Karnataka High Court
Soore Detergents, By Proprietor vs D. Mohanraj And Anr. on 30 July, 2004
Equivalent citations: ILR2004KAR4325, 2004 AIR - KANT. H. C. R. 2771, (2004) 4 ICC 755, (2005) 1 CIVLJ 598, (2004) 6 KANT LJ 435
Author: V.G. Sabhahit
Bench: V.G. Sabhahit
ORDER 39 RULE 1 AND 2 - LAW OF TORTS - 'Passing off - Meaning of - HELD - 'passing off is an action in Tort - The tort of 'passing off is regarded as an action for deceit - It involves a misrepresentation made by a trader to his prospective customers calculated to injure as a reasonably foreseeable consequence the business of goodwill of another which actually or probably cause damages to the Business or Goods of other trader - An action for 'passing off' as the phrase itself suggests is to refrain the defendants from passing off its goods or services to the public as that of the plaintiffs. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public. (B) CIVIL PROCEDURE CODE - ORDER 39, RULE 1 & 2 - Inter locutory application for injunction in passing off action, under - HELD - in an action for passing of , it is usual and essential to seek an order of injunction -The plaintiff must prove a prima facie case, availability of balance of convenience in his favour and irreparable injury caused to him - Having regard to the over all similarities both Etymologically and phonologically it is clear that the essential feature and characteristic of the plaintiff's trade mark 'Sundari' has been made use of by the defendant in the wrapper produced by him used for marketing the detergent cake - Hence plaintiff has made out a prima facie case for passing off the detergent cake by the first defendant under the trade name of the plaintiff and the balance of convenience is also in favour of the plaintiff and the plaintiff would be put to irreparable loss which cannot be compensated if plaintiff succeeds in the suit; So the plaintiff is entitled to an order of injunction. Held: The defendants do not dispute that plaintiff has been marketing detergent cake under trade name 'SUNDARI' since 8.3.2003 and there is no material on record to show that defendants had commenced sale of detergent cake prior to 4.1.2004 in the trade name of 'SOUNDARI' or 'SOUNTHARI' hence the material an record also shows that prima facie as the plaintiff's husband and after assignment his wife the plaintiff were successful in marketing and earning reputation and goodwill the defendants were attracted to market detergent cake under the trade name deceptively similar and likely to confuse the prospective customers and to indulge in passing off. The very conduct of the first defendant would prima facie show that he is trying to do indirectly what he is not allowed to do directly in view of the contents of the agreement dated 8.3.2003 as he is not permitted to sell the detergent cake in the name of 'SUNDARI' as it is exclusive right given to the husband of the plaintiff to sell the detergent cake under the name of 'SUNDARI' in Karnataka State and wherefore what was required to be decided by the Trial Court was as to whether there is deceptive similarity and confusion was caused in the mind of the customers and as to whether the prima fade case of passing off the detergent cake marketed by the defendant in the name of the plaintiff had been made out. It is clear from the perusal of the order passed by the Trial Court that the Trial Court has compared the trade names 'SUNDARI' with 'SOUNDARI' and 'SOUNTHARI' as it is the case of the first defendant to find out the dissimilarities between the two Wrappers of the detergent cake produced before the Court and has found out certain distinct dissimilarities between the two wrappers by comparing the label on a careful comparison two wrappers and the Trial Court apart from stating that there is striking dissimilarities between the two wrappers referred to, the Trial Court has not considered as to whether the two trade names under which the detergent cake has been marketed viz., 'SUNDARI' and 'SOUNTHARI' is similar and would cause confusion in the mind of the customers in detergent cakes, The Trial Court has done what ought not to be done and what is required to be done by the Trial Court was to consider as to whether there was deception and not whether striking dissimilarity between the two wrappers produced before the Court and wherefore the order passed by the Trial Court is contrary to the settled principles referred to above and wherefore arbitrary and capricious. (C) CIVIL PROCEDURE CODE, 1908 - ORDER 39 RULES 1 & 2 - Passing off action - Plaintiff passing of his soaps and detergents - Passing off detergent goods bearing the label mark "SUNDARI" plaintiffs label "SUNDARI" infringed by printing the label of the defendant as "SOUNDARI" and "SOUNTHARI". Wrapper used and colour and design of the Wrapper similar in size as that of the plaintiff - HELD - Phonetically also both the names 'SOUNDARI' and 'SOUNTHARI' sounds similar to 'SUNDARI' and further, having regard to the design, layout, getup, colour scheme, size there is every possibility of confusion when looked at the point of view of an unwary purchaser with imperfect recollection that if the detergent cake wrapped in the wrapper produced by the defendants is handed over to the customer, he is likely to mistake the same as the detergent cake marketed by the plaintiff as the similarities in the design, layout, getup, feature and essential characteristic would put the customer who are common namely, purchasers of detergent cake most of whom may not be literate and not acquainted with their own mother tongue would be confused, and there is possibility of every confusion that on seeing the mark of the defendant, the customer would think that it is the same article which he had brought earlier but is doubtful as to whether that impression is not due to imperfect recollection and there is also every likelihood that the customer would accept the detergent cake marketed by defendant No. 1 as that of the plaintiff and having regard to the fact that both the first defendant and the plaintiff are marketing the same detergent cake manufactured with the same technology and quality, there is every likelihood that an unwary purchaser would be confused by the detergent that is marketed by the first defendant as that of the plaintiff and wherefore it is clear that the wrapper that is used by the defendants by marketing the detergent cake in Karnataka makes out prima facie case of passing off detergent cake manufactured by him with the trade name deceptively similar to the trade name of the plaintiff though he is not directly permitted to market the said detergent cake as he is not permitted to market the detergent cake under the name of 'SUNDARI' pursuant to the admittedly binding agreement dated 8.3.2003. Setting aside the order of the Trial Court rejecting the I.A. filed under Order 39 Rule 1 & 2, the Court, JUDGMENT V.G. Sabhahit, J.
1. These three appeals by the plaintiff in O.S.No.1259/2004 on the file of the VIII Addl. City Civil Judge, Bangalore, are directed against the order dated 27.5.2004 wherein I.As.I to III filed by the plaintiff under Order 39 Rules 1 and 2 CPC., wherein ad-interim order of Injunction granted has been vacated.
2. The facts of the case in brief leading up to these appeals with reference to the rank of the parties before the Trial Court are as follows:
The plaintiff filed a suit O.S.1259/2004 against the defendants seeking for permanent injunction restraining the defendants by themselves, their partners, manufacturers, servants, licensees, agents, printers, carriers and distributors or any one claiming under them from in any manner:
a) committing 'passing off' their detergents goods bearing the label mark "SOUNDARI" as and for or being connected with the business of plaintiff by using deceptive similar mark in any modified form or by using the colour scheme or get up.
b) committing 'infringement of copyright' in the artistic work of plaintiff's label "SUNDARI" by distributing printing or cause to be printed the impugned label of the defendants "SOUNDARI".
c) from marketing and selling detergent goods under any deceptively similar name to that of "SUNDARI" in the State of Karnataka either directly or indirectly by violating the terms and conditions of the settlement Deed dated 8.3.2003 entered between the plaintiff's husband and first defendant;
d) directing the defendants to surrender to the plaintiff all the unused labels, wrappers and other printed matters containing or consisting of the offending mark together with blocks used for the purpose of printing the same for destruction and costs.
3. In the said suit, the plaintiff filed I.As.I to III under Order 39 Rules I and 2 CPC., seeking for an order of temporary injunction against the defendants in terms of the final relief sought far as per clauses (a)(b) and (c) referred to above. An order of exparte temporary injunction was granted on 25.2.2004. After the appearance the defendants filed objections to the applications with the counter affidavit of the defendants and the Trial Court by its order dated 27.5.2004 vacated the ad-interim injunction granted on 25.2.2004 and being aggrieved by the said Common order on I.As.I to III the plaintiff is before this Court in this appeal.
4. I have heard the learned Senior Counsel appearing for the plaintiff-appellant and the learned Senior Counsel appearing for the defendants-respondents and scrutinised the material on record.
5. It is clear from the material on record that the plaintiff filed I.As.I to III for the above said reliefs of temporary Injunction under Order 39 Rules I and 2 .CPC, along with the affidavit of the Power of Attorney Holder of the plaintiff averring that the plaintiff is a proprietorship firm carrying on the business of manufacture and sale of detergent soaps and detergent powder under the labelmark "SUNDARI". Originally the label mark "SUNDARI". was being used by the plaintiff's husband viz., D. Suyaraj along with his brother D. Mohanraj, who is first defendant herein under the name and style of `Lakshmi Industries" at No. 138, Sundakkamuthur Road, Coimbatore-641 026. Subsequently there were several changes in the constitution of the firm 'Lakshmi Industries'. Finally, a settlement was effected on 8.3.1993 between the plaintiffs husband D. Suyaraj and the first defendant D. Mohanraj with regard to the continuous and simultaneous use of the label mark "SUNDARI" by both of them. Accordingly the plaintiff's husband D. Suyaraj is entitled to use the label mark "SUNDARI" in 17 Districts of the State of Tamilnadu including the entire State of Karnataka. The first defendant is entitled to use the label mark "SUNDARI" in the State of Tamilnadu including the entire State of Andhra Pradesh. Thereby the first defendant is not entitled to market the detergent cakes and powder under the label mark "SUNDARI" in the State of Karnataka by virtue of settlement deed dated 8.3.2003. It is also averred that after effecting the said Settlement Deed, the plaintiff's husband assigned his rights over the label mark to the plaintiff under one Assignment Deed dated 30.10.2003 from which date the plaintiff is using the label mark "SUNDARI" and used to sell the detergent goods in the 17 Districts of Tamilnadu and in the state of Karnataka. The plaintiff has got exclusive rights to use and sell the detergent goods bearing the label "SUNDARI" by virtue of the said Assignment deed dated 30.10.2003. Thereby the plaintiff claim use of the said label mark from the date of predecessor-in-title i.e. from the year of 1986. The plaintiff has also gained reputation and goodwill attached to the label mark "SUNDARI" during the last 16 years by selling the detergent goods in the State of Karnataka. The plaintiff has appointed sole selling agents for their goods "SUNDARI" in Karnataka State also.
6. It is further averred that while so, knowing the popularity and demand made by the plaintiff's label mark "SUNDARI" in the State of Karnataka, it is found that the first defendant is indulged in manufacturing and marketing the detergent cakes under the label "SUNDARI" in the State of Karnataka either directly or Indirectly inspite of the fact that he is not empowered to do so as per the Settlement Deed dated 8.3.2003. It has been brought to the notice of the plaintiff that the first defendant has made an advertisement in the Kannada newspaper viz., "VIJAY KARNATAKA" dated 4.1.2004 by soliciting the trade enquiries for marketing detergent soaps under one deceptively similar label mark "SUNDARI". Therefore, the first defendant is making efforts to sell the detergents cakes in the name of "SUNDARI" which is identical with and deceptively similar to the plaintiff's label "SUNDARI". The letters in Kannada language for both the names "SUNDARI" and "SOUNDARI" are almost similar. Since the first defendant could not market the detergent cakes under the label mark "SUNDARI" directly in the State of Karnataka he is trying to sell the detergent goods through the second defendant indirectly under the deceptively similar label mark "SOUNDARI". Further it seems from the said advertisement, the first defendant claims rights over the deceptive label "SOUNDARI" by filing trademark application. But it is well settled principle of law that mere filing of trademark application will not confer any rights of the applicant.
7. It is further averred that the defendants label mark "SOUNDARI" is the substantial reproduction of the plaintiff's artistic work in her label mark "SUNDARI" with respect to the colour scheme distribution of letters and size of the letters except the letter "O". Hence the defendants have conspired to injure the business of the plaintiff by selling the detergent goods under the deceptively similar label "SOUNDARI". The conduct of the defendants amount to infringement of plaintiffs copyright in the artistic work of the label mark "SUNDARI" and it also amounts to passing off as the label mark "SUNDARI" as like that of plaintiff's label "SUNDARI" in the State of Karnataka the conduct of the defendants amount to fraud on the plaintiff as well as consumer public. The near total similarity of the defendants spurious label trademark "SOUNDARI" cannot be a mere coincidences. It is a deliberate attempt on the part of the defendants to 'pass off' their goods as the goods of plaintiff. It shows commercial dishonesty on the part of the defendants and thereby the defendants have passed off their goods "SOUNDARI" as like that of plaintiff's "SUNDARI". Hence the adoption of deceptively similar label "SOUNDARI" by the first defendant is not honest but mollified one as far as selling of detergent goods in the State of Karnataka is concerned by totally violating the spirit of settlement deed dated 83.2003. It is also averred that the defendants are trying to sell their detergent soaps in Karnataka State with the label "SOUNDARI" which is identical and deceptively similar with that of the plaintiff's label "SUNDARI" and is likely to deceive or cause confusion or injury to goodwill of plaintiff's business. The general public are likely to be deceived by the defendants' use of the label mark "SOUNDARI". The plaintiff has a prima facie case. The balance of convenience lies in its favour. If the interim order as prayed is not granted the plaintiff will be put to greater hardship and cause irreparable loss. On the other hand no hardship is going to cause defendants.
8. The affidavit filed in support of all the three applications are common. The defendants filed a common counter by way of objections to the applications I.As.I to III and it is averred that the plaintiff has filed the above case seeking various reliefs of injunction on the ground that the defendant has infringed the copyright of the plaintiff and that the defendant is passing of the product of the plaintiff. It is submitted that the above suit is without basis and requires to be rejected in limie. He also contended that the plaintiff has filed three I.As., I.A.I is for injunction to restrain the defendants from passing of their detergent goods bearing label mark 'Soundari' or any other deceptively similar mark I.A.II is for an injunction to restrain the defendants from infringing the copyright of the plaintiff in the label I.A.III is for an injunction to the defendants from either directly or Indirectly violating the Settlement Agreement dated 8.3.2003 and submitted that the affidavits in support of all three applications are identical in nature and hence all the applications are replied to by a common counter affidavit. He further submitted that the only parties to the Settlement Deed are the plaintiff's husband and defendant No. 1. The only person who can claim performance of the said Agreement is the plaintiff's husband. As no right has been assigned in favour or the plaintiff, the question of seeking an injunction in the form in which it has been sought in I.A.III does not arise and the plaintiff cannot make any valid claim for infringement of copyright or for passing off as the suit is misconceived and requires to be rejected at the threshold. He further alleged that in the absence of any visual or phonetic similarity, the defendants are now prevented from continuing their business as a result, great losses are being suffered by the defendants and the plaintiff has not even disclosed any shred of evidence to demonstrate any goodwill or sales in the market and he cannot seek any relief at the hands of this Hon'ble Court without even satisfying the minimum requirements of passing off and hence the reliefs claimed cannot be granted. He has also submitted that the defendants have demonstrated the market share that it possesses and the sales that it has made over the months and the plaintiff has no such market share nor have they done any sales. In that view of the matter, the plaintiff cannot be seen to claim any right of passing off or infringement and as the defendants have already suffered irreparable loss owing to the exparte injunction order which the plaintiffs are using inappropriately, the plaintiff will suffer no harm as there is no market for its products, nor are there any sales that it has done and wherefore it is submitted by him that the said order of injunction is continuing to cause irreparable harm and injustice and the defendant will be put to grave prejudice if the same is continued.
9. The plaintiff has produced eight documents along with the plaint comprising of Power of Attorney, Assignment Deed dated 31.10.2003, defendants advertisement in the newspaper dated 4.1.2004 and application of the plaintiffs for registration of trademark dated 5.11.2003 and the defendants have produced documents comprising of deed of assignment dated 15.4.1993, partnership deed dated 5.4.1995 wrappers used by the defendant to market detergent cake wrappers used indicating colour of soap assignment deed dated 30.10.2003, invoices, as per D1 to D7 referred to in the written statement.
10. The learned Senior Counsel for the appellant Sri Udaya Holla submitted that order passed by the Trial Court rejecting application for temporary injunction is capricious and arbitrary and the Trial Court has proceeded to compare the two wrappers side by side which it was not expected to do and has merely held that there is dissimilarity and there is no likelihood of confusion and no finding has been be recorded as to deceptiveness and confusion. The learned Senior Counsel further submitted that the first defendant who cannot market the detergent cake under the name "SUNDARI" in Karnataka as per the agreement is indirectly trying to market the cake by passing off the detergent cake as that of the plaintiff under the deceptive trade mark "SOUNDARI" and "SOUNTHARI" which is etymologically and phonetically similar and the learned Counsel submitted that the order passed by the Trial Court is contrary to the settled principles laid down by the Supreme Court and that the plaintiff is entitled to temporary injunction as sought for in the suit. He has relied upon the following decisions in support of his contentions:
1. AMRITDHARA PHARMACY v. SATYA DEO,
2. BANIK RUBBER INDUSTRIES v. K.B. RUBBER INDUSTRIES, 2. 1990 PTC 58 (CALCUTTA)
3. MANGALORE R.K. BEEDIES v. MOHAMMED HANEEF, 1993(3) KLJ 37(DB)
4. GOEL POCKET BOOKS v. RAJA POCKET BOOKS, 1997 PTC (17) (DELHI)
5. BENGAL WATERPROOF LTD., v. BOMBAY WATERPROOF Co., 1997 PTC (17) (SC)
6. AMAR SUITINGS LTD., v. AMAR SUNTEX PRIVATE LIMITED, 2000 PTC 77 (P&H)
7. CADILA HEALTH CARE LTD., v. CADILA PHARMACEUTICALS LTD., 2001 AIR SCW 1411
8. LAKSHMIKANT V. PATEL v. CHETAN BHAT SHAH,
9. SATYAM INFOWAY PVT. LTD. v. SIFYNET SOLUTIONS PVT.LTD., 2004 AIR SCW 3409
10. BROOKE BOND INDIA LTD. v. ROYAL PRODUCT, 1981(2) KLJ 92
11. Per contra, the learned Senior Counsel appearing for the respondents-defendants Sri K.G. Raghavan submitted that there is no material to prima facie show that the defendant is passing off the detergent cake as that of the plaintiff. The learned Counsel submitted that there is no material to show the reputation and the goodwill earned by the plaintiff by marketing the detergent cake and in passing off action when the defendant is successful in showing that the trade name under which he is marketing the product is dissimilar, he is entitled to succeed as it is not a case for infringement and the learned Counsel further submitted that the order passed by the Trial Court indicating the dissimilarities between the two trade names used by the defendants and the plaintiff would clearly show that there is no deception and there would not be any confusion in the mind of the customers who would be the purchasers of the detergent cakes and no case of passing off is made out as rightly held by the Trial Court. The learned Counsel also submitted that the order passed by the Trial Court cannot be said to be arbitrary or perverse as to call for interference in these appeals and appeals are liable to be dismissed. In support of his contentions, he has relied upon the following decisions:
1. WANDER LTD., v. ANTOX INDIA PVT.LTD., 1990 (SUPP) SCC 727
2. COLGATE PALMOLIVE (INDIA) LTD., v. V. HINDUSTAN LEVER,
3. UNIPLY INDUSTRIES LTD., v. UNICORM PLYWOOD LTD.,
4. MAHENDRA & MAHENDRA PAPER MILLS v. MAHINDRA AND MAHINDRA LTD.,
5. GUJARAT BOTTLING CO., LTD., v. COCACOLA CO. AIR 1995 SC 2373
6. BESCO ENTERPRISES v. PRADHAN PERFUMES, ILR 2002 KAR. 235
12. Having regard to the contentions urged, the points that arise for determination in these appeals are:
1) Whether the order passed by the Trial Court dated 27.5.2004 dismissing I.As.1 to 3 filed under Order 39 Rules 1 and 2 of CPC., calls for interference in these appeals?
2) What order? and I answer the above points as follows:
POINT NO. 1: Partly in the affirmative. The order passed by the Trial Court is capricious and arbitrary in so far as it relates to rejection of I .A.I. POINT NO. 2: As per the final order for the following reasons:
13. I have given anxious consideration to the contentions of learned Senior Counsel for the parties, scrutinised the material on record and perused the decisions relied upon by both the Counsel. In view of the principles laid down in the decisions relied upon by the learned Counsel appearing the parties it is well settled that 'passing off' is an action in tort. The tort of passing off is regarded as an action for deceit. It 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 goods of other trader. An action for 'passing off' as the phrase itself suggests is to refrain the defendants from passing off its goods or services to the public as that of the plaintiffs. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public. The defendant must have sold its goods in a manner which has deceived or likely to deceive the public in to thinking that the defendants goods are the plaintiffs. (Satyam Infoway Ltd v. Sifynet Solutions Pvt. Ltd., 2004 AIR SCW 3403). The development of law of passing off, the gist of the action, requirement of proof and consideration of interlocutory applications for injunction in passing off action has been succinctly laid down by the Supreme Court in Lakshmikant V. Patel v. Chetanbhat Shan as follows:
"10.A person may sell his goods or deliver his services as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by Courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are and ought to be the basic policies in the work of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it result in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury.
11. Salmond & Heuston in Law of Torts call this form of injury as 'injurious falsehood' and observe the same having been awkwardly termed as passing off and state:-
"the legal and economic basis of this tort is to provide protection for the right of property which exists not in a particular name, mark or style but in an established business, commercial or professional reputation or goodwill. So to sell merchandise or carry on business under such a name, mark, description or otherwise in such a manner as to mislead the public into believing that the merchandise or business is that of another person is a wrong actionable at the suit of that other person. This form of Injury is commonly, though awkwardly, termed that of passing off one's goods or business as the goods or business of another and is he most falsehood. The gist of the conception of passing off is that the goods are in effect telling a falsehood about themselves, are saying something about themselves which is calculated to mislead. The law on this matter is designed to protect traders against that form of unfair competition which consists in acquiring for oneself, by means of false or misleading devices, the benefit of the reputation already achieved by rival traders.
12. In Oertil v. Bowman (1957) RPC 388, the gist of passing off action was defined by stating that it was essential to the success of any claim to passing off based on the use of given mark or get up that the plaintiff should be able to show that the disputed mark or get up has become by user in the country distinctive of the plaintiffs goods so that the use in relation to any goods of the kind dealt in by the plaintiff of that mark or get up will be understood by the trade and the public in that country as meaning that the goods are the plaintiff's goods. It is in the nature of acquisition of a quasi-proprietary right to the exclusive use of the mark or get up in relation to goods of that kind because of the plaintiff having used or made it known that the mark or get up has relation to his goods. Such right is invaded by anyone using the same or some deceptively similar mark, get up or name in relation to goods not of plaintiff. The three elements of passing off action are the reputation of goods, possibility of deception and likelihood of damages to the plaintiff. In our opinion, the same principle, which applies to trade mark, is applicable to trade name.
13. In an action for passing off it is usual, rather essential to seek an injunction temporary or ad-interim. The principles for the grant of such injunction are the same as in the case of any other action against injury complained of. The plaintiff must prove a prima facie case, availability of balance of convenience in his favour and his suffering an irreparable injury in the absence of grant of injunction. According to Kerly passing off cases are often cases of deliberate and intentional misrepresentation, but it is well settled that fraud is not a necessary element of the right of action, and the absence of an intention to deceive is not a defence though proof of fraudulent intention may materially assist a plaintiff in establishing probability of deception. Christopher Wadlow in Law of Passing off states that the plaintiff does not have to prove actual damage in order to succeed in an action for passing off. Likelihood of damage is sufficient. The same learned author states that the defendant's state of mind is wholly irrelevant to the existence of the cause of action for passing off. As to how the Injunction granted by the Court would shape depends on the facts and circumstances of each case. Where a defendant has imitated or adopted that plaintiff's distinctive trade mark or business name, the order may be an absolute injunction that he would not use or carry on business under that name".
14. Three Judges Bench of Hon'ble Supreme Court after considering the earlier decisions of Supreme Court has laid down as follows in the case of AMRITDHARA PHARMACY v. SATYA DEO :
"As to confusion it is perhaps an appropriate description of the state of mind of a customer who, on seeing mark thinks that it differs from the mark on goods which he has previously bought but is doubtful whether that impression is not due to imperfect recollection (Kerly on trademark)."
15. In CADILA HEALTH CARE Ltd., v. CADILA PHARMACEUTICALS LTD., (AIR 2001 SCW 1411) Hon'ble Supreme Court has observed as follows:
"35. Broadly stated in an action for passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity the following factors to be considered:
a) the nature of the marks i.e. whether the marks are work marks or label marks or composite marks, i.e. both words and label works.
b) the degree of resembleness between the marks, phonetically similar and hence similar in idea.
c) the nature of the goods in respect of which they are used as trade marks; d) the similarity in the nature, character and performance of the goods of the rival traders. e) the class of purchasers who are likely to buy the goods bearing the marks they require on their education and intelligence and a degree of care they are likely to exercise in purchasing and/ or using the goods. f) the mode of purchasing the goods or placing orders for the goods and g) any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks".
16. The manner in which the principles laid down by the decision of Apex Court and this Court have to be applied as is laid down by the Division Bench decision of this Court in MANGALORE R.K. BEEDIES v. MOHAMMED HANEEF (1993(3) KLJ 37).
"16. A trademark, may consist of a name or a pictorial device or a combination of name and pictorial device. What is important may be the name in some cases, the pictorial device in some cases, or a combination of the name and pictorial device in other cases. The Court will have examine the plaintiff's trademark which may consist of a mere name or a pictorial device or a combination of both as the case may be, and identify its essential and important features and characteristics. Thereafter, without having the original, that is, the plaintiff's mark for comparison, the Court will have to examine the trademark of defendant to identify its essential features and characteristics. It should then visualise, putting itself in the place of an average common man with an ordinary and imperfect memory whether the essential features and characteristics of plaintiff's mark are reproduced and highlighted in the defendant's mark. If it is so done and is likely to cause confusion in the minds of public, then that will be sufficient to grant relief to the plaintiff. A detailed examination to find out minute distinguishing features between the two marks ignoring the essential features will defeat the very purpose and object of finding out whether there is deceptive similarity. The question is not whether the trademark used by the defendant is distinguishable, but whether it is deceptively similar."
17. When the facts of the present case are considered in the light of the abovesaid principles laid down by the Supreme Court and this Court it is clear that in the present case that father of the first defendant A. Dharmaraja Nadar and his son D. Amburaj were doing business under the trademark "SUNDARI" and their application for registration of trademark was pending. They were marketing detergent cakes and washing soaps under the trademark "SUNDARI" from eight years. They decided to retire from business and agreed to help Mohanraj son of Dharmaraja Nadar and transferred by assignment deed dated 15.4.1993 the exclusive use and benefit of the trademark "SUNDARI" along with goodwill of the business in which the said Mohanraj (defendant No. 1) who was doing business under the name and style "Lakshmi Industries" Mohanraj entered into a partnership with Suyaraj on 5.4.1995 and it was agreed that partnership shall do business under the name and style "Lakshmi Industries" with effect from 5.4.1995. The nature of the business agreed to deal is in detergent soaps under trademark "SUNDARI" and "AGNI" and all other allied business connected with main business to be carried on by both the partners. Thereafter, on 8.3.2003 a deed of settlement was entered into between Thiru D. Suyaraj and his brother Thiru D. Mohanraj (defendant No. 1) agreeing interalia as follows:
1. To accept the decisions made in the presence of the Thiru A. Dharmaraj Nadar, Thiru Raja Climax already on 7th day of May 2002, Thiru D. Suyaraj is taken the factory and other machineries, materials as mentioned in Schedule 1.
2. Thiru D. Mohanraj is taken over the factory, machineries materials as mentioned in Schedule 2.
3. Thiru D. Suyaraj shall do the business in Sundari and Agni Soap and soap powders in the business places mentioned in Schedule 3.
4. Thiru D. Mohanraj shall do the business in Sundari and Agni Soap and soap powders in the business places mentioned in Schedule 4."
SCHEDULE-1:
1. Lakshmi Industries, 138, Sundakkamathur Road, Coimbatore
2. Mahalakshmi Detergents, Karaikkal. SCHEDULE-2:
1. S.M. Detergents (D) Ltd., 4, Pallikooda Street, Coimbatore-10 SCHEDULE-3:
The places allotted to do the business by Thiru D. Suyaraj
1.Karnataka State fully.
2.The following districts in Tamil Nadu:
1. Coimbatore, 2. Nilgiris, 3. Erode,
4. Karur, 5. Dindigul, 6. Pudukkottai
7. Thanjavur, 8. Thiruvarur, 9. Nagapattinam,
10. Theni, 11. Marai, 12. Sivagangai,
13. Virudhunagar, 14. Ramanathapuram,
15. Thirunelveli 16. Thoothukudi 17. Kanyakumari.
SCHEDULE-4:
The places allotted to do the business by Thiru D. Mohanraj
1. Andhra Pradesh fully.
2.The following districts in Tamil Nadu Salem, Athur, Namakkal, Trichy, Perambalur, Ariyalur, Kadalur, Villappuram, Dharmapuri, Thiruvannamalai, Vellore, Kancheepuram, Thiruvalluvar, Chennai.
18. Thiru D. Suyaraj who had obtained exclusive rights in the label trademark "SUNDARI" for sale of goods 'Detergents' in the State of Karnataka and 17 districts in the State of Tamilnadu as per Schedule 3 of settlement deed dated 8.3.2003 assigned trademark in favour of his wife S. Shanthi (the plaintiff in the suit) by executing deed of assignment of trademark on 30.10.2003.
19. The execution of abovesaid documents and contents thereof are not in dispute as submitted by the learned Senior Counsel appearing for the parties and wherefore, it is also indisputable that Mohanraj had no right to sell detergent cake under the trade name 'SUNDARI' in the State of Karnataka and it is also the case of first defendant as averred in the written statement and objections to LA. that he is not doing any business in Karnataka by selling detergent soap under the trade name 'SUNDARI' contrary to the contents of settlement deed dated 8.3.2003. However what is contended by the first defendant is that he was selling detergent cake in his own trade name 'SOUNTHARI' and that label and publication in the name 'SUNDARI' are withdrawn and he is now manufacturing and selling detergent cake under the name 'SOUNTHARI' which is no way deceptively similar nor would cause any confusion in the minds of the customers and he has no intention of passing off detergent cake and detergent cake manufactured by him under the trade name 'SOUNTHARI' for which also application for registration of trademark is pending. Hence it is undisputable that defendant No. 1 cannot market detergent cake under the trade name 'SUNDARI' in Karnataka and such right vests with the plaintiff and wherefore it is necessary to find out as to whether the plaintiff has made out prima facie case of passing off and as to whether balance of convenience is in her favour to grant an order of injunction in her favour as sought for in the interlocutory application. It may be noted at the outset that so far as case of the plaintiff in so far as it relates to infringement of copyright and violation of agreement dated 8.3.2003 are concerned the plaintiff has not at all made out any prima facie case and material on record and defence of the defendant when considered in the light of the settled principles of law, no case is made out for grant of temporary injunction as sought for in I.A.II and III and the only question that would require detailed consideration even according to the learned Counsel appearing for the parties is whether plaintiff is entitled to temporary injunction as sought for in I.A.I to restrain passing off by defendants during the pendency of the suit.
20. It is clear from the material on record that the defendants do not dispute that in view of the settlement arrived at between the husband of the plaintiff and the first defendant who are brothers the first defendant was permitted to do business in the detergent cake under the trade name 'SUNDARI' in the entire State of Andhra Pradesh and certain districts in Tamilnadu and the right to market the detergent cake under the trade name 'SUNDARI' was given to the husband of the plaintiff in respect of entire State of Karnataka and 17 Districts in Tamilnadu. The said agreement is not disputed by the defendants. It is also the contention of the defendants even according to the averment made in the counter affidavit and the written statement that defendant No. 1 has been marketing the detergent cake under the name 'SOUNTHARI' which is distinctly different from the trade name 'SUNDARI' and there is no deception or likelihood of confusion in the goods marketed by the defendant and defendant is marketing his goods in his own right and he is not trying to pass off the detergent cake manufactured by him as that of the plaintiff. In view of the fact that the first defendant does not dispute the contents of the agreement dated 8.3.2003 and the fact that the husband of the first defendant was entitled to sell detergent cake under the trade name 'SUNDARI' in the entire state of Karnataka and there is also no dispute that the said agreement is given effect to. There is no material on record to show that on 8.3,2003 an agreement was entered into wherein the territory to which the first defendant and his brother is entitled to sell the detergent cake under the trademark 'SUNDARI' that the first defendant had launched his detergent cake under the name 'SOUNDARI' and 'SOUNTHARI' and according to the averments made in the plaint and the application only after the advertisement was given by the first defendant calling for enquiries for marketing detergent soaps under the trademark 'SOUNDARI' in Vijaya Karnataka daily on 4.1.2004. The cause of action for the suit and application arose for the plaintiff. The defendants do not dispute that plaintiff has been marketing detergent cake under trade name 'SUNDARI' since 8.3.2003 and there is no material on record to show that defendants had commenced sale of detergent cake prior to 4.1.2004 in the trade name of 'SOUNDARI' or 'SOUNTHARI' hence the material on record also shows that prima facie as the plaintiff's husband and after assignment his wife the plaintiff were successful in marketing and earning reputation and goodwill the defendants were attracted to market detergent cake under the trade name deceptively similar and likely to confuse the prospective customers and to indulge in passing off. The very conduct of the first defendant would prima facie show that he is trying to do indirectly what he is not allowed to do directly in view of the contents of the agreement dated 8.3.2003 as he is not permitted to sell the detergent cake in the name of 'SUNDARI' as it is exclusive right given to the husband of the plaintiff to sell the detergent cake under the name of 'SUNDARI' in Karnataka State and wherefore what was required to be decided by the Trial Court was as to whether there is deceptive similarity and confusion was caused in the mind of the customers and as to whether the prima facie case of passing off the detergent cake marketed by the defendant in the name of the plaintiff had been made out. It is clear from the perusal of the order passed by the Trial Court that the Trial Court has compared the trade names 'SUNDARI' with 'SOUNDARI' and 'SOUNTHARI' as it is the case of the first defendant to find out the dissimilarities between the two Wrappers of the detergent cake produced before the Court and has found out certain distinct dissimilarities between the two wrappers or by comparing the label on a careful comparison two wrappers and the Trial Court apart from stating that there is striking dissimilarities between the two wrappers referred to, the Trial Court has not considered as to whether the two trade names under which the detergent cake has been marketed viz., 'SUNDARI' and 'SOUNTHARI' is similar and would cause confusion in the mind of the customers in detergent cakes. The Trial Court has done what ought not to be done and what is required to be done by the Trial Court was to consider as to whether there was deception and not whether striking dissimilarity between the two wrappers produced before the Court and wherefore the order passed by the Trial Court is contrary to the settled principles referred to above and wherefore arbitrary and capricious.
21. When the wrappers of the detergent cake produced before the Court under which the detergent cake marketed by the first defendant which is produced before the Court under the trade name 'NEW SOUNDARI' and 'NEW SOUNTHARI' is looked at from the point of view man of average intelligence and imperfect recollection, it is clear that having regard to the colour scheme the size of the wrapper and also the contents on the wrapper it is clear that the wrapper which is similar in size as that of the plaintiff wrapper containing the detergent cake under the name 'SUNDARI' is of identical size and the essential characteristic of the plaintiff's trade name is also contained in the wrapper used by the defendant. Having regard to the over all similarities both etymologically and phonologically it is clear that the essential feature and characteristic of the plaintiff's trade mark 'SUNDARI' has been made use of by the defendant in the wrapper produced by him used for marketing the detergent cake. So far as the product to which the wrapper is used is the name namely, the detergent cake and it is not disputed that the first defendant is authorised to sell the detergent cake under the name 'SUNDARI' in the State of Andhra Pradesh fully and in certain districts of Tamilnadu and not in Karnataka and therefore, the quality of the detergent cake would also be the same as the plaintiff and defendant have only allocated the area of operation of marketing as defendant No. 1 and his brother have allocated the area of operation for marketing the detergent produced by them and it is also clear from the perusal of the wrappers that having regard to the broad and essential features of the two wrappers and the important feature and the characteristic, the design, layout, getup, colour scheme of the wrapper used by the defendant for marketing the same, it is clear that the same is similar to the wrapper in so far as it relates to the important feature and characteristic. It is also submitted by the learned Counsel for the parties that the word 'SOUNDHARI' and "SOUNTHARI" in Tamil would carry same meaning 'SUNDARI' in Kannada language. Phonetically also both the names 'SOUNDARI' and 'SOUNTHARI' sounds similar to 'SUNDARI' and further, having regard to the design, layout, getup, colour scheme, size there is every possibility of confusion when looked at the point of view of an unwary purchaser with imperfect recollection that if the detergent cake wrapped in the wrapper produced by the defendants is handed over to the customer, he is likely to mistake the same as the detergent cake marketed by the plaintiff as the similarities in the design, layout, getup, feature and essential characteristic would put the customer who are common namely, purchasers of detergent cake most of whom may not be literate and not acquainted with their own mother tongue would be confused, and there is possibility of every confusion that on seeing the mark of the defendant, the customer would think that it is the same article which he had brought earlier but is doubtful as to whether that impression is not due to imperfect recollection and there is also every likelihood that the customer would accept the detergent cake marketed by defendant No. 1 as that of the plaintiff and having regard to the fact that both the first defendant and the plaintiff are marketing the same detergent cake manufactured with the same technology and quality, there is every likelihood that an unwary purchaser would be confused by the detergent that is marketed by the first defendant as that of the plaintiff and wherefore it is clear that the wrapper that is used by the defendants by marketing the detergent cake in Karnataka makes out prima facie case of passing off detergent cake manufactured by him with the trade name deceptively similar to the trade name of the plaintiff though he is not directly permitted to market the said detergent cake as he is not permitted to market the detergent cake under the name of 'SUNDARI' pursuant to the admittedly binding agreement dated 8.3.2003. Wherefore, It is clear that the plaintiff has made out a prima facie case of passing off the detergent cake by the first defendant under the trade name of the plaintiff and it is no answer to say that a person educated in Kannada and Tamil language would go by the etymologically meanings and therefore the difference between the two wrappers, as customers would not be having the opportunity to see both the wrappers and compare the same. Even if they are literate and are in a position to read the contents of the wrapper as they would be purchasing the detergent across the counter and most of the customers would be unwary customers purchasing the detergent cake and mass of the customers would be illiterate and badly educated and wherefore it is clear that the plaintiff has made out a prima facie case of passing off by the defendant and the balance of convenience is also in favour of the plaintiff in as much as the first defendant who is not permitted to sell the detergent cake under the trade name 'SUNDARI' pursuant to a binding agreement with his brother the assignor of the trademark to the plaintiff and he is permitted to exclusively market the detergent cake under the name 'SUNDARI' in Andhra Pradesh and certain Districts of Tamilnadu and the first defendant who is exercising his right pursuant to the said agreement of marketing detergent cake 'SUNDARI' in Andhra Pradesh and some of the Districts in Tamilnadu as per the agreement is trying to pass off the detergent cake under the trade name 'SOUNDARI' and 'SOUNTHARI' by passing off the detergent cake as that of the plaintiff and therefore balance of convenience is in favour of the plaintiff who is entitled to exclusively market the detergent cake under the trade name 'SUNDARI' as per agreement dated 8.3.2003 and plaintiff's business would be grossly affected if the defendants are permitted to pass off the detergent cake as that of the plaintiffs. Accordingly, I hold that balance of convenience is also in favour of the plaintiff and the plaintiff would be put to irreparable loss which cannot be compensated if plaintiff succeeds in the suit; and wherefore to preserve and protect in status-quo the right of the plaintiff the plaintiff is entitled to an order of injunction as sought for in I.A.I. Accordingly, I hold that the order passed by the Trial Court rejecting I.A.I is liable to be set aside and plaintiff is entitled to an order of temporary injunction to restrain the defendants from passing off their detergent cakes bearing trade mark 'SOUNDARI' or any deceptive mark in Karnataka during the pendency of the suit as sought for in I.A.I and accordingly, I pass the following order-.
MFA.No.4437/2004 is allowed. Order passed by the Trial Court in O.S.No.1259/2004 dismissing I.A.I is set aside and I.A.I is allowed as prayed for. Order passed by the Trial Court dismissing I.As.II and III is confirmed and MFA Nos. 4435/2004 and 4436/2004 are dismissed. It is made clear that any observations made in this judgment on the merits of the case would not influence the Trial Court while considering the suit on merits and suit shall be disposed of independently in accordance with law on the basis of the material produced by the parties. The Trial Court is directed to dispose of the suit within nine months from the date of receipt of copy of this order or production of certified copy of this order whichever is earlier. Parties to bear their own costs in these appeals.