Ksb Aktibengesellschaft And Anr vs Anil Agarwal
2016 Latest Caselaw 6370 Bom

                          KSB Aktiengesellschaft & Anr. v Anil Agarwal
                                   NMS1420-14-KSB-F2.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




                                          Page 1 of 16
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                           KSB Aktiengesellschaft & Anr. v Anil Agarwal
                                   NMS1420-14-KSB-F2.DOC




     A PPEARANCES




                                                                                    
     FOR THE PLAINTIFF               Dr. Birendra Saraf, with Ms. Pooja
                                           Kshirsagar, i/b Bharat Shah & Co..




                                                            
     FOR THE DEFENDANT               Mr. J. Udaipuri, i/b Udaipuri & Co.




                                                           
     CORAM                                                 : G.S.Patel, J.
     JUDGMENT RESERVED ON                                  : 24th October 2016




                                             
     JUDGMENT PRONOUNCED ON                                : 26th October 2016
     JUDGMENT:

1. This Motion was previously decided on 17th June 2016.1 I held in favour of the Plaintiff. The Defendant and his Advocate were absent. On 4th October 2016, at the Defendant's request, and on his

application, I recalled the order of 17th June 2016 and listed the

Notice of Motion for final hearing. On 24th October 2016, I heard Dr. Saraf for the Plaintiffs and Mr. Udaipuri for the Defendant at some length.

2. The Defendant having obtained registration of the rival mark, Dr. Saraf limits his relief to an injunction in passing off.

3. Both Plaintiffs are companies -- the 1st Plaintiff was incorporated in Germany, and the 2nd Plaintiff on 11th April 1960 in

1. There was, earlier, also an ad-interim order of 22nd September 2014, noting a statement by the Defendant that he would not use the offending mark in relation to any goods. That order has continued.

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India. The 1st Plaintiff controls a little over 40% of the 2nd

Plaintiff's equity. The 2nd Plaintiff is the 1st Plaintiff's licensee of the 1st Plaintiff in respect of the trade mark in question, the mark

"KSB". This is registered both as a word and as a label mark in many jurisdictions including several overseas jurisdictions. In India, the Plaintiffs have registrations of KSB in Classes 6, 7, 9, 11, 16, 37,

41 and 42. Within Class 7, the Plaintiffs have four distinct registrations on 9th October 1958, 24th October 1975, 26th September 1996 and 3rd September 1997. Worldwide, the Plaintiffs

claim use dating back to 1887. In India, their use dates back to 1960.

4.

The entries for Classes 7 and 12 in the Fourth Schedule to the Trade Mark Rules read:

"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."

5. In 1871, one Johannes Klein and two others, Schanzlin and Becker, formed a German company. The company's name was changed later to the present name, KSB, an acronym composed of

the first letters of the three founders' surnames. The 1st Plaintiff has been known as KSB in Germany for more than 130 years.2

2. Exhibit "B" to the Plaint, p. 36 contains a detailed corporate history.

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6. The 1st Plaintiff has a wholly-owned subsidiary in India

(another entity, not the Plaintiff ). This subsidiary holds a little over 40% of the 2nd Plaintiff's equity. The subsidiary's name is KSB

Tech (P) Limited. It was incorporated on 23rd November 2004. The 1st Plaintiff and its group or affiliate companies form a 65-entity conglomerate; all use the name KSB 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 respective corporate names.3

7. Since its incorporation in 1960, 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.4 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 lowercase "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.5 The relevant legal proceedings certificates are also annexed

3. A list of these 65 companies and the countries in which they are registered is set out in the plaint, paragraph 7, pp. 4-5.

4. Plaint, Paragraph 12, pp. 8-9.

5. Plaint, Exhibit "G18", p. 111; Plaint, Exhibit "G19", pp. 112-113; Plaint, Exhibit "G20", pp. 114-115.

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to the plaint.6 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 registrants of the domain name www.ksb.com.

8. As to the question of sales and promotional expenses, there can be no dispute either. The note tendered by Dr. Saraf shows that

the worldwide sales and promotions from 1960 to 2013 are 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.7 Thus, Dr. Saraf says, and I think

correctly, that the third peg required to gain recognition as a well- known mark is, in the case of the KSB mark, complete.

9. The Plaintiffs have been diligent in protecting their intellectual property rights. Annexure "2" to the Plaintiffs' note has a list of 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

6. Plaint, Exhibit "H1", p. 118; Plaint, Exhibit "H2", p. 121.

7. Notice of Motion paperbook, pp. 250-251; Rejoinder, Exhibit "10".

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Plaintiffs' case that KSB is an internationally well-known trade mark

with a presence in India.8 If there was any dispute about the Plaintiffs' mark being recognized as a well-known mark, it isput to

rest by the decision of Mr. Justice Rajiv Shakdher of the Delhi High Court in KSB Aktiengesellschaft & Ors. v KSB Global Limited.9 This was a final 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.

10. It seems that on 11th May 2010 the Defendant filed an application for registration of the trade mark KBS 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 Dr. Saraf that it is difficult to comprehend how

8. 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.

9. 2011 (45) PTC 103 (Del.)

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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 search of the register10 but also to do a market search.11 If he does not do so and an action is brought against him subsequently in

infringement, he cannot claim innocence.

11.

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.12 The Plaintiffs also issued a

cease-and-desist notice through their Advocates on 19th May 2014.13 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

10. Bal Pharma Ltd v Centaur Laboratories Pvt Ltd & Anr., 2002 (24) Petitioner 26 (Bom) (DB).

11. Gorbatschow Wodka KG v John Distilleries Ltd., 2011 (47) PTC 100 (Bom).

12. Plaint, Exhibit "L", pp. 132-133.

13. Plaint, Exhibit "I", p. 122-128.

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might once have had of being unaware of the Plaintiffs assertion of

their rights.

12. On the very day that the Plaintiffs' Advocates sent the cease- and-desist notice, the Defendant's rival mark KBS 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

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 2014.14 A reminder followed from the Plaintiffs' Advocates on 25th August 2014.15 This Suit was filed on 18th September 2014.

13. As I have noted, the Defendant claims that his mark is "different". The Defendant's mark is disclosed in the Additional Affidavit filed by the Plaintiff on 23rd September 2014.16 Other than

a slight difference in the font, there is no difference at all between

14. Plaint, Exhibit "J", p. 129.

15. Plaint, Exhibit "K", p. 130

16. Motion paper book, p.20.

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the Defendant's mark and the Plaintiffs'; only the second and third

letters seem to have been interchanged. 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 and visually the two are the same.

14. Mr. Udaipuri contends that the two product lines are entirely

different and no customer would be cast into a state of wonderment. He also says that the two marks are dissimilar. I am unable to accept

either of these contentions. First, the marks are not dissimilar at all. The Defendant uses the same three letters and only flips the second

and third. It is not insignificant that the Defendant is not himself a manufacturer but merely an importer from a Chinese manufacturer that uses this mark. That is no answer; indeed it raises far more

questions than it answers because it posits that the Defendant

himself is not the true proprietor of the rival mark but merely a dealer.

15. Mr. Udaipuri's contention of the dissimilarity in product lines will also not assist him. He says 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

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is set out in paragraphs C(i) and C(ii) of the Affidavit in Reply to the

Notice of Motion.17 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 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

17. Notice of Motion paperbook, pp. 21-23.

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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

KBS' font. KSB has a logo, whilst KBS does not have one. Most importantly, KBS is not into 'pumps and valves', whereas KBS 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, KBS 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 KBS, the parent

company in China. There is a challenge to jurisdiction by the Defendant. The Plaintiffs should launch their suit/action against Ningbo KBS, China, in Chinese Courts. KBS Bearings are imported in India under Open

General License [OGL] as no permission or License is required to import KBS bearings. KBS bearings are freely available all over the world, including India as the Parent manufacturer from China is making it available to all Indian dealers."

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16. These defences are meaningless, given the similarity between

the two marks and given the wide range of products on which the Plaintiffs do use their mark. The jurisdictional challenge is without

substance and not taken as one under Section 9A of the Code of Civil Procedure, 1908. Even if it were, it would fail the preliminary threshold test: the action is against the Defendant's use of the rival

KBS mark in India. This defence does not reconcile with the Defendant's application for registration of the rival mark either. As to the dissimilarity or similarity in goods, I imagine this is fully

covered by Sections 29(2) and 29(4) of the Trade Marks Act, 1999, especially given the Plaintiffs' established transborder reputation as

a well-known mark and its presence and use in India since 1960.

17. 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 me to fall within the limited scope for cancellation afforded by the Full Bench decision of this Court in Lupin Ltd v Johnson & Johnson.18

18. Even if an action in infringement does not immediately lie, and which Dr. Saraf does not concede, what the Defendant says is no answer at all to the Plaintiffs' case in passing off. An action in

18. 2015 (1) Mh. L. J. 501.

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passing off is an action in deceit. Oliver LJ in Reckitt & Colman

Products Ltd v Borden Inc.19 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 even the thing itself. A plaintiff must also show false representation, even 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.20 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. In my view, 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.

19. As to Mr. Udaipuri's case that the Defendant imports KBS 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 KBS 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

19. [1990] 1 All E. R. 873

20. Laxmikant V. Patel v Chetanbhai Shah & Anr., AIR 2002 SC 275.

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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.

20. The next submission by Mr. Udaipuri is that the Plaintiffs'

mark is not registered in Class 12, meant for bearings. But neither does the Defendant, and it is the Defendant who claims to deal in imported bearings. The Defendant only has a registration in Class

07, where the Plaintiffs have a prior registration, and which makes the Defendant's registration ex facie vulnerable. The direct result is

that the Defendant is an unregistered proprietor or user in class 12 for the purposes of Section 29(4) of the Trade Marks Act, 1999

using dissimilar goods and, therefore, liable to suffer an injunction.

21. 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 07, and if the Defendant additionally claims that the goods both parties deal in are the same, this too does not assist the Defendant because his registration would be liable to cancellation;

and with that finding, he must, in the meantime, suffer an 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. As to the difference in class of consumers, this is merely stated without any evidence whatever. Mr. Udaipuri's contention about the relative sizes of the Plaintiffs vis-à-vis the Defendant, an

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attempted Goliath vs David portrayal, is, unfortunately, some

distance from the Biblical result.

23. Dr. Saraf relies on the decisions in Aktiebolaget Volvo v Volvo Steels Limited,21 SIA Gems and Jewellery Private Limited v SIA Fashion,22 H.M. Saraiya Ors v. Ajanta India Limited & Anr.,23 and

Kalpataru Properties Private Limited & Anr. v Kalpataru Hospitality & Facility Management.24 The law is well-settled and there can be no quarrel with the propositions set out in these precedents.

24. There is an ample prima facie in passing off. Having,

therefore, considered Mr. Udaipuri's submissions afresh, I see no reason to deviate from the view I took in my earlier order of 17th

June 2016. Mr. Udaipuri's submissions have brought forth nothing new or which persuades me to a different result.

25. There will be an interim order 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

21. 1998 PTC (18) (DB)

22. 2003 (27) PTC 227 (Bom)

23. 2006 (33) PTC 4 (Bom.)

24. 2011 (48) PTC 135 (Bom.)

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"KBS" 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."

26. The Notice of Motion is made absolute in these terms. Given

that I have afforded the Defendant this extraordinary indulgence, there will also be an order of costs.

(G. S. PATEL, J.)

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