Calcutta High Court
Modern Food Industries (I) Limited vs Modern Bakery And Ors. on 3 May, 2006
Equivalent citations: 2006(4)CHN65, 2007(34)PTC504(CAL)
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose, Tapan Kumar Dutt
JUDGMENT Pinaki Chandra Ghose, J.
1. The appeal being A.P.0.T. No. 32 of 2006 was filed by the appellant/petitioner Modern Food Industries (I) Limited (hereinafter referred to as the said company) from an order dated 14th November, 2005 passed by the Hon'ble First Court. Similarly, the appeal being A.P.O.T. No. 39 of 2006 was filed by M/s. Modern Bakery and Others (hereinafter referred to as the said firm and its partners). Both the appeals were directed against an order dated 14th November, 2005 passed by the Hon'ble First Court.
2. We have heard the learned senior Advocates for the parties.
3. Facts of the case briefly are as follows:
The said company is a public sector undertaking under the administrative control of the Ministry of Agriculture/Ministry of Food Processing Industries under the Government of India. The said company was incorporated in the year 1965. The production had commenced in the year 1968.
4. The case of the said company that the bread produced by the said company has been sold since its inception under the trademark "MODERN". The said company is the registered proprietor of the said trademark "MODERN" in respect of "all types of bread" under the Registration No. 444239B in Class 30 w.e.f. 11th October, 1999. The said registration was duly renewed from time to time and is still subsisting. The said company also designed an attractive packaging get up, lay out and colour scheme for "MODERN" bread which was registered as a copyright in favour of the company being No. A-9291/73 under the provisions of the Copyright Act, 1957.
5. The said company expanded its activities over time from one production unit in 1956 to 14 bakery units by 1994. On 31st January, 2000 Government of India disinvested 74% of its shareholding in the said company in favour of Hindustan Lever Limited (hereinafter referred to as H.L.L.) and it ceased to be a Government company w.e.f. 1st February, 2000 and became a joint venture company of the Government of India and H.L.L.
6. On 29th November, 2002 Government of India disinvested its balance stake in the said company in favour of H.L.L. by a Government Notification dated 6th January, 2003. The said company spent huge amounts by way of advertisement and publicity of its products under the trademark "MODERN" and the same have acquired enormous goodwill and reputation and has become a distinctive entity in respect of the product of the said company.
7. The said company also started selling as has been stated since long another range of breads under the trademark "MODERN" in conjunction with "KISSAN", which is a trademark of H.L.L. used by the said company under a licence. The packaging of the said product comprise of the following salient features:
(a) A golden yellow background with a healthy crop of wheat in shades of brown in the forefront;
(b) The device of a large slice of bread with the words "FARM FRESH ATTA BREAD" depicted in bold lettering the trademark "MODERN" on a dark background in an oval device. The aforesaid packaging was designed for and on behalf of the said company by its advertising agency for valuable consideration and is an original artistic work within the meaning of Section 2(c) of the Copyright Act, 1957 of which copyright vests exclusively with the said company.
8. The said company pleaded in the petition that recently they came to learn that the said firm and its partners are selling bread in plastic packets having dimensions which are deceptively similar with the company and the distinctive package design of the said company in respect of bread and in colourable imitation thereof. It is further stated that the product of the said firm under the said mark is identical and/or deceptively similar to the said company's said trademark and is packaged in packets which resemble the said company's product. The said firm and its partners have chosen the said trademark, including the colour scheme, get up and design and with the object of misleading and confusing the consumer and with the sole unholy object of appropriating to itself the goodwill of the said company in relation to the said bread "MODERN".
9. It is further stated that the common persons are purchasing bread in a casual manner and illiterate and less alert persons are also purchasing bread and there exists a strong likelihood of confusion and deception in the course of trade. The wrongful and mala fide adoption by the respondents of the purported mark "MODERN" and its deceptively similar trade dress is to create confusion amongst the buyers. The said firm and its partners have deliberately and with a mala fide intention caused violation of the trademark and copyright of the product "MODERN" of the said company using the said company's goodwill and by such illegal usage of the said trademark and copyright, the firm and its partners have directly violated the statutory norms that the said company is entitled to. The said firm and its partners are using the said trademark "MODERN" which amount to an infringement of its registration under No. 444239B and further the actions on the part of the said firm and its partners thus clearly amount to an infringement of the said company's artistic copyright in the said works including the work registered under No. A-9291/73. Hence, the instant suit was filed by the said company against the said firm and its partners and in the said suit the said company filed an interlocutory application inter alia praying for an injunction from restraining the firm and its partners by an order of injunction manufacturing, selling, distributing, marketing their products under the trademark "MODERN' and further injunction was prayed against the firm and its partners restraining them by an order of injunction from passing off and are attempting to pass off their products in pouches bearing the company's registered trademark "MODERN". It is also the case of the company that the said firm and its partners have infringed the company's copyright and the artistic works of the packaging get up, lay out and colour scheme which was designed for "MODERN" bread.
10. In the other appeal the case of the firm is that the firm is a partnership firm and prior to 1949 one Badruddin Ahmed was engaged in the business of manufacturing and selling various kinds of bread under the trademark "MODERN" as the sole proprietor of M/s. Modern Bakery and of biscuits. The said sole proprietor by a registered indenture on 2nd February, 1949 sold the sole proprietary firm under the name and style of "Modern Bakery" to Sarat Chandra Saha, since deceased and Jnanendra Kumar Saha. Thereafter, Jnanendra Kumar Saha sold his share on 13th August, 1952 by a registered indenture of sale in favour of Sarat Chandra Saha. Since 1952 the said firm was carrying on business and subsequent thereto Sarat Chandra Saha and the present respondent Nos. 2 and 3 became the partners of the said firm and the proprietorship firm converted into a partnership firm and the said partnership firm continuously and without any interruption manufactured and sold bread of various kinds under the trademark "MODERN" and "SHAKTI".
11. On August 16, 1972 Sarat Chandra Saha died intestate. The daughters of Sarat Chandra Saha by a registered indenture dated 10th September, 1975 conveyed and transferred their rights to the widow of Late Sarat Chandra Saha and Santosh Kumar Saha and Sadhan Chandra Saha. Subsequently, by a registered deed of partition dated 18th July, 1988 bakery business was transferred and allotted in favour of the present Santosh Kumar Saha and on 1st July, 1994 a deed of partnership was entered into between Santosh Chandra Saha and Sanjoy Kumar Saha and the business under the name and style of "Modern Bakery" is still carrying on their business. The bread manufactured by the firm since the inception to of Modern Bakery sold under the trademark "MODERN".
12. It was also pointed out that a meeting was held in the chamber of Director of Rationing, West Bengal on 1st March, 1976. The representatives of the company as well as the representatives of the firm attended the meeting and therefore it was known to the company that the firm is selling their product under the mark "MODERN". The company did not take any step against firm and at this stage cannot have the right to state that the company is the prior user of the said mark "MODERN".
13. On 25th September, 2000 the said firm applied for registration of its trademark "MODERN" under the Trade Marks Act, 1999. The said application was advertised before acceptance under Section 20(1) of the Trade Marks Act, 1999 and the firm is manufacturing and selling all kinds of bread under the trademark "MODERN" ever since 1949 and there was no objection at any point of time on the part of the said company for using the said trademark "MODERN".
14. It is the case of firm that the firm is the prior user of the trademark "MODERN" and further it has been stated that plastic packets in which the firm is selling its bread manufactured by it are not deceptively similar to the packets of the company and/or in colourable imitation thereof. It is further the case of the firm that the firm is the prior user of the trademark "MODERN" and has been continuously selling all kinds of bread under the said trademark "MODERN" whereas the said company is selling bread under the trademark "MODERN" only from 1968. Therefore, there is no question of passing off and/or attempting to pass off the firm's product as that of the product of the company has no bearing in the facts and circumstances of this case.
15. Mr. Sudipta Sarkar, learned senior Advocate appearing on behalf of the said company contended that admittedly the company was incorporated in the year 1965. started its commercial production of "MODERN" bread from 1968. The Copyright Registration Certificate shows user since 1970. Till 31at January, 2000 it was a Government of India Undertaking. The company enjoys tremendous reputation and goodwill and is the registered proprietor of the trademark "MODERN" w.e.f. 11th October, 1985. The firm and its partners did not file any rectification petition to the company's registration till date. Although the alleged claim of user is since 1949, the firm and its partners have filed an application for the label 'Modern" only in September, 2000 which was advertised in April, 2005. The said company is the registered copyright holder since 1973 of the artistic work in the packaging consisting of the mark "MODERN" and a distinctive wrapper design. Certificate shows user since 1970. The specific art work is part of the subsequent documents disclosed by the company before this Hon'ble Court although it has been alleged that the firm and its partners are using the trade name/trademark "MODERN" since 1949, there is no other evidence to show that the firm and its partners have been using the impugned mark from 1949 as alleged or any user before 1968 or 1970 excepting the two invoices in the year 1958. Invoices relied on by the firm and its partners are documents given to various printing presses. The documents of title do not show any viser of the trademark "MODERN" by the firm and its partners. Admittedly, the said company is the registered proprietor of the trademark "MODERN" since 1985 and is using the same since 1968 and further the said company is also the holder of the copyright is the distinctive label. The certificate is prima facie evidence and the company is also entitled to use the said label exclusively. He also drew our attention to Section 48 of the Copyright Act, 1957. He further drew our attention to Section 29 of the Trade Marks Act, 1999. By reasons of the registration of the trademark "MODERN" rights of the said company are statutorily protected. It is not necessary for the company to show the user in an infringement action. In fact, marks can be registered even as "proposed to be used" and he relied upon the decisions Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharrmaceuticals Laboratories AIR 1970 SC 1649 Ruston and Hornby Ltd. v. Zamindara Engineering Co. and 51 RPC 157 Smith Bartlet and Co. v. British Pure Oil Grease and Carbide Co. Ltd.
16. According to him, to defeat the rights of a registered user, the firm and its partners must show that on the date of first commercial use of the mark "MODERN" "by the said company, i.e. 1968, the firm and his partners had acquired substantial reputation and goodwill in relation to the trademark "MODERN". No such goodwill or reputation shown by the firm and its partners before the Hon'ble Court. He also drew our attention to Section 34 of the Trade Marks Act and submitted that the said company has a vested right and mandates that to establish a claim of prior user a trademark should have been "continuously vised" from a date prior to the registered mark. Occasional use is not sufficient. The user has to be substantial. He also relied upon a decision reported in 28 RPC 512 William's Ld. v. Massey Ld. In any event, to succeed in a claim of prior use, the user of the mark must have acquired goodwill and reputation on the date of first user of the mark by the registered proprietor. The firm and its partners have to establish that by 1968 they had acquired a vested right and goodwill and reputation in the user of a common English descriptive word "Modem" which they have failed to do on the materials disclosed before the Hon'ble Court. The onus is clearly on the firm and its partners and according to the law a statutory protection cannot be defeated easily.
17. Honest concurrent user cannot, be a defence in an infringement action including infringement of copyright. In any event, the fact of honest concurrent user is a question for the Registrar to adjudicate upon. The said company came to learn that the firm and its partners are selling bread under impugned word "Modern" in September, 2005 and thereafter, they have instituted the suit on 21st September, 2005. In any event, delay is not a defence in an infringement action and an injunction would normally follow in an infringement action. He relied upon a decision Midas Hygiene Industries (P) Ltd. and Anr. v. Sudhir Bhatia and Ors.
18. He further contended that there has been no waiver/acquiescence as alleged on the part of the company. There is no evidence to show that the company was aware that the firm and its partners were using their mark "MODERN" of the company. The firm and its partners could not show that they had acquired any goodwill in relation to the impugned mark. The meeting held on 1st March, 1976 relied on by the firm and its partners does not show that the firm and its partners were using the mark "MODERN" in 1976. Acquiescence implies a positive act, not merely silence or inaction.
19. He further submitted that the firm and its partners are habitual infringers and used reputations of other well-known companies such as Amul in their packaging. The said firm and its partners use the letter 'R' in a circle in their packaging thereby misrepresenting that they are the registered proprietors of the mark "MODERN".
20. He further contended that his clients have no intention of stopping the firm and its partners' business. Objection relates only to the use of the mark "MODERN". The firm and its partners admittedly have other brands besides "Modern" as is evident from their invoices. The firm and its partners are using "Modern" or "Modern Bakery" in their packaging.
21. He further submitted that the question raised by the firm and its partners cannot be decided at the interlocutory stage on the materials produced without evidence. The said company has had the invoices examined by handwriting experts and also written to various addresses mentioned therein which indicate that the documents to say the least are suspect.
22. On the contrary, Mr. Pratap Chatterjee, learned senior Advocate appearing on behalf of the firm and its partners contended that the firm and its partners are manufacturing and selling bread under the trademark "MODERN" much prior to 1968. It is also within the knowledge of the company that the said firm and its partners are manufacturing and selling all kinds of bread under the trademark "MODERN" and the company did not file any objection in an application made by the firm for registration of its trademark which was duly advertised before the acceptance of the Trade Mark Journal on March, 1976.
23. He further submitted that at a meeting held in the chamber of the Director of Rationing, West Bengal, it was decided that the wrapper to be used for packing of a special kind of bread should be of a particular colour or colours to be adopted by all the bakeries. He further contended that the plastic packets in which the firm and its partners are selling bread manufactured by it are not at all similar to the packets of the said company and/or in colourable imitation thereof. In view of Section 34 of the Trade Marks Act, 1999, the said company cannot interfere with or restrain the firm and its partners from manufacturing and selling bread under the trademark "MODERN".
24. According to Mr. Chatterjee, there is no question of passing off their product under a trademark similar to the aforesaid trademark of the said company. In any event, the firm and its partners are the prior user of the said mark and no question can arise in respect of passing off their products under a trademark similar to the trademark of the company. It is further urged that the mere use of packets of similar dimension do not result passing off particularly when the dimension of the packets are common to the trade. The size of the packets used by various degrees for marketing and selling breads of similar quantities is the same and no passing off can result by user of packets of similar dimensions. Without disclosing the get up, lay out, colour scheme of the label and/or packets in which the company sells its products which has been registered in favour of the company under the Copyright Act, 1957, has not been disclosed in the application, therefore, in the absence thereof, it cannot be said that the firm and its partners have infringed the artistic work registered in favour of the company under the Copyright Act, 1957.
25. It is also the case of the firm and its partners that no case for the passing off had been made out by the said company. He further contended that no case made out by the company for appointment of a Receiver. There are no pleadings in the interlocutory application wherefrom the necessity of the appointment of a Receiver can be made out and/or substantiated. It is further submitted that the appointment of a Receiver in the facts and circumstances of this case, is neither just nor convenient.
26. He further pointed out that the company has very conveniently suppressed its exact date of knowledge of the marketing and selling breads under the trademark "MODERN" by the firm and its partners. In the absence of the disclosure of the exact date of knowledge of use of trademark "MODERN" by the firm and its partners cannot be substantiated or it can be a reason to appoint a Receiver in the matter. There is no possibility of any confusion in the mind of purchaser and therefore, direction by the Hon'ble First Court that the firm and its partners can only use one wrapper and/or maintain its statement each and every day and further directed to keep the amount of the sale proceeds separately in the bank account after meeting day-to-day expenses and not to appropriate the same is against the norms of law. He further contended that the operative portion of the order of the Hon'ble First Court is contradictory to the finding recorded earlier in the order.
27. Mr. Chatterjee further contended that the firm and its partners can take advantage of Section 34 of the Trade Marks Act, 1999. The said Section does not define the meaning of the word "continuously used". In order to show that the said firm and its partners have continuously used the trademark "MODERN", what has to be shown by the said firm and its partners is that the firm and its partners have the intention to use the trademark "MODERN" and at no point of time had abandoned it. Continuous use has nothing to do with the volume of business. What has to be shown is that the trademark has been used continuously without any break on the part of the user and there has been no intention at any point of time to abandon such use. Documents have been annexed by the said firm and its partners (at pages 125, 126, 127, 128, 129, 130 and 131 of the stay petition) to show that the firm and its partners since 1955 are continuously using the trademark "MODERN" without any break. In support of contention he relied upon a decision Radhakisan Naraindas, a Partnership firm v. Trilokchand and Ors. He further contended that a trader acquires a right of property in a distinctive mark merely by using it upon or in connection with its goods irrespective of the length of such user and the extent of its trade. The trader who adopts such a mark is entitled to protection directly, the article having assumed a vendable character launched upon the mark. Registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed by common law and at equity without registration. Registration itself does not create a trademark. The trademark exists independently of the registration which merely affords protection under the statute. Common law rights are left wholly unaffected. Priority in adoption and use of a trademark is superior to priority in registration. In support of such contention he relied upon the decisions State v. Narayandas Mangilal Dayame Century Traders v. Roshan Lal Duggar & Co. and Ors. Allegran Inc. v. Milment Ofthe Industries and Ors. Senor Laboratories Ltd. v. Jagsonpal Pharmaceuticals Ltd. Swaran Singh Trading as Appliances Emporium v. Usha Industries (India). New Delhi and Anr., 2002(3) CHN 22 Societe Dos Products Nestle, S.A. and Anr. v. "Kit-Kat" Food Product and Anr. and 96 PTC 476 N.R. Dongre v. Whirlpool Corporation.
28. He further contended that a registered owner's right is not absolute. It is subject to the right of the person who is claiming prior user. In the instant case even before the company started using the mark 'MODERN', the said firm and its partners have been using the same continuously without any break. The user of the trademark "MODERN" on the part of the firm and its partners was never abandoned at any point of time.
29. He also submitted that just because the firm and its partners marketed their products under the trademark "MODERN'S", it can never be said that there has been a dilution in the intention on the part of the firm and its partners in using the trademark "MODERN". The said firm and its partners are using both the marks "MODERN" as well as "MODERN'S".
30. In reply, Mr. Sarkar submitted that it is difficult to acquire goodwill and reputation in a case of passing off action in respect of a common descriptive English word. He contended that the decision reported in 2002(3) CHN 22 (supra) there was total stopping of the company's business and the case Corn Products Refilling Co. v. Shangrila Pood Products Ltd. is a registration case which has no application in the facts and circumstances of this case. The matter was concerned with evidence of user in registration proceedings. He further submitted that the decision N.R. Dongree and Ors. v. Whirlpool Corporation and Anr., which is a passing off case where transborder reputation was established and affirmed by the Delhi High Court. In the decision reported in 1996 PTC 476 (supra) transborder reputation and goodwill established in the case of an invented word. In (supra) no evidence of any user to defeat infringement action. The Court, in the said decision, merely reaffirms the statutory provision of Section 34. In Satyam Infoway Ltd. v. Sifynet Solutions (P) Ltd. and Ors. the goodwill and reputation established for 'Sify', which is an invented word. In another case Uniply Industries Ltd. v. Unicorn Plywood Pvt. Ltd. and Ors. the prior user of inherently distinctive marks are protected, not concerned with ordinary descriptive words. Hence, he submitted that those decisions cannot render any help to the firm.
31. After considering the facts and circumstances of this case it appears to us that the appellant firm prima facie on the basis of the documents disclosed before us, has been able to establish that since 1955 they were using the mark "MODERN" in respect of their products in the market. It further appears that Modern Food Industries (I) Limited, company herein, admittedly selling its bread under the trademark "MODERN" from 1968 which is also admitted by the company in APOT No. 39 of 2006. It is also admitted that the Copyright Registration Certificate shows that the company is user of the said trademark "MODERN" since 1970. It is also not in dispute that at any point of time until the suit is filed by the company in this Hon'ble Court, no step was ever taken by the company. It is not in dispute that the company is the registered proprietor of the trademark "MODERN" w.e.f. 11th October, 1985. It is also a fact that the firm and its partners did not file any rectification petition to the company's registration till date. Although the alleged claim of user is since 1949, the firm and its partners have filed an application for the lebel "Modern" only in September, 2000 which was advertised in April, 2005. The said company is the registered copyright holder since 1973 of the artistic work in the packaging consisting of the mark "MODERN" and a distinctive wrapper design made thereunder. It is also a fact that in a claim of prior use, the user of the mark must have acquired goodwill and reputation on the date of first user of the mark by the registered proprietor. But the allegation has been made by the company that the company came to learn that the firm and its partners are selling bread under the said mark "Modern" in September, 2005 and on 21st September, 2005 they have instituted the suit. At this stage, in our opinion, the said fact cannot have any edge on the right of the firm since the document was placed before us, it appears to us that the company had due knowledge that Modern Bakery, the firm, are using the word "Modern" in respect of their product for a long time. Therefore, by passage of time there cannot be any doubt to hold that the said firm had acquired some goodwill and reputation in the market in relation to the said mark "MODERN" in respect of their product.
32. It further appears to us as has been pointed out by Mr. Sarkar that the firm and its partners are habitual infringers and used reputations of other well-known companies such as Amul in their packaging. The said firm and its partners use the letter 'R' in a circle in their packaging thereby misrepresentating that they are the registered proprietors of the mark "MODERN".
33. After analyzing the facts and the documents placed before us, we hold the firm and its partners have been able to establish that since 1950 they were and still are carrying on business under the mark "MODERN" and prima facie they are the prior user of the said mark. Furthermore, the company had due knowledge of the business of the firm for a long time but did not take any steps till this suit is filed. Hence, we direct the firm to furnish the accounts month by month in respect of their sales to the company until further orders. We also allow the firm to use their wrappers and labels excepting the labels used by the company and for which they have already got their registration under the Copyright Act.
34. For the discussions held by us hereinbefore, we set aside the order so passed by the Hon'ble First Court is set aside. We further expedite the suit written statement to be filed by the appellant firm in the suit within a period of 3(three) weeks, cross-order for discovery 3(three) weeks thereafter, inspection forthwith and the suit to appear in the prospective list 8(eight) weeks thereafter.
35. Both the applications filed by the parties are disposed of.
36. By consent of parties, both the appeals are treated as on day's list and are disposed of on the above terms.
Tapan Kumar Dutt, J.
37. I agree.