Citation : 2016 Latest Caselaw 2972 Bom
Judgement Date : 17 June, 2016
KSB Aktiengesellschaft & Anr. v Anil Agarwal
914-NMS1420-14-KSB-F.DOC
ATUL
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 1420 OF 2014
IN
SUIT NO. 854 OF 2014
1 KSB AKTIENGESELLSCHAFT,
a corporation organised and existing
under the laws of Federal Republic of
Germany and having its principal place
of business at Frankenthal/Pfalz,
Germany
2 KSB PUMPS LIMITED,
a company incorporated under the
Companies Act, 1956 and having its
office at 126, Maker Chambers III,
Nariman Point, Mumbai - 400 021 and
also at Mumbai-Pune Road, Pimpri,
Pune 411 018 ...PLAINTIFFS
Versus
ANIL AGARWAL,
of Mumbai Indian Inhabitant having his office
at 122, Narayan Dhuri Street, 2nd Floor Sreej
Bhavan, Mumbai 400 003 and also at 313/319
Samuel Street, Haresh Chambers, Ground
Floor, Mumbai 400 003 ...DEFENDANT
Ms. Pooja Kshirsagar, i/b Bharat Shah & Co., for the Plaintiff.
CORAM: G.S. PATEL, J
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KSB Aktiengesellschaft & Anr. v Anil Agarwal
914-NMS1420-14-KSB-F.DOC
DATED: 17th June 2016
ORAL JUDGMENT:
1.
This order disposes of the Plaintiffs' Notice of Motion. Thought the application is for reliefs in both infringement and passing off, Ms. Kshirsagar for the Plaintiffs restricts her reliefs to
those in passing off.
2. I passed an ad-interim order on 22nd September 2014, noting
a statement made on behalf of the Defendant that the Defendant would not, until 1st October 2014, use the offending mark "KSB"
in relation to any goods. This order was continued on 1st October 2014 until further orders. The Defendant has since filed an Affidavit
in Reply; there is also an Affidavit in Rejoinder. The Defendant has, however, been absent on every occasion after 12th June 2015, when he was last represented in Court. The order sheets and roznamas of
24th July 2015 (S.J. Kathawalla, J.), 13th August 2015 (S.J.
Kathawalla, J.) and 16th June 2016 all indicate that the Defendant has not, on any of these three occasions, appeared in Court.
3. I have heard Ms. Kshirsagar. She has taken me through the plaint, its annexures and paperbook in the Notice of Motion. She has also placed for consideration a comprehensive note that covers all the relevant aspects of this matter, including a very fair summary
of the defences taken in the Affidavit in Reply.
4. Plaintiff No. 1 is a German company. Plaintiff No. 2 was incorporated on 11th April 1960 in India. It is an associate of Plaintiff No. 1, which holds about 40.54% of the 2nd Plaintiff's equity
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through a subsidiary. The 2nd Plaintiff is a licensee of the 1st
Plaintiff in respect of the trade mark in question. This is the mark "KSB" and the Plaintiffs claim proprietary rights over both the
word and label marks. The Plaintiffs have registrations at various levels and in various jurisdictions. There is, to begin with, a long list of registrations in overseas jurisdictions: Australia, Canada, USA,
UAE, Brunei, Japan, Korea, Ireland, Germany, China, Singapore, Great Britain, South Africa, as also under the Madrid Protocol covering Scandinavian countries and the United Kingdom and from
the World Intellectual Property Organization ("WIPO") as well. A list of this is at Annexure "1" to the note tendered by Ms.
Kshirsagar today.
5. Within India too the Plaintiffs between them have registrations across several classes, viz., Classes 6, 7, 9, 11, 16, 37, 41 and 42. Even within Class 7, the Plaintiffs have four distinct
registrations on 9th October 1958, 24th October 1975, 26th
September 1996 and 3rd September 1997. There is the question of use. Worldwide, the Plaintiffs legitimately claim use dating back to 1887. In India, this use dates back to 1960.
6. I must, at this stage, make a note of the products or goods covered by Class 7. This is of some consequence because of a rather
peculiar defence taken in the Affidavit in Reply. Class 7 covers "pumps", both power and hand operated, compressors (machinery and air), treads and valve parts for machines, pumps (not for land craft), units consisting of pumps and motors and so on. These are the goods in respect of which the Plaintiffs have sought registration.
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The entry in Fourth Schedule to the Trade Mark Rules for Class 7 &
12, reads thus:
"7. Machines and machine tools; motors and engines (except for land vehicles); machine coupling and transmission components (except for land vehicles); agricultural implements other
than hand-operated; incubators for eggs.
12 Vehicles; apparatus for locomotion by land, air or water."
7. In 1871, one Johannes Klein and others formed a German
company under the name "Frankenthaler Maschinen & Armatur- Fabrik Klein, Schanzlin & Becker". A few years later, this company
went public. Its name was changed to the present name. The present name, KSB, is an acronym. It is comprised of the first letters of the surnames of the three first founders of this company.
The 1st Plaintiff has been known simply as KSB in Germany for
more than 130 years. A more detailed corporate history of the 1st Plaintiff is set out in the plaint.1
8. The 1st Plaintiff, apart from its association with the 2nd Plaintiff, also has a wholly owned subsidiary in India. This subsidiary carries forward the corporate name of the Plaintiff: it is known as KSB Tech (P) Limited. It was incorporated on 23rd
November 2004. The Plaintiff No. 1 and its various affiliate companies formed a 65-company multinational group. All these corporate entities use the name KSB as an essential part of their
1 Plaint, Exhibit "B", p. 36.
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corporate names. A list of these 65 companies and the countries in
which they are registered is set out in the plaint.2
9. As I have noted, the 2nd Plaintiff was incorporated on 11th April 1960 and it is permitted by the 1st Plaintiff to use KSB in its corporate name and as a trade mark. Since its incorporation, the 2nd
Plaintiff has manufactured, marketed and sold products under the trade mark KSB and with the KSB logo. The Plaintiffs have thus been using KSB as their corporate and business name, trading
name, trading style, house mark, proprietary mark and label for four decades in India. The 1st Plaintiff has registrations, as I have noted,
in India in several classes. A list of these is to be found in the plaint. 3 It is seen from this that the label marks feature the letters KSB
written in a unique font of block capitals. There is also a logo which shows a round lower case "b" integrated into a round-cornered hollow square in grey. In relation to printed matter and stationary,
the Plaintiffs use the mark KSB. A representation of this is also to
be found in the plaint.4 The relevant legal proceedings certificates are also annexed to the plaint.5 These are in respect of the registrations in Class 7. On 4th December 2006, the Registrar of
Trade Marks entered the name of the 2nd Plaintiff as the registered user of some of the trade marks. A formal order is awaited. The 2nd Plaintiff has been using the mark KSB on its products. The Plaintiffs are also registerants of the domain name www.ksb.com.
2 Plaint, Paragraph 7, pp. 4-5.
3 Plaint, Paragraph 12, pp. 8-9.
4 Plaint, Exhibit "G18", p. 111; Plaint, Exhibit "G19", pp. 112-113; Plaint,
Exhibit "G20", pp. 114-115.
5 Plaint, Exhibit "H1", p. 118; Plaint, Exhibit "H2", p. 121.
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10. As to the question of sales and promotional expenses, there
can be no dispute either. The note tendered by Ms. Kshirsagar shows that the worldwide sales and promotions from 1960 to 2013
are indeed in very high volumes. For the year 2013, the sales were €855,949,000 and the sales expenses were nearly €7 million in 2011. In India too sales have steadily increased from Rs. 3,73,000/-
in 1963 to Rs. 739 crores in 2013. The promotional expenses in India are substantial, nearly Rs. 6.5 crores in the year 2013. The Chartered Accountant's certificates attesting to the correctness of these figures
are also annexed to the Notice of Motion.6
11.
Ms. Kshirsagar also points out that the third aspect required to gain recognition as a well-known mark is, in the case of the KSB
mark, complete. The Plaintiffs have been diligent in protecting their intellectual property rights. Annexure "2" to the note that she submits today has a list of 12 separate litigations initiated by the
Plaintiffs in various Courts, including this Court, in which the
Plaintiffs have obtained favourable orders. She also points out that Dr. D.Y. Chandrachud, J. (as he then was) while sitting singly noted as well-founded the Plaintiffs' case that KSB is an internationally
well-known trade mark with a presence in India. 7 If there was any dispute about the Plaintiffs' mark being recognized as a well-known mark, it is, Ms. Kshirsagar submits, put to rest by the decision of Mr. Justice Rajiv Shakdher of the Delhi High Court in KSB
Aktiengesellschaft & Ors. v KSB Global Limited.8 This was a final
6 Motion paperbook, pp. 250-251; Rejoinder, Exhibit "10". 7 KSB Aktiengesellschaft & Anr. v KSB Real Estate & Finance Private Limited; Notice of Motion No. 4019 of 2007 in Suit No. 2930 of 2007; decided on 11th February 2008.
8 2011 (45) PTC 103 (Del.)
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order in the Suit. After noticing the factual matrix, Mr. Justice
Shakdher held in paragraph 12.1 of the PTC report that the defence taken in the case before him was untenable for the reason that the
Plaintiffs' trade mark KSB has gained, both in India and several countries across the world, a significant reputation. I am in most respectful agreement with the view taken by Mr. Justice Shakdher. I
would only add to it by saying that even if it is not yet in the register or list of well-known trade marks maintained by the Registrar of Trade Marks, it ought to be. It satisfies every one of the essential
requirements for inclusion in that list. These volumes of sales and turnover, the registrations and such strength and longevity of
presence, both in India and overseas, seem to me to leave absolutely no room for doubt that KSB is indeed a well-known mark and ought
to be formally recognized as such by the Registrar.
12. It seems that on 11th May 2010 the Defendant filed an
application for registration of the trade mark KSB as a label mark in
Class 7 in relation to manufacturing and trading in bearings. This was despite the existence of the Plaintiffs' mark on the register. I agree entirely with Ms. Kshirsagar that it is difficult to comprehend
how this application could have been entertained; for the Defendant was required to take search and had he done so, the Plaintiffs' mark would undoubtedly have been cited as a conflicting mark. The requirement for search is something that is not optional or one that
is only raised when matters come to Court. It is settled law, including by long line of decisions of this Court, that it is the Defendant's obligation while applying for a mark not only to take a
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search of the register9 but also to do a market search.10 If he does not
do so and an action is brought against him subsequently in infringement, he cannot claim innocence.
13. It seems that the Defendant's application was advertised in the Trade Marks Journal No. 1613 on 4th November 2013. The
Plaintiffs saw this application only on 17th May 2014 but were unable to file a notice of opposition in time. The Plaintiffs, through their Advocates, requested the Registrar of Trade Marks not to
accept the Defendant's application.11 The Plaintiffs also issued a cease-and-desist notice through their Advocates on 19th May 2014. 12
This notice was returned with a remark "intimated and not claimed". This is a telling circumstance. The Defendant clearly
knew that the Plaintiffs had asserted their rights. By choosing not to accept the notice, the Defendant has waived or given up any case he might once have had of being unaware of the Plaintiffs assertion of
their rights.
14. On the very day that the Plaintiffs' Advocates sent the cease- and-desist notice, the Defendant's mark KSB proceeded to
registration in Class 7. The Plaintiffs were, of course, unaware of this. On 20th August 2014, the Plaintiffs' Advocates sent a reminder. This time they attempted service by hand delivery. A
person who claimed to be the Defendant's brother read this letter
9 Bal Pharma Ltd v Centaur Laboratories Pvt Ltd & Anr., 2002 (24) Petitioner 26 (Bom) (DB).
10 Gorbatschow Wodka KG v John Distilleries Ltd., 2011 (47) PTC 100 (Bom).
11 Plaint, Exhibit "L", pp. 132-133.
12 Plaint, Exhibit "I", p. 122-128.
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and only then informed the Plaintiffs' Attorney's representative that
the Defendant's office had shifted. The Plaintiffs' Attorney's representative went to the new address. There, he found and served
the Defendant. The Defendant read the notice and then refused to formally accept or acknowledge service. What seems to have happened is that the Defendant then spoke to the Plaintiffs'
Attorneys and claimed that his mark was different from the Plaintiffs' mark, and that there was no infringement. All of this is set out in the Plaintiffs' Advocate's letter of 20th August 2014. 13 A
reminder followed from the Plaintiffs' Advocates on 25th August 2014.14 This Suit was filed on 18th September 2014.
15. As I have noted, the Defendant claims that his mark is
"different". Is it? The Defendant's mark is disclosed in the Additional Affidavit filed by the Plaintiff on 23rd September 2014. 15 As far as I can tell, other than a slight difference in the font, there is
no difference at all between the Defendant's mark and the
Plaintiffs'. The Plaintiffs' mark appears to use a sans serif or slab font; the Defendant's mark is a serif font. The Defendant also uses the same three letters. He also depicts them in an all-caps form with
a slight separation between each letter. Merely to say, therefore, that the two marks are different is clearly untenable. Structurally, visually and, should it come to that, phonetically, the two are the same. There is only one way to pronounce the letters KSB, and that is
'kay-ess-bee'.
13 Plaint, Exhibit "J", p. 129.
14 Plaint, Exhibit "K", p. 130
15 p.20 of the Motion paper-book.
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16. The Reply discloses a few other defences. The first is that the
Plaintiffs use the mark KSB in respect of pipes, pumps, valves and so on, all products used in the agricultural sector, but that the
Defendant uses the mark in relation to bearings. The manner in which the Defendant has placed his case is set out in paragraphs C(i) and C(ii) of the Affidavit in Reply to the Notice of Motion. 16
They read thus:
"[C](i) With reference to paragraph No. 20(c) of the Plaint, a bearing constraints relative motion and
reduces friction between moving parts to only the
desired motion. The Defendant is aware that there are various types of bearings and they are capable of handling axial thrust load in either direction. The
Defendant states that it is false to allege that with the deliberate object of making illegal profits by trading upon the reputation and goodwill enjoyed by the Plaintiffs, the Defendant has dishonestly and
fraudulently adopted and used the trade mark by
misrepresentation to the Registrar of Trade Marks. The Defendant is unaware nor concerned that the use of the trade mark by the Defendant is likely to mislead the members of trade and public into believing that his
products are original and/or he is the dealer and/or distributors and/or agent of Plaintiffs and/or their products and/or their part/components, and/or that Defendant is in some way connected or associated with
Plaintiffs. The product of the Defendant is different from that of the Plaintiffs. The packaging of the Defendant's bearings has no similarity with that of the Plaintiffs.
Customers/Clients/Patrons using the Plaintiffs' goods are never going to be misled by words and label works
16 Notice of Motion paperbook, pp. 21-23.
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of the Defendant as the name of manufacturer is distinctively printed on the boxes. The degree of
resemblance between the marks, phonetically is dissimilar. Even the idea of the product is dissimilar. The
nature of goods, industry, usage, clientele, amongst others are completely disparate and distinct. Till the filing of this suit, the Defendant had no knowledge of
the existence of the Plaintiffs since their trades are different, disparate, distinct and disconnected. There is no similarity in the nature, character and performance of the products. The class of purchasers who are likely
to buy the goods bearing the marks they require, their education, intelligence and degree of care they are
likely to exercise in purchasing and/or using the goods, are not similar. The Plaintiffs and the Defendants do not belong the same market place. The Plaintiffs, being
giants, can afford to sell their goods on Credit, whilst the Defendant is strictly indulging in cash sales or credit for a few weeks only.
[C][ii] The two [2] products are different and distinct.
KSB's font is distinct, disparate and different from the KSB' font. KSB has a logo, whilst KSB does not have one. Most importantly, KSB is not into 'pumps and valves', whereas KSB is into 'Bearings' not used in KSB
pumps and valves. On enquiries, it is discovered that KSB sources its bearing requirements from SKF, FAG, NTN, Contra, KSB of the Defendant is nowhere in the picture. KSB is not registered in Class 12 which is meant
for manufacturers of bearings. KSB Germany needs to take action, if any, against Ningbo KSB, the parent company in China. There is a challenge to jurisdiction by the Defendant. The Plaintiffs should launch their suit/action against Ningbo KSB, China, in Chinese Courts. KSB Bearings are imported in India under Open General License [OGL] as no permission or License is
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required to import KSB bearings. KSB bearings are freely available all over the world, including India as the
Parent manufacturer from China is making it available to all Indian dealers."
17. These defences are meaningless, given that the two marks are identical and given the wide range of products on which the
Plaintiffs do use their mark. The Defendant claims to have obtained registration in Class 7. But the Plaintiffs also have prior registration under that very class, i.e., in respect of the very same goods. There
can be no question of the Defendant having legitimately obtained registration in Class 7 if there was a prior conflicting registration to
the Plaintiffs in that very class. Indeed, if there was ever a matter to recommend the immediate de-registration of a defendant's trade
mark, this is probably it. The case seems to mne to fall within the limited scope for cancellation afforded by the Full Bench decision of this Court in Lupin Ltd v Johnson & Johnson.17
18. Ms. Kshirsagar also submits that, in any case, even if an action in infringement does not lie, and which she does not concede, what the Defendant says is no answer at all to her case in passing off.
This is absolutely correct. After all, an action in passing off is an action in deceit. Oliver LJ in Reckitt & Colman Products Ltd v Borden Inc.18 first set out these three probanda in the tortious actions in
passing off that we now know as the 'Classic Trinity': (i) goodwill owned by a claimant; (ii) misrepresentation; and (iii) damage to that goodwill. The Classic Trinity places on a plaintiff the burden of proving goodwill in its goods or services, trade dress, brand, mark or
17 2015 (1) Mh. L. J. 501.
18 [1990] 1 All E. R. 873
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even the thing itself. A plaintiff must also show false representation
(it matters not that this is unintended) to the public that leads it to believe that the goods or services of the defendant are those of the
plaintiff. Fraud is not a necessary element.19 The test of deception or its likelihood is that of the common person. Here again, the similarity tests used in infringement actions have a role to play: a
court will look to the aural, visual and conceptual similarity. A plaintiff need not prove actual or special damage; a reasonably foreseeable probability is sufficient.
19. In my view, in this particular case, all three tests are more
than amply satisfied. There is no question that the attempt by the Defendant is clearly to trade on the reputation and goodwill
achieved by the Plaintiffs and to claim a common or sharing source, origin or provenance.
20. There then follows another defence in the Affidavit in Reply
which is that the Defendant imports KSB bearings from China under an Open General License. I do not see what difference this makes. If this is so, then the Defendant cannot claim to be the
proprietor of the trade mark KSB at all, and it is unclear on what basis he has then applied for registration of this mark in any class. The Defendant does not deny that his name appears on the
packages of the ball-bearings as a manufacturer. It appears prima facie to be a completely dishonest defence. It is one more reason, I would imagine, to direct the immediate de-registration of the Defendant's mark.
19 Laxmikant V. Patel v Chetanbhai Shah & Anr., AIR 2002 SC 275.
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21. The next submission taken on Affidavit by the Defendant is
that KSB, as a mark, is not registered in Class 12, which is meant for manufacturers of bearings. I must confess I do not know what to
make of this defence. It is the Defendant that claims to use the mark in relation to bearings, not the Plaintiffs. If there was anybody who needed registration in Class 12, assuming that that class relates to
bearings, it is the Defendant, not the Plaintiffs. But the Defendant does not admittedly have any registration in Class 12. He claims to have a registration in Class 7. The result, at least from the
Defendant's perspective is unfortunate. As a direct consequence of this submission, the Defendant is or must be deemed to be an
unregistered proprietor or user at least for the purposes of Section 29(4) of the Trade Marks Act, 1999 using dissimilar goods and,
therefore, liable to suffer an injunction. If, on the other hand, the Defendant persists in this claim in regard to bearings falling in Class 12, and given that his registration is only in Class 7, and if the
Defendant additionally claims that the goods both parties deal in are
the same, this too does not assist the Defendant because he would then be liable to suffer injunction under Sections 29(1), 29(2) and 29(3) of the Act. Thus, viewed from either perspective, this one
submission alone is sufficient to warrant the grant of an injunction.
22. The other defences are trivial. I only note them. The last of these is amusing. First, the Defendant says that the packaging and
class of consumers are different. That is hardly a relevant criterion in a matter such as this, and in any case it requires some proof, of which I have none. The Defendant then alleges that his name is distinctively printed on the boxes as a manufacturer. I can think of
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very little that could be conceivably worse as a defence when a mark
that is identical in every other respect is adopted.
23. Finally, the Defendant claims that the Plaintiffs are "Industrial Giants" whereas the Defendant is "indulging in cash sales only or credit for a few weeks". I have absolutely no idea what
this is supposed to mean except perhaps that it is not all right to commit an illegality or theft on a large scale but that it is perfectly acceptable to do so as some sort of small-scale industry. This kind of
submission needs only to be stated to be rejected.
24.
I went carefully through the Affidavit in Reply to see whether there was any evidence of actual use by the Defendant. I found
none. The Defendant claims to have an association with a Chinese company. He says that the Chinese company was the proprietor of the mark. Of this too, I found no material. There can be no question
of the Defendant being a prior user. There is no evidence of this
either.
25. Ms. Kshirsagar relies on the decisions in Aktiebolaget Volvo v
Volvo Steels Limited,20 SIA Gems and Jewellery Private Limited v SIA Fashion,21 H.M. Saraiya Ors v. Ajanta India Limited & Anr., 22 and Kalpataru Properties Private Limited & Anr. v Kalpataru Hospitality &
Facility Management.23 The law is well-settled and there can be no quarrel with the propositions she advances.
20 1998 PTC (18) (DB)
21 2003 (27) PTC 227 (Bom)
22 2006(33) PTC 4 (Bom.)
23 2011 (48) PTC 135 (Bom.)
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26. I see no reason to deny Ms. Kshirsagar reliefs in passing off,
to which she limits her application. There is a more than sufficient prima facie case and the balance of convenience certainly favours the
Plaintiffs. In this view of the matter, the Notice of Motion is made absolute in terms of prayer clause (b), which reads as follows:
"(b) that pending the hearing and final disposal of the suit, the Defendant by himself, his servants, agents, assignees, distributors and dealers be restrained by an Order and injunction of this
Hon'ble Court from manufacturing, selling, exhibiting for sale, marketing his goods/
products/ services bearing the impugned mark "KSB" and/or any other mark similar to the
Plaintiffs said registered marks "KSB" so as to pass off and/or enabling others to pass off the Defendant's goods and/or services as that of the Plaintiffs goods and/or services as and/or from
misleading the traders and members of the public into believing that the Defendant is in
some way connected/ associated with the Plaintiffs."
(G. S. PATEL, J.)
17th June 2016
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