate companies using the word "Halifax" as part of their titles, but when they saw that the defendant was offering motor insurance, they concluded that the two companies were associated or connected.
Clearly, there is a dispute as to the extent of the plaintiff's reputation, but in the light of the plaintiff's activities since 1966, I cannot conclude that it does not reasonably arguably have a sufficient reputation.
The plaintiff, I believe, accepted that once the defendant started to expand its activities, confusion between the two companies became more likely. However, it believes that its reputation and goodwill in motor insurance should not be swamped and crushed by the plaintiff. The plaintiff believes that if the defendant is allowed to move into motor insurance, the defendant will misrepresent that the parties were and are in some way connected and that is calculated to cause the plaintiff damage. If so, the plaintiff's rights will have been infringed. I believe that such a case is reasonably arguable and it is not possible on motion to decide the issues of fact implicit in the parties' submissions.
I therefore turn to consider whether damages would be adequate compensation for the plaintiff. It it be assumed that the defendant will pending trial, offer motor insurance thereby misrepresenting that the parties are connect, I believe that damages would not properly compensate the plaintiff. First, prospective customers of the plaintiff, either attracted by avertising or by recommendation, would be lost to the defendant. I would not be possible to estimate how many of such customers of the defendant fell within that category. Secondly, the plaintiff is dependent upon the goodwill of its brokers and therefore has a policy of never dealing direct with the public. The defendant's literature could lead brokers to assume that the plaintiff and the defendant were connected and the plaintiff was not dealing direct. That would affect the plaintiff's relationship with brokers and would be likely to cause damage. Thirdly, there is evidence that the plaintiff might have to change its name. That, at the moment, is speculative, but the plaintiff would seriously have to reconsider its advertising policy. There would seem little point in arranging radio commercials if a substantial section of the public attracted by the advertising would go to the defendant for their insurance. Fourthly, the defendant is so large that I anticipate its reputation will tend to swamp that of the plaintiff. Any goodwill the plaintiff has at the moment will be subsumed into the defendant's goodwill.
11. Apart from this, the learned Counsel for the defendant No. 2 also submitted that the circumstances in which the said decision was rendered ought to be noted. The circumstances being that the material had been produced before the court in the form of evidence from the broker with regard to the possibility of deception and secondly a survey was conducted which covered 841 persons, as already noted in the above quoted observation, to show that there was likelihood of deception and likelihood of the defendant passing off its goods and services as those of the plaintiff which, in that case, was the motor insurance business.
12. The learned Counsel for the plaintiff referred to a decision of a Division Bench of this Court in the case of Shri Swaran Singh Trading as Appliances Emporium v. Usha Industries (India) and Anr. 1986 PTC 287. The said decision was relied upon for the proposition that one mark can be used by different persons for different goods. In that case, the court had permitted the use of the trademark "Usha" by the plaintiff and the defendant but for different categories of goods. This decision was cited by the learned Counsel for the plaintiff for advancing the arguments that while the defendant No. 2 could use the mark MICO in respect of other classes of goods for which it was using except in the case of lubricants for which the plaintiff was the prior user. He was, therefore, suggesting that the plaintiff had the exclusive right to use the word MICO in respect of the lubricants irrespective of the fact that the defendant No. 2 had the exclusive right to use the trademark MICO in respect of other products. The learned Counsel for the defendant No. 2 submitted that there was no dispute with the proposition in general. However, the plaintiff had to establish that it had a right under a passing off action to exclusive use of the mark MICO even in respect of the lubricants. According to the learned Counsel appearing for the defendant No. 2, the plaintiff had failed to establish such a case.
13. The learned Counsel for the plaintiff then referred to the decision of the Bombay High Court in the case of Bal Pharma Ltd. v. Centaur Laboratories Pvt. Ltd. and Anr. 2002 (24) PTC 226 (Bom) (DB) and, particularly, referred to paragraph 9 thereof for the proposition that the defendant No. 2 ought to have been aware of the plaintiff's registration of the mark MICO because the plaintiff's registration in respect of the lubricants falling under class 4 was prior in time. Therefore, it can be inferred that the defendant No. 2 being aware of the plaintiff's user of the mark permitted the plaintiff to continue to use the mark without any hindrance and, in fact, had not taken any action against the plaintiff. It is the plaintiff who has come to court for an injunction against the defendant No. 2.
14. The learned Counsel for the defendant No. 2, with reference to the decision in Bal Pharma Ltd. (supra) submitted that the said case is entirely different as it involved an action by a registered proprietor of a trademark against a non registered user of the trademark. The case also involved the question of concurrent user and not of passing off as such. Therefore, he contended that the decision would be of no application in the facts of the present case. The learned Counsel for the plaintiff, however, submitted that he was only relying on the principle.
15. Mr. Sethi, the learned senior counsel, who appeared for the defendant No. 2 submitted, with reference to the order dated 09.10.2007, that the same, upon a plain reading, would clearly indicate that it was passed merely on the basis of the fact that the plaintiff had stated that it was the registered proprietor of the trademark MICO. He submitted that had the fact of the defendant's registration in respect of the very same mark in class 4 also be made known to this Court then the order dated 09.10.2007, in all probability, would not have been passed by this Court. The learned Counsel for the defendant No. 2 also submitted that the plea of passing off has not been taken in the manner in which it should be. He submitted that the plaint has been drafted in such a manner as if to appear as an action for infringement of the trademark and the pleas with regard to passing off have been taken incidentally as is the usual practice in such suits. He submitted that the foundation for an action of passing off has not been laid in the plaint. The learned Counsel also took objection on the ground of concealment. He submitted that the plaintiff was aware of the defendant No. 2's registration under class 4 and yet withheld this information from the court. He further submitted that even if it is assumed for the sake of argument that the plaintiff did not know about the registration of the trademark in favor of the defendant No. 2 under Clause 4, before a plaint is instituted in the court for an infringement action, it is incumbent upon the plaintiff to carry out a search to see as to whether there is any trademark registered in the name of the defendant. He submitted that the plaintiff is duty bound to carry out such a search because on the basis of averments made in the plaint, he is requesting the court to pass an ex parte order of injunction which would have serious ramifications and which could even lead to ruination of the defendant's business and goodwill. It was, therefore, contended that although for the sake of argument, it may be assumed that the plaintiff was not aware of the defendant No. 2's registration, before the plaint was filed, he ought to have definitely carried out a search and ought to have then known that the defendant No. 2 had a registration in its favor. Consequently, it was submitted that the manner in which the plaint has been styled and the factum that the registration of the defendant No. 2's mark under class 4 has not been disclosed to this Court, would itself disentitle the plaintiff from seeking any equitable relief including that of injunction based on alleged passing off.
16. Mr. Sethi further submitted that the manner in which the parties have been mentioned in the memo of parties also discloses the plaintiff's intention to deceive. He submitted that the principal party in the present action is the defendant No. 2 i.e., Motor Industries Company Limited (an acronym of which is MICO). The said company has not been arrayed as defendant No. 1 but as defendant No. 2. The defendant No. 1 is one Maggon Auto Centre which is merely a dealer of the defendant No. 2. He submitted that when the counsel go through the cause list of the court, only the name of the defendant No. 1 appears and even the cause list of the day discloses the case as Micolube India Ltd. v. Maggon Auto Centre and the name of the defendant No. 2 does not figure in the daily cause list of the court. This being the case, it would be impossible for the representatives of the defendant No. 2 and/or its retained counsel to scan the list and to become aware of any litigation concerning them. He submitted that had the name of defendant No. 2 been shown as defendant No. 1 then somebody might have been present on the very first day to draw the notice of this Court to the fact that the mark also stands registered in the name of the defendant No. 2 in class 4. He submitted that all these factors cumulatively go to show that the plaintiff did not approach this Court with clean hands and has managed to get an order of ex parte ad interim order in its favor by withhelding the material information.
17. Mr. Sethi further submitted that the entire case that is sought to be built up on the ground of passing off by the plaintiff in the course of hearing has not even been pleaded. He also submitted that reliance of the learned Counsel for the plaintiff on the case of Provident financial PLC (supra) and the argument in respect of a large player versus a smaller player has been built merely on the basis of oral submissions and is not supported by any pleadings. He submitted that it might have been entirely a different case had the plaintiff come to court honestly and stated that the defendant No. 2 is an established concern and has several registered trademarks under several categories and that the trademark of the defendant would fall within the definition of well known trademark as indicated in Section 2(2g) of the Trade Marks Act, 1999. He submitted that the plaintiff's case ought to have been that although the defendant No. 2 has trademark registrations in respect of the mark MICO which is known worldwide, the same pertain only to other commodities and goods which do not fall within class 4. The plaintiff ought to have stated that because of the size of defendant No. 2 and its late entry into the field of lubricants, the plaintiff feared that it would be swamped out and that such an action would be deceitful on the part of the defendant No. 2. It is only if such averments were contained in the plaint that the plaintiff could raise the arguments of it being swamped as is sought to be raised in the course of the hearing, but according to the learned Counsel for the defendant No. 2 no such pleas have been taken in the plaint. And, therefore, no amount of arguments can fill in this lacuna.
18. It was then contended by the learned Counsel for the defendant No. 2 that the adoption of the mark MICO by the defendant is not something which is dishonest or unnatural. The defendant's corporate name is Motor Industries Company Ltd and MICO is merely an acronym. Secondly, he submitted that MICO is a well known brand, particularly, in respect of spark plugs in India as well as abroad and that MICO has been registered in India in the defendant No. 2's name since 1953 in several classes. He submitted that it cannot be possible that the plaintiff was unaware of these registrations and the use of the mark by the defendant No. 2. Referring to the case in Provident financial PLC (supra), the learned Counsel drew the attention of the court once again to the five principles which are necessary for a passing off action as indicated in page 95 thereof. He submitted that these principles have also been reiterated by the Supreme Court in the case of Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. wherein the Supreme Court observed as under:
As per Lord Diplock in Erven Warnink by v. J. Townend and Sons the modern tort of passing off has five elements i.e. (1) a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence), and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so.
19. Similar observations have been made by the Supreme Court in the case of Wander Ltd. and Anr. v. Antox india P. Ltd. 1990 (Supp) SCC 727 in paragraph 16 which reads as under:
An infringement action is available where there is violation of specific property-right acquired under and recognised by the statute. In a passing-off action, however, the plaintiff's right is independent of such a statutory right to a trade mark and is against the conduct of the defendant which lends to or is intended or calculated to lead to deception. Passing-off is said to be a species of unfair trade competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation which another has established for himself in a particular trade or business. The action is regarded as an action for deceit. The tort of passing-off involves a misrepresentation made by a trader to his prospective customers calculated to injure, as a reasonably foreseeable consequence, the business or goodwill of another which actually or probably, causes damage to the business or goodwill of the other trader. Speaking of the legal classification of this form of action, Lord Diplock said:
Unfair trading as a wrong actionable at the suit of other traders who thereby suffer loss of business or goodwill may take a variety of forms to some of which separate lables have become attached in English law. Conspiracy to injure a person in his trade or business is one, slander of goods another but most protean is that which is generally and nowadays, perhaps misleadingly, described as "passing off". The form that unfair trading takes will alter with the ways in which trade is carried on and business reputation and goodwill acquired. Emerson's maker of the better mousetrap if secluded in his house built in the woods would today be unlikely to find a path beaten to his door in the absence of a costly advertising campaign to acquaint the public with the excellence of his wares.
20. At this juncture, the learned Counsel for the plaintiff submitted that he also relies upon certain observations made in this very judgment which are to be found in paragraph 9 thereof which reads as under:
5. Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated ...is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favor at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the "balance of convenience lies". The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted.
21. The learned Counsel for the defendant No. 2 submitted that the essential feature of a passing off action is that one party must attempt to pass off his goods as those belonging to and identifiable with another. He submitted that no evidence whatsoever has been produced by the plaintiff to indicate as to how the defendant No. 2 has passed off its goods as those of the plaintiff. He submitted that unless there is material to show that the defendant No. 2 had or intends to pass off its goods as those of the plaintiff, no action for passing off can be maintained. In this connection, he submitted that the defendant No. 2 is a very large concern having sales of Rs. 3783 crores in India in respect of its other automotive products. There is also no doubt that the defendant No. 2 is a new entrant in the field of lubricants but there is no doubt that it has a large presence in the automotive industry since 1951 and that its mark MICO is identifiable and distinctive of its products. The learned Counsel for the defendant No. 2 also submitted that the defendant No. 2 is a subsidiary of Robert Bosch GmBH which is a company registered in Germany and which has a worldwide turnover of Euro 43.7 billion. He, therefore, submitted that, in this background, it is difficult to conceive that the defendant No. 2 is trying to pass off its goods as those of the plaintiff whose market presence and extent of sales is also unclear inasmuch as there has been no mention of it by the plaintiff.
22. Based on these submissions, the key questions that arise for determination are:
(1) Whether the plaintiff has concealed and/or suppressed material facts from this Court "If so, its effect"
(2) Whether the plaintiff, prima facie, has been able to establish the existence of the ingredients of a passing off action as discussed above Question No. 1:
23. With regard to the question of concealment and/or suppression of the material facts from this Court, it is pertinent to note that in paragraph 20 of the plaint, it is averred that the defendant is not the proprietor of the trademark 'MICO' and has adopted the same in relation to the impugned goods (lubricants) in the course of the trade without the leave and license of the plaintiff. It is also averred that the defendants have no right to use the said mark in any manner in relation to the impugned goods and business and such user would be in violation of the plaintiff's rights therein. The impression one gets by reading the said paragraph as well as the other averments contained in the plaint is that while the plaintiff is the registered proprietor of the trademark 'MICO' under class 4 which includes lubricants, the defendants do no have any such registration. A reading of the order dated 09.10.2007 also suggests that the ex parte ad interim injunction granted in favor of the plaintiff and against the defendants was based entirely on the averments that the plaintiff is the registered proprietor of the trade mark insofar as the lubricants are concerned and that the defendant No. 2 has no right whatsoever to use the said mark in respect of the said goods. As noted earlier in this order, it has now become clear that the defendant No. 2 also has a trade mark registration in respect of the mark 'MICO' in class-4 itself which includes lubricants. The defendant No. 2 had applied for such a registration on 06.01.2004 which was allowed on 17.10.2005 under registration No. 1259864. From this, it is apparent that what the plaintiff has averred in the plaint and particularly in paragraph 20 thereof is not true.
24. The next point that arises is whether the plaintiff intentionally withheld the information and made false averments or it did so unintentionally and inadvertantly. In considering this aspect of the matter, it is important to note the submissions made by the learned Counsel for the defendants that when a party comes to court for an infringement action, then it is duty bound to conduct a search to ascertain as to whether the defendants have any registration in respect of the trade mark in question. I agree with this submission made by the learned Counsel for the defendants. It is relevant to note that based on the averments made in the plaint with regard to registration of the trademark in question, the court takes a prima facie view at the ex parte stage and decides to grant or not to grant an injunction. It is, therefore, the duty of the plaintiff to state clearly as to whether the defendants have or do not have a trade mark registration in respect of the mark in question and in respect of the impugned goods and services. In the present case, the plaintiff cannot be let off by accepting its plea of feigned ignorance. If it was ignorant of the registration of the trade mark in favor of the defendant No. 2 in respect of the lubricants, it was its duty to have informed itself by conducting a search and thereafter placing the full facts before the court.
25. Another factor which goes against the plaintiff is the manner in which the parties have been arrayed. The defendant No. 2 is the main defendant who has the registration of the well known mark 'MICO' in respect of automotive parts. However, the plaintiff has chosen to array Maggon Auto Centre as the main defendant when, according to the averments made in paragraph 17 of the plaint, it is averred that the defendant No. 1 is only a dealer of the impugned goods of the defendant No. 2 and that the exact relationship between them is not known to the plaintiff and that the defendant No. 2 is called upon to disclose the exact relationship between them. It is unfortunate that the main defendant (Motor Industries Co. Ltd.) has been arrayed as defendant No. 2 and Maggon Auto Centre, who is alleged to be a dealer of the main defendant and whose exact relationship is unknown to the plaintiff is arrayed as defendant No. 1. It is not only in this case, but in severalother cases that this Court has noticed this unhealthy trend on the part of the plaintiffs to array the main defendant as defendant No. 2 or defendant No. 3 while naming some innocuous dealer or retail outlet as defendant No. 1. The object is easily discernible. When the counsel for the main defendants scan the list of cases, they would not be able to know as to whether any case has been filed against them so as to enable them to appear on the very first date on which the case is listed before court. The very fact that the plaintiff has also indulged in this practice is also an indicator that it did not want the counsel for the defendant No. 2 to appear on the first date on which the matter was taken up for consideration of the grant or non-grant of ad interim injunction. This fact also dis-entitles the plaintiff to any equitable relief. I am of the view that the plaintiff has concealed and suppressed material facts from this Court.
Question No. 2:
26. This by itself would be sufficient to vacate the ex parte ad interim injunction granted on 09.10.2007. However, with regard to the second aspect of whether the plaintiff has been able to establish the existence of the ingredients of a passing off action also, the answer is in the negative. As pointed out in several decisions noted above and particularly in the Supreme Court decision in the case of Cadila Healthcare Ltd (supra), the well recognised ingredients of the modern tort of passing off are 5 in number: (1) there must be a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or her ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence), and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so. In the facts narrated above, it is apparent that there is no misrepresentation on behalf of the defendant No. 2 to any prospective customers much less a misrepresentation calculated to injure the business or goodwill of the plaintiff.
27. The defendant No. 2 has been using the mark 'MICO' in respect of various automotive parts worldwide. The plaintiff also admits that insofar as these automotive products are concerned, the defendant No. 2 has exclusive right to use the mark 'MICO'. The plaintiff is only claiming exclusivity of the right to use the mark in respect of lubricants. There is no doubt that the plaintiff has alleged that it has been in the market for lubricants and petroleum products since 1960 and has been selling its products under the mark 'MICO'. But, there is no indication as to the extent of the presence of the plaintiff in the market. On the other hand, the defendants' mark 'MICO' which has been used for other automotive products is extremely well-known worldwide as also in India. In fact, prima facie, it appears that when the trademark 'MICO' is employed prospective customers would link it with the defendant No. 2 rather than the plaintiff. Therefore, because of the overwhelming market share of the defendant No. 2 in respect of automotive parts sold under the mark 'MICO', it would be difficult to accept, at this prima facie stage, that the defendant No. 2 has misrepresented to prospective customers of the plaintiff with an object of injuring the plaintiff's business or goodwill. It is more likely that the defendant No. 2 has entered into the field of lubricants and has employed its registered mark 'MICO' being oblivious of the plaintiff's presence in the market. There is no material which has been placed by the plaintiff to indicate, as was done in the case of Halifax Building Society (supra), to show that the consumers were being misled into believing that the goods of the defendant No. 2 were actually those of the plaintiff. There is also no material to indicate as to whether the entry of the defendant No. 2 in the field of lubricants was calculated to injure the business or goodwill of the plaintiff. Consequently, the ingredients of passing off as per settled principles are not established, prima facie.
28. In view of the aforesaid discussion on the two issues, indicated above, it has to be held that the plaintiff is not entitled to the confirmation of the injunction order passed on 09.10.2007. On the contrary, the defendants and in particular the defendant No. 2 has made out a case for vacation of the said order.
29. Before I part with these applications, the argument with regard to 'swamping' also needs to be considered. It was contended by the learned Counsel for the plaintiff that the entry of the defendant No. 2 using the mark 'MICO' for lubricants and other petroleum products would completely swamp the plaintiff's business and would run him out of business. He submitted that this course of action was not permissible and, therefore, an injunction of the type given in the case of Halifax Building Society (supra) was liable to to be passed in the plaintiff's favor in this case also. This argument is easily dispelled by what was submitted by the learned Counsel for the defendant that before an argument can be advanced, it must be based on a foundation which it laid down in the pleadings. Insofar as this argument is concerned, there are no averments in the plaint with regard to the plaintiff being swamped or the fear of the plaintiff being swamped by the sheer magnitude and size of the defendant No. 2 on account of its entry into the field of lubricants. Since there is no such pleading in the plaint, no amount of evidence or of arguments can be raised on this aspect of the matter.
30. The plaintiff's application under Order 39 Rules 1 and 2 of CPC (IA No. 11702/2007) is dismissed, the defendant No. 2's application under Order 39 Rule 4, CPC (IA No. 12433/2007) is allowed. The said order dated 09.10.2007 stands vacated.