Madras High Court
M/S.Nexmoo Solutions (India) Private ... vs M/S.Nexmo Inc on 31 March, 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on : 15.02.2018 Delivered on : 01.03.2018 CORAM THE HON'BLE MR.JUSTICE M.SUNDAR Original Application No.1171 of 2015 in C.S.No.876 of 2015 M/s.Nexmoo Solutions (India) Private Limited Rep. by its Managing Director S.Pandiarajan No.18/8, Selvarangaraja Street Little Mount Saidapet Chennai 600 015 .. Applicant/Plaintiff Vs. M/s.Nexmo Inc., Rep. by its CEO, Tony Jamous Having Office at 4th Floor 217, Second Street San Francisco CA- 94105 United States of America .. Respondent/Defendant Application filed under Order XIV Rule 8 Original Side Rules read with Order XXXIX Rules 1 and 2 of Code of Civil Procedure to grant an order of ad interim injunction restraining the respondent, their directors, officers, servants, agents, legal representatives, successors-in-business, assigns or any one claiming through or under them from passing off or enabling others to pass of the respondent business/goods/services as and for the business/goods/services of the plaintiff by using the trading style/trade name and / or e-mail address, website address www.nexmo.com or any other mark deceptively similar to the plaintiff trade name 'Nexmoo' thereto or any other manner whatsoever doing any other thing as may be likely to cause confusion or deception amounting to passing off of their service and business as and for those of the applicant, pending disposal of the suit. For Applicant : Mr.P.V.S.Giridhar of M/s.Giridhar and Sai For Respondent : Mr.K.Harishankar ORDER
The sole applicant herein is the lone plaintiff in the main suit. Similarly, the sole respondent in this application is the lone defendant in the main suit. For the sake of convenience and clarity, parties in this application are referred to by their respective ranks in the main suit.
2.Main suit has been filed by the plaintiff alleging passing off and seeking injunction. There are usual prayers for surrender of alleged offending mark, accounts, for damages also, besides a prayer for costs and a residuary prayer.
3.Facts that are absolutely essential sans other details alone are set out in this order for the sake of brevity. Such a course is being adopted also because of the trajectory of this litigation thus for and stage at which this interlocutory application is being taken up for disposal. In sum and substance, domain name of the plaintiff is Nexmoo and plaintiff's website www.nexmoo.com. The defendants website is www.nexmo.com.
Plaintiff has predicated the main suit on the ground that it is a prior user and the use of a mark, which is not similar, but virtually same with only one syllable o separating the two is causing confusion. As set out supra, complaint is passing off and prayer is inter alia for injunction. This is the crux and gravamen of this lis.
4.The main suit is of the year 2015. Plaint was presented on 28.10.2015 to be precise. In the normal course, I would not even have taken up this interlocutory application for hearing more than two years after the institution of suit. However, in the instant case learned counsel for plaintiff Mr.P.V.S.Giridhar submitted very persuasively that the interlocutory application should be taken up, as according to him, the interlocutory application was argued four times earlier, but could not be concluded and a decision rendered for reasons which were not under anybodys control. It was also pointed out that interlocutory application was taken out along with the main suit and filed along with the main suit on 28.10.2015. Mr.K.Harishankar, learned counsel for sole defendant very fairly did not dispute this submission. In fact, he joined learned counsel for plaintiff in affirming that this interlocutory application was argued quite elaborately on four different occasions, but could not be concluded and a decision could not be rendered for reasons which were under nobody's control.
5. It is in the aforesaid backdrop that I heard this interlocutory application.
6. Though this is being treated as an interlocutory application taken out emergently along with the main suit, considering the fact that pleadings in the main suit are complete, the trial can be concluded and decision can be rendered in the main suit itself very quickly inter alia by resorting to Case Management and stiff time lines under Order XV-A of Code of Civil Procedure, 1908, (CPC for brevity) as amended by the Commercial Courts Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (4 of 2016) (hereinafter referred to as Act 4 of 2016 for brevity).
7. Owing to the narrative supra, I intend disposing of this application by a short order by referring to core issues alone leaving all other issues and aspects of the matter to be decided in the main suit post trial.
8. As set out supra, plaintiffs website is www.nexmoo.com and defendants website is www.nexmo.com. There can be very little doubt in anybodys mind that the two names are too close for comfort. Henceforth I am referring to the two domain names and websites as nexmoo and nexmo for brevity and convenience.
9. Plaintiff contends that in the first week of April 2015, it became aware of defendant trading in the name nexmo through one of its customers. To be specific, according to the plaintiff, on 31.03.2015 one of plaintiffs customer had purchased defendants products through online website nexmo. The product purchased by plaintiffs customer is prepaid bulk SMS. The invoice, in this regard being Invoice No.20786, dated 31.03.2015 has also been placed before me. Responding to this, learned counsel for defendant submits that the invoice clearly shows the name and address of the defendant and clearly contains the name nexmo and there is no scope for deception or confusion. In this regard, learned counsel for defendant emphasise that this is a suit for passing off and deception is an imperative parameter in such suits. It is also pointed out by learned counsel for defendant that this one transaction cannot be a basis for cause of action in suits. In other words, in my understanding, learned counsel for defendant is saying that one swallow does not make a summer. This is disputed by learned counsel for plaintiff and huge amount of material is placed before me to say that it is not one solitary case and there have been innumerable instances of deception.
10. The next aspect of the matter is regarding the nature of services. Learned counsel for defendant takes me through some hard copies, being print out materials downloaded from plaintiffs website, to show that plaintiffs line of activity is providing photographs of celebrities with their autograph, whereas the defendant is in the field of bulk SMS. This again is disputed by the plaintiff counsel by saying that their activity is not restricted to celebrities with autographs as aforesaid and several hard copies of print outs, being downloads from website, have been placed before me in an attempt to show that the line of activity and the products have several overlaps. To be noted, all these documents have to be proved in a manner known to law as they have to be supported by affidavit under Section 65-B of the Evidence Act. In this backdrop, while there can be no two opinions that the trial has to be expedited and pleaded inter alia by resorting to Case Management hearing under Order XV-A of CPC, as amended by Act 4 of 2016, the critical question is whether the defendant should continue to operate nexmo or should they be interdicted from doing so between now and conclusion of trial and decision in the suit. As already alluded to supra, no elaborate inferential process is required to say that nexmoo and nexmo are too close for comfort. With this in mind this Commercial Division looks at a few undisputed dates. Undisputed dates as given in the reply affidavit of the plaintiff in a tabular column are as follows:
SI.No Particulars Applicant/Plaintiff Respondent/ Defendant 1 Date of Incorporation 07.11.2005 2010 2 Date of use of TM in India (as admitted in TM51) 07.11.2005 Proposed to be used (as on 02.03.2015) 3 Date of acquisition of domain name 19.08.2005 2010 4 Date of commencement of website 07.11.2005 2010
11. In the aforesaid table, defendant has reservation about only one date and that date is date of acquisition of domain name of the defendant, which has been shown as 2010. While there is no dispute that the defendants date of commencement of website is only 2010, defendant submits that date of acquisition should not be construed as 2010 because defendants predecessor-in-title, a Russian entity at St. Petersburg in Russia had acquired the domain name way back in 2004. Therefore, I wanted the defendant to take me through the document under which the defendant acquired the aforesaid domain name from its predecessor in Russia and as to how the predecessor had acquired the domain name in 2004. It is fairly submitted by learned counsel for defendant that there is no document readily available in this regard at present. However, I leave open this question also to be established in trial. It is open to the defendant to establish in trial in a manner known to law that it had acquired the domain name from Russian predecessor in 2010 and that Russian predecessor had in turn acquired the domain in 2004. This leaves us with date of commencement of website.
12. While the date of commencement of plaintiffs website is 07/11/2005, the defendants website was commenced only in 2010. Therefore, the plaintiff, undoubtedly, is a prior user. In other words nexmoo is a prior user qua nexmo. One other aspect which acquires significance is the defendants predecessor-in-title i.e., Russian entity, though said to have acquired domain name in 2004, did not have any presence in India. This, according to me, is very crucial, more so as this position is not disputed. Therefore, it is very clear that nexmo had no presence whatsoever in India till 2010. To be noted plaintiff came to know of defendant only in April 2015 and this suit has been filed in 2015. Also to be noted, this instant application is being heard as one moved emergently along with the suit owing to trajectory of litigation alluded to supra. in More importantly when plaintiff company was incorporated on 07.11.2005 and when the plaintiff company commenced the website on the same day i.e., 07.11.2005 with nexmoo, there was no nexmo in India at all and there was none for the next half a decade. This, to my mind, tilts the balance of convenience in favour of the plaintiff. Defendant counsel also fairly submits that it is not their case that plaintiff was inspired by nexmo or defendant's predecessor Russian entity. There is one more aspect which to my mind appears to tilt the balance of convenience more in favour of the plaintiff. That is the relative hardship theory. In the hearing, it comes to light that defendant is a giant entity in St. Francisco, USA with a huge turn over. It is not in dispute before me that only less than 1% of the defendants turnover is by way of revenue generated through its presence in India. To be precise, I am informed (without dispute or disagreement) that only 0.7% of the defendants turnover is yielded from its business activity in India. In contra distinction, (again without dispute or disagreement) more than 80% of the turnover of the plaintiff, which is an Indian company, is from its activity in India. In my opinion, this clearly tilts the balance of convenience and relative hardship in favour of the plaintiff. In other words, if the interlocutory prayer in this application is acceded to, it will hardly hurt the defendant. Only 0.7% of its turnover will be at stake between now and disposal of the suit. On the contrary, if the prayer for interim order is not acceded to, the possible erosion in the business of plaintiff that can be caused is so huge that it may lead to virtual annihilation of plaintiff.
13. From the narrative supra, it will be clear that all three cardinal parameters for grant of interim injunction are in favour of acceding to the prayer in this interlocutory application. The time honoured three cardinal principles are prima facie case, balance of convenience and irreparable injury incapable of compensation.
14. As plaintiff commenced its website on 07.11.2005 (to be noted the domain name was also acquired in 2005), balance of convenience is in favour of plaintiff as plaintiff is a prior user at least by a clear half a decade and as defendant has only a 0.7% presence in India. Irrepairable injury incapable compensation is clear as daylight as plaintiff, which has more than 80% of its revenue from its operations in India, may virtually be annihilated. On top of all these, one common thread that runs through all these cardinal principles is nexmoo and nexmo are too close for comfort and no inferential process or reasoning is required to say this.
15. Though obvious, it is made clear that all views expressed in this application are only for the purpose of disposal of this interlocutory application. In other words, the main suit shall be heard and decided without being swayed by views expressed in this order.
16. As already set out supra, pleadings are complete and trial can be easily completed in quick time. I find no reason for the parties to have more than one witness on either side as most facts are undisputed. Marking of exhibits may also may not consume much time.
17. As pleadings are complete, the process of admission and denial of documents as adumbrated in Order XI Rule 4 of CPC as amended by Act 4 of 2016 shall be completed within three weeks from the delivery of this order. Within a week thereafter i.e., on expiry of four weeks from the date of delivery of this order, the suit shall be listed for Case Management hearing before this Commercial Division as under Order XV-A of CPC which was introduced into CPC by Act 4 of 2016. In the Case Management hearing, issues can be framed and there is no reason why the trial cannot be completed within six weeks as adumbrated in Order XV-A of CPC which was introduced into CPC by Act 4 of 2016. If this is done, judgment will be delivered within 90 days there from by this Commercial Division.
18. Therefore, I deem it appropriate to grant interim injunction as prayed for a period of one year from the date of pronouncement of this order with liberty to both parties to seek extension or termination of the order if there is any undue delay and/or breach of timelines to be fixed in case management hearing.
Owing to all that have been set out supra, there shall be an order of inteirm injunction as prayed for pending disposal of the suit for a period of one year from the date of pronouncement of this order.
01.03.2018 gpa M.SUNDAR.J gpa O.A.No.1171 of 2015 in C.S.No.876 of 2015 01.03.2018