Delhi High Court
Country Inn Private Ltd. vs Country Inns And Suites By Carlson, Inc. ... on 11 February, 2010
Author: Manmohan Singh
Bench: Manmohan Singh
.
* HIGH COURT OF DELHI : NEW DELHI
+ I.A. No. 13146/2008 in CS(OS) No. 2264/2008
COUNTRY INN PRIVATE LTD. ...Plaintiff
Through : Mr. Vijay Pal Dalmia, Mr. Varun
Singh, Ms. Anubha Singh and
Mr. Saurav Bhasin, Advs.
Versus
COUNTRY INNS AND SUITES BY CARLSON, INC. & ANR.
....Defendants
Through : Mr. Vivek Dhokalia and Ms. Punita
Bhargava, Advs.
AND
+ I.A. Nos. 11437/2009 & 15398/2009 in CS(OS) No. 1652/2009
COUNTRY INNS AND SUITES BY CARLSON, INC. & ANR.
...Plaintiffs
Through : Mr. Vivek Dhokalia and Ms. Punita
Bhargava, Advs.
Versus
COUNTRY INN PRIVATE LTD. ....Defendant
Through : Mr. Vijay Pal Dalmia, Mr. Varun
Singh, Ms. Anubha Singh and
Mr. Vikas Mishra, Advs.
Decided on: February 11th, 2010
Coram:
HON'BLE MR. JUSTICE MANMOHAN SINGH
1. Whether the Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported Yes
in the Digest?
CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 1 of 30
MANMOHAN SINGH, J.
1. By this order I shall dispose of two interim applications under Order XXXIX Rules 1 & 2 of the Code of Civil Procedure, 1908. One is filed by Country Inn Private Limited being IA No. 13146/2008 in the present matter being CS(OS) No.2264/2008 and the second is IA No.11437/2009 filed by Country Inns & Suites By Carlson, Inc. in CS (OS) 1652/2009, both being cross suits filed by the parties against each other.
2. The facts in both the matters are common, therefore, as agreed by the parties, both the interim applications be disposed of by the single order. For the purpose of convenience, the Plaintiff in the present suit M/s. Country Inn Private Limited shall be referred as "Plaintiff" and M/s. Country Inns & Suites by Carlson, Inc. & Anr. as "Defendant".
3. The Plaintiff filed a suit i.e. C.S. (OS) 2264/2008, against the Defendants for permanent injunction restraining the Defendants herein from infringement of trademark, passing off, acts of unfair competition, dilution, damages/rendition of accounts with respect to the registered trade mark/corporate name of the Plaintiff being „Country Inn‟.
4. The case of Country Inn Pvt. Ltd., the Plaintiff in CS (OS) No.2264/2008 and Defendant in CS(OS) No.1652/2009, is that the Plaintiff company was incorporated on 13th July, 1993 under the Companies Act, 1956 with the object of carrying on the business of hotels, motels, restaurants etc. Subsequent to the incorporation, the Plaintiff started its resort/hotel under the trade mark/name "Country CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 2 of 30 Inn" in 1993.
5. The Plaintiff adopted and began operations under the mark and name "Country Inn" for its resorts in the year 1993 and since then the Plaintiff has continuously, openly, uninterruptedly and extensively been carrying on the aforesaid business activities.
6. As per the case of the Plaintiff, the Plaintiff is the prior user, legal owner and lawful proprietor of the trade mark "Country Inn" in India. The trade mark "Country Inn" is registered in India under the provisions of the Trade Marks Act, 1999. Details of registration of trade mark "Country Inn" in favour of the Plaintiff are given herein below:
S.No. Trade Mark Number Class Status of
Registration
1. COUNTRY INN 604933 32 Registered
(Logo form)
2. COUNTRY INN 604932 33 Registered
(Logo form)
3. COUNTRY INN 604934 30 Registered
(Logo form)
4. COUNTRY INN 604935 29 Registered
(Logo form)
7. As per plaintiff, it had permitted its other group companies namely, Sarp Hotels Private Ltd., Forest Fern Resort Private Limited, Forest Fern Hospitality Private Limited and Orphic Resorts Limited to run resorts under the name of "COUNTRY INN" who are located at the strategic places enumerated herein below:
(i) Jim Corbett
(ii) Bhimtal
(iii) Kosi
(iv) Mussoorie
CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 3 of 30
(v) SATTAL
8. The Plaintiff has been popularizing the mark "Country Inn"
in relation to the hospitality industry since the Plaintiff adopted and began operations.
9. The Plaintiff‟s resorts under the mark "Country Inn" cater to a wide array of individual and corporate clients including Max, NIIT, Ranbaxy Laboratories Limited, HP, HCL, Hero Honda, LG, Modern School, Reliance, HLL, IBM and Apollo Tyres.
10. The case against the Defendant is that in the last week of March 2008 it came to the notice of the Plaintiff that the hotel under the name "COUNTRY INN" was being constructed in Sahibabad by the Defendant No.1, which constituted unauthorised use of the Plaintiff‟s registered trademark "COUNTRY INN".
11. The Plaintiff submits that a legal notice dated 4.4.2008 was sent by one of the group companies of the Plaintiff to the Defendant No.1 and one of its promoters. A reply to the said notice dated 15.5.2008 was received and from the reply it was evident that the Defendant had tried to usurp the trademark and goodwill of the Plaintiff as the Defendant No.1 is admittedly a subsequent user of the mark/name "COUNTRY INN" in India.
12. It is the contention of the Plaintiff that Defendant No.1 with mala fide intention, wants to take advantage and benefit of the Plaintiff‟s trademark "COUNTRY INN" and is also causing dilution of the Plaintiff‟s trademark with dishonest intention and such use of the mark by the Defendant no. 1 being COUNTRY INN & SUITES BY CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 4 of 30 CARLSON INC., is causing confusion and deception in the mind of the public as the said mark is deceptively similar to the mark of the Plaintiff and the Defendant are passing off their business/services as that of the Plaintiff and the said act of the Defendant constitutes unfair competition and in fact the Defendant are diluting the distinctive and well-known mark "COUNTRY INN" of the Plaintiff.
13. In support of its submission, the Plaintiff has filed the following documents which will also prove the user since 1993:
a) Copies of the registration certificate of the Plaintiff for its mark "COUNTRY INN" vide no.604932, 604933 and 604935.
b) Internet printout of the "Country Inn (Label)" vide no.604934.
c) Internet printout of the status "Country Inn (Label)" in Class 42 vide trade mark application no.1702292.
d) Official receipt of having filed for TRADE MARK-46 for the trade marks registered vide no.604932, 604933, 604934 and 604935.
e) Copies of Pamphlets, brochures& promotional materials of the Plaintiff for its resorts under the mark "COUNTRY INN".
f) Certificate of Registration dated 21.04.1994.
g) Bill from the Department of Telecommunications dated 26.08.1994 in the name of Country Inn along with Challan dated 04.07.1994.CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 5 of 30
h) Copy of Invoices of the Plaintiff Company‟s and its group companies‟ resorts under the mark "COUNTRY INN"
from the year 1994 up to 2008.
i) Copies of promotional materials in magazines and print media by the Plaintiff for its resorts under the Mark "COUNTRY INN".
j) Copies of promotion by the Plaintiff in various hotel and restaurant guides of the Plaintiff‟s resorts under the Mark "COUNTRY INN".
k) Copy of the Certificate from the Registrar of domain name www.countryinn.co.in in the name of Plaintiff.
l) Copy of Certificate of Incorporation of the Plaintiff Company and Copy of Memorandum & Articles of Association of the Plaintiff Company.
14. The case of the Defendant in Suit No. 2264/2008 is that the Defendant is part of the well known Carlson Companies Inc./Carlson Hotels Worldwide (hereinafter, „Carlson Group‟), an acknowledged leader worldwide in the travel and hospitality industry. The Carlson Group operates its hotels and resorts, spanning luxury to economy, in over 150 countries of the world, under five well known and highly popular international brands viz. „REGENT HOTELS & RESORTS‟, „RADISSON HOTELS & RESORTS‟, „PARK PLAZA HOTELS & RESORTS, „PARK INN‟, and „COUNTRY INN & SUITES BY CARLSON‟ and its variants „COUNTRY INN BY CARLSON‟ and „COUNTRY SUITES BY CARLSON‟.
CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 6 of 30
15. As per the Defendant, with regard to its rights in India as far as the disputed mark is concerned, it has registered its COUNTRY INN and COUNTRY INN & SUITES BY CARLSON marks internationally. The first registration took place in USA in 1986. In India, the mark COUNTRY INN & SUITES BY CARLSON (word) is registered under no. 1237378 in class 42 in the name of Defendant since 2003 (when service mark registration became available).
16. In addition, the marks COUNTRY INN BY CARLSON (device) and COUNTRY SUITES BY CARLSON (device) are registered in class 16 since 1994 in the name of Defendant. Defendant‟s marks COUNTRY INN & SUITES BY CARLSON (word) and Device under which it operates its hotels worldwide including India are well- known marks within the meaning of Section 11(6) of the Act and are entitled to protection as such. The very first Indian hotel under the COUNTRY IN & SUITES BY CARLSON name mark became fully operational at Katra, Jammu and Kashmir on January 2002.
17. Since then other hotels under the COUNTRY INN & SUITES BY CARLSON mark have been established in six other Indian cities namely, Jaipur (in 2004), Paradeep (in 2004), Ludhiana (in 2005), Jalandhar (in 2005), Haridwar (in 2005) and Goa (in 2007).
18. The COUNTRY INNS & SUITES BY CARLSON brand has been the subject matter of media comments in newspapers such as Economic Times, Financial Express etc. as well as in the electronic media.
19. The Defendant has spent millions of dollars in the promotion, CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 7 of 30 protection and advertisement of its COUTNRY INN & SUITES BY CARLSON marks, resulting in unparalleled reputation and goodwill so that anyone who sees the said marks would associate the same with Defendant alone.
20. Samples of print media coverage precedes the formal launch of hotels in India under the COUNTRY INN & SUITES BY CARLSON brand in 2001 and dates back at least to 1998 and the same are placed on record.
21. The first application for a COUNTRY IN (device) mark, as depicted below, was filed by a predecessor of the Defendant in the USA on November 24, 1986 under Serial No. 73/632,243. The registration for COUNTRY INN (device) mark was obtained by a predecessor of the Defendant in 1988 (claim of use since 1987) and also issued under registration no. 1,522,193 in class 42.
22. The first COUNTRY INN & SUITES BY CARLSON (Device) registration was issued to a predecessor of Defendant in the USA on July 9, 1990 (claim of use in 1992) and issued under registration no. 1,747,925 in class 42. Since then, the Defendant has obtained many other registrations for COUNTRY INN formative marks, including COUNTRY INN BY CARLSON (word or design) and COUNTRY INN & SUITES BY CARLSON (word or design), in about 55 jurisdictions.
23. According to the Defendant, its rights in the phrase COUNTRY INN go back to 1987 when the mark was first devised and adopted and put to use for its hotels in the USA by it. Between 1987- CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 8 of 30 1992 the mark COUNTRY INN evolved to COUNTRY HOSPITALITY INN (device) and then to COUNTRY INN BY CARLSON (word and device).
24. During this period, Defendant had around 30 hotels operating under these and similar marks (around 20 in USA and 10 in Canada). The COUNTRY INN mark evolved to COUNTRY INN & SUITES BY CARLSON (word and device) in 1992. Since 1987, the COUNTRY INN marks have been extensively used by Defendant both in USA and internationally for and in relation to its hotels business.
25. It is submitted that the Defendant has spent millions of dollars on promotion and advertisement of its COUNTRY INN & SUITES BY CARLSON brand in USA and internationally. Certified Marketing Funds spent in promoting the COUNTRY INN & SUITES BY CARLSON brand internationally for the period 1989-2008 are filed in these proceedings.
26. Over US $185 million have been spent by Defendant from 1992 to present in advertisement and promotion of the COUNTRY INN & SUITES BY CARLSON brand on a worldwide basis through electronic and print media including newspapers and magazine publications and over the Internet.
27. It is averred that the Defendant owns numerous domain names which incorporate the COUNTRY INN formative including <countryinns.com>;<countryinns-suites.com>; <countryinnhotels.com>; and several country specific and top level domains including <countryinns.cc>; <countryinns.cn>; <countryinn.eu>; CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 9 of 30 <countryinns.at>; <countryinns.be>; <countryinns.co.hu>; <countryinns.nl>; <countryinns.uk.com>; <countryinn.asia>; <countryinns.travel>; <countryinns.mobi> etc. The very first domain registration for the domain <countryinns-suites.com> was obtained on 6th November, 1996.
28. The Defendant also operates the website www.countryinns.com which has been operational since June 1997. The said website prominently features the COUNTRY INNS & SUITES BY CARLSON mark of Defendant.
29. The marks have also been extensively promoted and advertised internationally by the Defendant. As a result, as well as due to the quality of services rendered by the Defendant‟s COUNTRY INN and/or COUNTRY IN & SUITES BY CARLSON hotels, the marks have acquired substantial repute, goodwill and have become well- known both amongst the general public and more so amongst hospitality personnel worldwide.
30. The hotels of the Defendant operate under the COUNTRY INN & SUITES BY CARLSON (word and device) marks and are popularly referred to as COUNTRY INN.
31. It is alleged that the COUNTRY INN & SUITES BY CARLSON hotel chain of the Defendant is an industry leader in the mid-scale hotel segment and is known internationally for its consistently high quality accommodations and personnel and its warm hospitality. All COUNTRY INN & SUITES BY CARLSON hotels worldwide have a typical sloping roof in green or red, front porch, residential CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 10 of 30 architecture and home-like interior design with highlights that include hardwood flooring and lobby fireplace.
32. It is further alleged that the COUNTRY INN & SUITES BY CARLSON brand has achieved great fame worldwide through its quality of service and marketing. Consequently, revenue attributable to the COUNTRY INN & SUITES BY CARLSON brand runs into billions of dollars. From 1992 through to the present, more than US $ 5 billion dollars have been generated at COUNTRY IN & SUITES BY CARLSON properties worldwide with guests having reserved hundreds of millions of stays during the period.
33. The Defendant in support of their submission have filed the following documents along with their list of documents:
i) Copy of Legal Proceeding Certificate for COUNTRY INNS & SUITES BY CARLSON mark in class 42 in India.
ii) Copies of the Registration and Renewal Certificates of the COUNTRY INN BY CARLSON (device) and COUNTRY SUITES BY CARLSON (device) marks in class 16.
iii) Copy of India Directory of the COUNTRY INNS & SUITES BY CARLSON hotels.
iv) Copies of photographs of the COUNTRY INNS & SUITES BY CARLSON hotels in India reflecting typical features.
v) Copies of representative guest room amenities in the COUNTRY INNS & SUITES BY CARLSON hotels in India.
vi) Copies of representative invoices issued to guests who have stayed in the various COUNTRY INNS & SUITES BY CARLSON hotels in India.
vii) Certified revenue figures of operations under the COUNTRY INNS & SUITES BY CARLSON brand in India since 2002.CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 11 of 30
viii) Copies of representative promotional, publicity and sponsorship material relating to the COUNTRY INNS & SUITES BY CARLSON brand in India.
ix) Copies of Articles on COUNTRY INNS & SUITES BY CARLSON brand published in newspapers and magazines in India including CDs containing electronic media coverage.
x) Representative communications received for business tie ups under the COUNTRY INNS & SUITES BY CARLSON brand in India.
xi) Copies of Certified Registration Certificates for the COUNTRY INNS & SUITES BY CARLSON in certain jurisdictions (outside India).
xii) Copy of certified Marketing Funds spent in promoting the COUNTRY INNS & SUITES BY CARLSON brand internationally for the period 1989 - 2008.
xiii) Copies of representative advertising and promotion material relating to COUNTRY INNS & SUITES BY CARLSON hotels (outside India).
xiv) Copy of Membership Rewards Catalogue 2007 of American Express Bank Limited.
xv) Representative „Whois‟ Extracts for the domain names incorporating the COUNTRY INN formative. xvi) Extracts from the website www.countryinns.com. xvii) Representative material relating to media comment on Plaintiff No.1 and COUNTRY INNS & SUITES BY CARLSON hotels (outside India).
xviii). True copy of the redacted version of the Master Franchise Agreement between the Plaintiffs. xix). Copy of invite sent to selected guests for complementary stay at the COUNTRY INNS & SUITES BY CARLSON hotel at Katra.
34. The Defendant has also filed Brochures on the Carlson CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 12 of 30 Group and Locations Directory for the group‟s hotels, copy of the Certificate of Incorporation and other corporate documents of Defendant, copies of photographs of typical features of COUNTRY INNS & SUITES BY CARLSON hotels in USA, copies of Directory of Accommodation for COUNTRY INNS & SUITES BY CARLSON hotels for the years 1989-1992, 1997, 2001, 2005 and 2008, copy of Certified Revenue Summary for the years 1987-2008 attributable to the COUNTRY INNS & SUITES BY CARLSON hotels worldwide and copy of the certified country wise Reservations Data for the years 2001- 2008 for guest reservations attributable to the COUNTRY INNS & SUITES BY CARLSON hotels.
35. From the above said documents filed by the Defendant, it is not in dispute that the Defendant is holding the registration of trademark No.1237378 in Class 42 as a service mark in relation to Hotel and Motel Services, Renting of Accommodation, Providing Recreational Facilities, and Providing Meeting and Conference Facilities. The said registration is granted from 16.9.2003. Earlier to the said registration the Defendant has also got registration in Class 16 under No.637364B as of 18.8.1994 in respect of printed matters such as Stationery, Training Manuals, Advertising and Promotional Material, Newsletters, Cards and Forms.
36. The contention of the learned counsel for the Defendant is that since the Plaintiff‟s business is with respect to similar activities, the case of infringement of trademark is made out. He further submits that under Section 28 of the Trade Marks Act, 1999, the Defendant has also got exclusive and statutory rights which are conferred in favour of the CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 13 of 30 defendant as the business of the plaintiff is same as that of the defendant, thus Plaintiff is guilty of infringement of trademark within the meaning of Section 29 of the Act.
37. Mr. Vivek Dhokalia, learned counsel for the Defendant has not denied the fact that the Defendant has established its business in India at a subsequent point of time than the Plaintiff, but in view of the fact that the Defendant is the prior adopter and user of the mark in question in overseas countries in view of the documents placed on record, the said user is to be accepted on account of its trans-border goodwill and reputation of the mark "COUNTRY INN" as the Defendant has residual goodwill and reputation in the said name and they are world renowned name pertinent to the mark COUNTRY INN. In fact it is the Plaintiff who is passing off its business and services as that of the Defendant and the Plaintiff is also infringing the registered trademark no. 1237378 in Class 42 which belongs to the Defendant. He submits that under no circumstances the Plaintiff is not entitled for an injunction as prayed in I.A. No. 13146/2008. He argues that since the Defendant was about to take action against the Plaintiff, the present suit No. 2264/2008 has been filed by the Plaintiff.
38. The Defendant in order to protect its legal right has filed a separate Suit being Suit No. 1652/2009 along with the interim application i.e. I.A. 11437/2009 under Order XXXIX Rules 1 and 2 read with Section 151 CPC for grant of an injunction against the Plaintiff "COUNTRY INN PVT. LTD." restraining it from using the name/mark "COUNTRY INN" in any manner.
CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 14 of 30
39. Mr. Dalmia learned counsel for the Plaintiff has averred that the Plaintiff is the prior user of the trademark "COUNTRY INN" and despite the registration granted in favour of the Defendants, has got better right of passing off under Section 27(2) of the Act and in support of his submission he has referred to Yash Arora Vs. Tushar Enterprises, 2008 (36) PTC 523 (Del). In this case the Court held as under :
"11..... If prior user, as alleged by the Plaintiff was established, the subsequent registration of trade mark in favor of the Defendants would have paled into insignificance in a passing off action. Suffice it to say that the treatment given by the learned single Judge to the question of prior user does not appear to be satisfactory. It is true that this Court could in the present appeal examine the documents being relied upon by the Plaintiff to find out whether the Plaintiff-appellant had made out a prima facie case for the grant of injunction based on the plea of prior user of the trade mark yet it is not necessary for this Court to embark upon such exercise."
40. He has also referred the case of Cott Beverage Inc., A Georgia Corporation Vs. Silvassa Bottling Company, 2004 (29) PTC 679 (Bom) wherein the Court observed as under :
"27...... The Plaintiffs have also not placed on record a single advertisement published in India on invoice prior to the adoption and use by the Defendant-respondent to show that there is substance of goodwill in this country. There is, thus, in my view, no evidence to show that the goods have achieved trans- border reputation. In my view, principle what was necessary for grant of temporary injunction was; whether the Plaintiffs had made out a prima facie case of use of mark prior to commencement of its use by the CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 15 of 30 Defendant. In my view, the Plaintiffs have not made out a prima facie case to show that in December, 1999 the Plaintiff had established reputation of goods in India. I am of the view that the ratio laid down by this Court in a case reported in the case of Cluett Peabody and Co. Inc. v. Arrow Apparals (supra), is squarely applicable to the facts of the present case."
41. In another case of Smithkline Beecham Plc. And Ors. Vs. Hindustan Lever Limited and Ors., 1999 PTC 775, the Court observed:
"17. The Plaintiffs have also not placed on record any evidence of any use, reputation or goodwill in the „S‟ bend feature of the Plaintiff‟s tooth brush „FLEX‟ even internationally prior to launch in India i.e. in June, 1996. They have not even placed a single advertisement published in India or invoice prior to 1996 to show and indicate that there is subsistence of any goodwill in this country. In absence of any evidence of goodwill or any reputation it cannot be presumed that the Plaintiffs achieved a trans- border reputation prior to the filing of the suit in respect of their tooth brush, no injunction could be granted in favour of the Plaintiff even in respect of OZETTE manufactured and marketed by the Defendants vis-a-vis ACQUAFRESH FLEX. In the case of Whirlpool reported in 1996 PTC 415 there was voluminous evidence produced which were circulated in India for several years and the goods were sold to Embassies and in the context of such evidence this court held that the said product achieved trans-border reputation. No such evidence has been placed in the present case at least prior to 1996 and even whatever evidence has been placed on record after 1996 the same does not establish that the Plaintiffs achieved a trans-border reputation. In order to prove trans-border goodwill and reputation the Plaintiffs have relied upon materials published in the dental journal which admittedly has very restricted CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 16 of 30 circulation. Mere publication of such advertisement and materials in dental journal cannot and would not establish a trans-border reputation. Such reputation, if any, was confined to a particular class of people i.e. the persons subscribing to the said specialized journals and cannot be said to be extended to the general consumers. It could not be shown that any advertisement was made by the Plaintiffs prior to 1996 in any journal or magazine having wide circulation. In absence of same it is not possible to hold that the tooth brush of the Plaintiff acquired any trans-border reputation and goodwill."
42. He argues that in view of settled law, since the Defendant has failed to produce any evidence before this Court in order to show that it has been advertising or using the mark in India prior to 2002, therefore, the Plaintiff is the prior user of the name "COUNTRY INN" which is admittedly is being used since 1993 and therefore, the Plaintiff is entitled to the injunction claimed for.
43. After having gone through the documents placed by the Defendant, it appears that the Defendant has been using the name "COUNTRY INN" with or without the prefix at least from the year 1986 in US and from the year 1990 internationally. There is sufficient material produced on record by the Defendant that in year 1987 the first COUNTRY INN hotel was started on 1.4.1987 in Coon Rapids, Minnesota, USA.
44. In 1990 the Defendant‟s business went international at more than in 40 locations as per the evidence produced by the Defendant. The advertisement of the Defendant also appeared from the year 1990 in leading US industry publication. In the year 1992 the advertising CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 17 of 30 expenditure of the Defendant was US $185 million.
45. The Defendant has obtained the registration mark "COUNTRY INN & SUITES BY CARLSON (word) under No.1237378 in class 42 in India since the year 2003 when under the Trade Mark Act, the registration of service mark was available. In addition, the marks COUNTRY INN BY CARLSON (device) and COUNTRY SUITES BY CARLSON (device) has been registered in class 16 since 1994.
46. From the documents filed by the Defendant it appears that in fact the Defendant is the prior adopter and user of the trademark/name "COUNTRY INN" in overseas countries. The name "COUNTRY INN"
of the Defendant has also appeared in the year 1987 in US which is prior in time. The learned counsel for the Defendant has fairly not denied the fact that as far as India is concerned, the Defendant has admittedly started their operation in 2002.
47. The contention of Mr. Dhokalia learned counsel for the Defendant is that in view of the well-known mark/name coupled with the fact that the same was advertised in various international magazines, the user in subsequent time in India is immaterial as the Defendant is the prior adopter and user of the trademark in overseas countries and as per the settled law the user of overseas countries has to be considered at the time of disposing of the present application.
48. The following judgments were referred by learned counsel for the Defendants :
In Milment Oftho Industries and Ors. Vs. Allergan Inc 2004 PTC 585 (SC), the Supreme Court stated that "the ultimate test CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 18 of 30 should be who is first in the market.....The mere fact that the respondents have not been using the mark in India would be irrelevant if they were first in the world market". Para 10 of the judgment reads as under:
"10. In the present case, the marks are the same. They are in respect of pharmaceutical products. The mere fact that the Respondents have not been using the mark in India would be irrelevant if they were first in the world market. The Division Bench had relied upon material which prima-facie shows that the Respondents product was advertised before the Appellants entered the field. On the basis of that material the Division Bench has concluded that the Respondents were first to adopt the mark. If that be so then no fault can be found with the conclusion drawn by the Division Bench."
In another case Austin Nichols & Co. & Anr. Vs. Arvind Behl & Anr. reported in 2006 (32) PTC 133 (Del.) in relevant paras 41 and 47 of the judgment at page Nos. 146 and 149 of the judgment given by Madan B. Lokur, J., this Court observed as under:
"41.....
„Blenders Pride‟ whisky manufactured by the Plaintiffs had a worldwide reputation, being available for sale in a large number of countries since 1973 onwards. It cannot be said that the product was unknown in India. The predecessor in interest of the Plaintiffs had an intention of directly exploiting the Indian market. In fact, they had applied for permission from the Government of India to manufacture „Blenders Pride‟ whisky, which was granted, and they have been manufacturing „Blenders Pride‟ whisky in India since 1995.
47. In view of the above decisions and because of the huge advances made in information and communication technology over the years, I think it is too late for the CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 19 of 30 Defendants to seriously urge that the regular sale of a product in one or more foreign countries would be unknown to persons living in India. I would, therefore, hold that the Plaintiffs having come out with „Blenders Pride‟ whisky first in the international market were first past the post; even though the Defendants were the first do so in India. The fact that the product of the Plaintiffs was not manufactured or sold in India from 1973 (when it first entered the market) till 1995 when it became freely available in India, is of no consequence."
In Jolen Inc. Vs. Doctor and Company, (2002) PTC 29 (Del), the Court recognized the principle of repute outside the country of origin in the following observation :
"21. It is not necessary that the association of the plaintiff's mark with his goods should be known in the countries other than its origin or to every person in the area where it is known best. Mere advertisement in other countries is sufficient if the trademark has established its reputation and goodwill in the country of its origin and countries where it is registered.
22. In modern world, advertisements in the newspapers travel beyond the country where party is engaged in business through overseas editions or otherwise. Even if it is assumed that such advertisements or mark do not travel beyond the borders of the countries where the plaintiff has the business still it has a right to protect its reputation and goodwill. It is more so where the trade name has been pirated in totality and not by way of having deceptive or confusing similarity. We are living in a world where there is enormous mobility. Well travelled Indians and tourists cannot remain unaware of international commodities. Reputation always travels faster than men. Whenever persons traveling abroad for business or pleasure or any other purpose viz. study or temporary postings come across an CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 20 of 30 article of a trade name of international reputation they are bound to be confused as to the source and quality if they happen to see that commodity in their country where there is no physical market. Mere likelihood of confusion is sufficient."
49. Mr. Dhokalia has argued that no explanation at all has been given by the Plaintiff as to how it came to adopt the „Country Inn‟ mark. This is required in cases such the present as held in the case of Revlon Inc. and Ors. Vs. Sarita Manufacturing Co., 1997 PTC 394:
"28. No satisfactory explanation has been given by the defendants as to how they came to adopt the trade marks which are registered in the name of the plaintiffs. Word "Revlon"
does not appear in the dictionary. It cannot be a mere co-incidence that the defendants had adopted the same mark for their products which was registered in the name of the plaintiffs and which have a world wide market.
In my view, the adoption of marks registered in the name of the plaintiffs by the defendants for their products cannot be considered honest and in such a case even the plea of delay and laches, in my opinion, would be of no avail to the defendants. In case, the defendants had chosen to continue to use the trade marks registered in the name of the plaintiffs, inspire of plaintiffs' objection, they, in my view, had been doing so at their own risk and they cannot derive any advantage from such user.
From the record, I find that the defendants firm had been describing itself as importers and exporters of Region perfumes. It is not even the case of the defendants that they had at any time imported' these perfumes."
Infringement of Trademark
50. To decide the question as to whether the Registered- Proprietor‟s right to a trademark has been infringed in the particular case, the approach must not be the same as that in an action of passing CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 21 of 30 off of goods of the Defendant as and for those of Plaintiff. The action for infringement is a statutory remedy. It is dependent upon the validity of the registration. Both Sections 28 and 29 of the Trademark Act, 1999 provide that the registered proprietor of a mark has exclusive and statutory rights to use the trademark in relation to the goods or services in respect of which the trademark is registered and to obtain relief in respect of infringement thereof.
51. In the present case admittedly, the Defendant is the registered proprietor of the trademark "COUNTRY INN & SUITES BY CARLSON under no.1237378 in Class 42 as well as in Class 16. There is no registration in favour of the Plaintiff in Class 42, the Plaintiff has registration of Class 29, 30, 32 and 33 which are in different Class of goods other than the business carried on by the Plaintiff. The Defendant has obtained the registrations in India after the year 2003 in Class-42 and the earlier registration in Class 16 in the year 1993, but by that time, the Plaintiff had already incorporated its company name "COUNTRY INN PVT. LTD.". Though prima facie the adoption of mark by the Plaintiff does not appear to be bona fide but, in view of use of the name of the Plaintiff "COUNTRY INN" in the year 1993, the contention of the Defendant for infringement of the trade mark cannot be accepted in light of the provision of section 34 of the Act.
52. As regards the question of passing off action is concerned, as held earlier, admittedly the Defendants are the prior adopter and user of the mark COUNTRY INN in overseas countries. The said user in these countries has to be taken into consideration in this country as per settled CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 22 of 30 law.
53. It is settled law that a party can protect his goodwill in the name of his hotel even he does carry on the hotel business within the jurisdiction provided his business has some reputation in the country.
Before coming to any conclusion in this regard, let me discuss the law wherein, the courts have, no doubt, considered the prayer of interim order in the cases where the similar question had arisen.
54. In Sheraton Corporation of America Vs. Sheraton Motels, (1964) RPC 202 the Plaintiffs were the owners of a chain of hotels called "Sheraton Hotels" in America and other foreign countries. They had no hotel in the United Kingdom ("U.K. for brevity") but bookings in their hotels abroad were made in U.K. through their own office in London and through travel agencies. The Defendants proposed to construct a hotel at Prestwick Airport. They contended that they derived the name "Sheraton Motels Ld" from their offices at No. 1 Sheraton Street, London. It was shown that this address did not exist as the building was destroyed during the war. There was evidence of confusion. Interlocutory injunction was granted to restrain the Defendants from advertising in a way calculated to suggest association with the Plaintiffs.
55. In Berkeley Hotel Vs. Berkeley International (Mayfair), (1972) RPC 237, the plaintiffs were owners of a hotel under the name "Berkeley Hotel" at Berkeley Street, London, which had acquired reputation with clientele from all over the world. They sold the hotel CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 23 of 30 without the goodwill attached to it in 1968 which was demolished in 1969. They were to open a new hotel under the old name "Berkeley Hotel" in Knightsbridge in 1971. The Defendants built a new hotel at the Plaintiffs‟ old site and proposed to open it in 1972 under the name "Berkeley International". Interlocutory injunction was granted although it was admitted that the Defendants had no intention to deceive. There was evidence on each side as to the circumstances in which confusion might arise.
56. In Rainforest Cafe, Inc. Vs. Rain Forest Café, 2001 PTC 353 (Del) by Vikramajit Sen J. the plaintiff had registered the name "Rain forest Cafe" and logo in a number of countries other than India in respect of restaurant services and used the same extensively in many foreign countries, though not in India and has acquired world wide reputation. Defendant opened a restaurant under the name "Rain Forest Cafe". He had copied the name logo and the slogan "A wild place to eat" used by the Plaintiff. Defendants explanation for adoption of the name was held to be unsatisfactory and the interim injunction was granted.
57. In Taco Bell Corporation Vs. Taco Bell, 2000 PTC 554 (Bom) the plaintiffs were the owners of a chain of restaurants under the name "TACO BELL" in many countries having trans-border reputation in India. Defendants, who originally were running their restaurants under the name "Dunhill Fast Food" later changed over to the name TACO BELL. Affidavits from three persons who stated that they thought that the Defendants business was a branch of the Plaintiff were CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 24 of 30 admitted as evidence and interim injunction was granted.
58. In Westin Hospitality Services Ltd. Vs. Caesar Park Hotels & Resorts Inc., 1998 IPLR 189 (Mad.) the Plaintiff used WESTIN as a service mark in relation to its hotel business in a number of countries except India. Westin formed part of the corporate name of their subsidiary which was doing similar business. The Defendants were carrying on the business of consultancy services for hotel and resorts and for providing an automatic Hotel reservation system since 1989. Interim injunction refused as the materials produced by the Plaintiffs were far from sufficient to make out a prima facie case that goodwill had been established in India for the mark "Westin" in relation to hotels and hospitality service. On appeal to the Supreme Court the interim order passed by High Court was modified by which the Defendants were permitted to use the word WESTINN as part of their corporate name with the rider that in the letter heads and advertisements the words "No connection whatsoever with Westin Hotels & Resorts" shall be added.
59. In Lyons Vs. G&K Restaurants (1955), 72 RPC 259 the plaintiffs were the owners of a restaurant under the style "Egg and Bacon". They had also registered a trade mark consisting of the device of an egg and the head of a pig. Defendant started a restaurant in a neighbouring street under the name "Egg and Bacon Broadway Restaurant". They printed on their menu the device of an egg and a pig‟s head. In an action for infringement and passing off the Defendant offered to submit to an injunction regarding infringement and to change the name to "Eggs and Bacon". It was held that this would sufficiently CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 25 of 30 protect the Plaintiffs.
60. Further, the plaintiff in its suit has specifically made admission about the similarity of the mark COUNTRY INN as well as confusion and deception in trade. Therefore, no doubt, the case of passing off has been prima facie made out by the Defendant against the Plaintiff in view of the cases referred by the Defendant i.e. Milment, Blender pride and Jolen Inc. supra. Further on the question of trans- border reputation in the country, the Division Bench of this Court has been dealt with in the case of N.R. Dongre and Ors. Vs. Whirlpool Corporation and Ors., AIR 1995 Delhi 300, the Court observed :
"14. The knowledge and awareness of a trade mark in respect of the goods of a trader is not necessarily restricted only to the people of the country where such goods arc freely available but the knowledge & awareness of the same reaches even the shores of those countries where the goods have not been marketed. When a product is launched and hits the market in one country, the cognizance of the same is also taken by the people in other countries almost at the same time by getting acquainted with it through advertisements in newspapers, magazines, television, video films, cinema etc. even though there may not be availability of the product in those countries because of import restrictions or other factors. In today's world it cannot he said that a product and the trade mark under which it is sold abroad, does not have a reputation or goodwill in countries where it is not available. The knowledge and awareness of it and its critical evaluation & appraisal travels beyond the confines of the geographical area in which it is sold. This has been made possible by development of communication systems which transmit & disseminate the information as soon as it is sent or beamed from one place to another.CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 26 of 30
Satellite Television is a major contributor of the information explosion. 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."
61. In view of the aforesaid reasons, it is clear that the Plaintiff has failed to make out any case for grant of injunction against the Defendant, in view of the earlier adoption and user of the mark in question as well as decision referred in earlier paras of my order, thus Plaintiff‟s application for injunction against the Defendant being IA No.13146/2008 is dismissed.
62. Now the question before this Court is as to whether the Defendant is entitled for an injunction as sought in the Interim Application against the Plaintiff.
63. Though in the present case, no explanation at all has been given by the plaintiff as to how it came to adopt the mark "COUNTRY INN", but, the fact of the matter is that the Plaintiff has been carrying on business of hotels, motels and restaurants since the year 1993 and there are documents filed by the plaintiff as referred in para 13 of my judgment about the said user, hence, it appears that there is a delay of more than 16 years for bringing the action by the defendant against the plaintiff.
64. It is settled law that the grant of injunction is a discretionary relief. The exercise thereof is subject to the Court satisfying that: CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 27 of 30
(1) there is a serious disputed question to be tried in the suit and that an act, on the facts before the court, there is probability of his being entitled to the relief asked for by the plaintiff/defendant.
(2) The court‟s interference is necessary to protect the party from the species of injury. In other words, irreparable injury or damage would ensue before the legal right would be established at trial; and (3) That the comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction will be greater than that would be likely to arise from granting it.
65. In the case of Gujarat Bottling Co. Ltd. and Ors. Vs. Coca Cola Co. and Ors., AIR 1995 SC 2372, the court observed:
"46. ...The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection has, however, to 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. See: Wander Ltd. and Anr. v. Antox India P. Ltd.
MANU/SC/0595/1990. In order to protect the defendant while granting an interlocutory injunction in his favour the Court can require the plaintiff to furnish an under taking so that the defendant can be adequately compensated if the uncertainty were resolved in his favour at the trail."
66. For the aforesaid reasons and after considering the matter in totality, this Court is of the considered view that at this stage no interim CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 28 of 30 order against the Plaintiff can be passed as the Plaintiff would suffer irreparable loss and injury in case the business of the Plaintiff which is 17 years old is stopped. Therefore, the defendant‟s interim application is disposed of with the following directions:
i) The Plaintiff shall maintain true accounts of its business under the name COUNTRY INN and shall file the statement every half yearly before this Court. The first statement shall be filed within four weeks from today by giving the statement of turnover for the last six months and the Plaintiff shall continue to file the same without any failure;
ii) The Plaintiff is directed not to enter into any
agreement with a new franchisee or from
issuing fresh license allowed using the
mark/name COUNTRY INN during the
pendency of the suit;
iii) If any advertisement is issued in future bearing the name COUNTRY INN by the Plaintiff in any newspaper or in/through any other medium, the Plaintiff will put the disclaimer that it has no connection with the Defendants.
67. For the above mentioned directions, the application of the Defendant being IA No.11437/2009 is disposed of. CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 29 of 30
68. It is needless to say that the prima facie view taken by me in the present case and any observations made herein shall be treated as tentative in nature and shall not constitute any expression of final opinion on the issues involved in the matter and shall have no bearing on the final outcome of the case.
IA No.15398/2009
69. Both the parties are agreeable that since the documents and parties are common in the matters, the same may be consolidated accordingly. As agreed, I.A. No.15398/2009 filed by the Plaintiff is allowed. Issues would be framed in suit No.2264/2008 and the evidence of the parties shall also be recorded in this suit only. CS(OS) No. 2264/2008 & CS(OS) No. 1652/2009
70. List before the Joint Registrar for further directions on 5th April, 2010.
MANMOHAN SINGH, J.
FEBRUARY 11, 2010 jk CS (OS) No.2264/2008 & CS(OS) No.1652/2009 Page 30 of 30