Usco S.P.A. And Anr vs Twin Parts Pvt. Ltd. And Ors
2023 Latest Caselaw 1457 Cal/2

OCD-3


                            IA NO. GA 1 OF 2023
                              CS NO.87 OF 2023
                     IN THE HIGH COURT AT CALCUTTA
                   ORDINARY ORIGINAL CIVIL JURISDICTION
                                  ORIGINAL SIDE
                             (COMMERCIAL DIVISION)



                           USCO S.P.A. AND ANR.
                                    VS.
                       TWIN PARTS PVT. LTD. AND ORS.

BEFORE:
The Hon'ble JUSTICE ARINDAM MUKHERJEE

Date : 3rd July, 2023.

Appearance:

Mr. RanjanBachawat Sr. Adv.

Mr. SayantanBasu, Adv.

Mr. Tanmoy Roy, Adv.

Mr. Manoj Gupta, Adv.

Ms. Ragini Ghosh, Adv.

Ms. TonoyaGhose, Adv.

For plaintiffs Mr. ShuvasishSengupta, Adv.

Ms. Nabanita De, Adv.

For defendant nos. 1,3 & 4 Mr.Sumit Mishra, Adv.

Mr. Rudraman Bhattacharya, Adv.

For defendant nos. 2 & 5

The Court: The plaintiff no.1 company was incorporated with the name

"USCO" S.P.A under the relevant laws of Italy in the year 1989. The plaintiff no.1

is a manufacturer and distributor of spare parts for Earth Moving Machines etc.

The product of the plaintiff no.1 includes repair parts, under carriage products

including chains, shoes, rollers, sprockets, idler and segments etc. The plaintiff

no.1 has been selling its product through plaintiff no.2 by engaging a chain of

dealers and distributors in India. The plaintiff No.2 was incorporated in March,

2006 in Dubai. The plaintiffs say that their mark "ITR" is a registered mark. The

registration whereof was applied in India in 2007 and registered in 2009. The

plaintiffs while selling the products of the plaintiff no.1 have got their goods

identified with the mark "ITR" associated with the word USCO, by mentioning the

word "USCO" in their invoices as also brochures and pamphlets used and

utilised by its dealers and distributors. In fact, from the photographs annexed to

the petition, it can be clearly seen that Earth Moving Vehicles have displayed

therein as "Made in USCO" (please refer to page 662 of the petition in Volume V

thereof).

It is also the case of the plaintiffs that the defendant no.1 is a company

wherein the defendant nos. 4 and 5 are the directors. The defendant no.3 is a

limited liability partnership wherein the defendant nos.4 and 5 are the partners.

The defendant no.2 is a proprietary concern of defendant no.5.

It is clear according to the plaintiffs from various pages and, in particular,

page 808 of the application in Volume VI that defendant no.2 was an authorised

distributor of plaintiffs and had been selling their product under the registered

mark "ITR" with USCO Company specifically displayed therein. In fact, the

invoices raised by the plaintiffs which will appear from page 169 in Volume II of

the petition as also 461 onwards in Volume IV of the petition that the word

"USCO" has been clearly displayed in the invoices raised by the plaintiffs ever

since 2007. Thus, all the defendants were at least from 2007 were aware of

plaintiffs' mark "USCO" and "ITR".

It is the further case of the plaintiffs that the defendants who were

primarily dealers and distributors of the plaintiffs usurped the mark "USCO" and

got the same registered in 2019 upon having applied for registration in 2018.

The defendants have also applied for a deceptively similar mark by the

name "IITR" with the identical design and same colour combination. The

plaintiffs say that by selling goods under the mark "IITR" which is deceptively

similar to the plaintiffs registered mark "ITR". The defendants have by selling

identical products infringed the plaintiffs mark "ITR". The plaintiffs also say that

the registration as to "USCO" obtained by the defendant no.1 in 2019 is

registration of the label and not the mark by the name "USCO". Although,

subsequently that is in 2021 plaintiffs applied for registration of the word

"USCO" as its mark which was registered in 2023. The plaintiffs are the prior

user of the mark "USCO" and by such use over the years have got their products

identified in the market by such mark. The use of "USCO" mark by the

defendants apart from infringement has also led to a passing off action by the

defendant.

The plaintiffs have referred to Sections 27, 28(3) and 29(5) of the Trade

Marks Act, 1999 (hereinafter referred to as the 1999 Act) to demonstrate as to

the infringement and passing off action. The plaintiffs say that in view of the

provisions of Section 29(5) even if the plaintiffs had sold its products identified

with the name "USCO" since "USCO" was its company name; there is

infringement by the defendant no.1 though it had got the "USCO" mark

registered in 2019. The prior user of the mark "USCO" which will be apparent

from the documents, according to the plaintiffs is clear infringement in view of

the provisions of Section 29(5) of the 1999 Act. Passing off is also established.

The plaintiffs also say that assuming without admitting that "USCO" is a

registered mark of the defendant no.1 then at the highest the defendants can get

a protection under the provisions of Section 28(3) of the 1999 Act, but the same

is not available in the instant case due to prior user and the provisions of section

29 (3) of the 1999 Act. That apart and in any event, only the label "USCO" has

been gotten registered by the defendant no.1 which according to the plaintiffs

does not extend any protection to the defendant under the provisions of Section

28(3) in view of the provisions of Section 29 (5) of the 1999 Act.

The plaintiffs in support of their contention have relied upon the

judgments reported in 2004(3) SCC 90 (Midas Hygiene Industries Pvt. Ltd. &

Ors. Vs. Sudhir Bhatia & Ors.), AIR 2002 SC 275(Laxmikant V. Patel Vs.

Chetanbhat Shah & Ors) and 2007 (6) SCC 1(Heinz Italia & Ors Vs. Dabur

India Ltd.).

The plaintiffs admittedly came to know about the use of the mark "USCO"

by the defendants to sell their product representing them as those originating

from the plaintiffs. The plaintiffs immediately thereafter have caused notices to

be issued through their dealers/distributors and subsequently directly by them

requesting the defendants to cease and desist from infringing and passing off the

plaintiffs goods. The plaintiffs, therefore, say that they were diligent in pursuing

their case. After the cease and desist notice the defendant no.1 stopped selling

their products for the time being but later on has again appeared in the market

with identical products to that of the plaintiffs to sell them by either infringing

the plaintiffs registered mark or by way of passing off. The plaintiffs say that

delay in praying for injunction in a case of infringement or passing off action is

not fatal as held by a Division Bench of this Court in the judgment reported in

AIR 1998 Cal 261 (Allergan INC vs Milment Oftho Industries and Ors.) when

the plaintiffs have taken all diligent stops and requested the defendants to cease

and desist. The plaintiffs, therefore, say that the defendants and each of them,

their servants, agent should be restrained from infringing the plaintiffs registered

marks as also passing off the product of the defendants as that of the plaintiffs

by way of temporary injunction and ad-interim orders in terms thereof as prayed

for in this application.

Responding to the submissions made by the plaintiffs, the defendant

nos.1, 3 and 4 being represented by one set of advocate and the defendants nos.

2 and 5 being represented by another set of advocates in harmony allege that the

goods sold by the plaintiffs were never under the mark "USCO". They were sold

under the mark "ITR". The defendant no.1 had applied for registration of its mark

"IITR". The registering authority has objected to such registration and, as such,

the application is pending. The defendant no.1 has never sold any of its products

under the mark "IITR". "USCO" is not a mark of the plaintiffs. The defendant

No.1 is a registered owner of the mark "USCO" and also has prior user in respect

thereof. Thus there is no infringement or passing off action against the

defendants in the facts of the case.

It is also the case of the defendants that "USCO" is a registered mark of the

defendant no.1. It has been registered prior to the plaintiffs obtaining registration

of the mark "USCO". The defendants have long been selling their products

identified under the mark "USCO" and have developed substantial reputation as

also generated a sizeable amount of business by selling their products under the

mark "USCO". The plaintiffs, therefore, cannot seek an injunction alleging

infringement of the mark "USCO" in view of the provisions of Section 28(3) of the

1999 Act. The defendants say assuming without admitting that there has been a

passing off action in the form of selling defendants product under the mark

"USCO" due to alleged prior user by the plaintiffs even then there has been a long

delay i.e. from 2019 when the plaintiffs admittedly came to know about the

defendants selling their product under the name "USCO" the suit was ultimately

instituted in 2023 after about 4 years. The delay, therefor, takes away the

plaintiffs right to claim injunction either for infringement or for passing off. The

defendants no. 1, 3 and 5 in support of their contention have cited two

judgments respectively reported in 2016 (2) SCC 683 (S. Syed Mohideen-

versus- P. Sulochana Bai) and 2018 (2) SCC 1 (Toyota Jidosha Kabushiki

Kaisha v. Prius Auto Industries Limited and Others). The defendants no. 2 &

5 have cited a Division Bench Judgment of the Delhi High Court reported in

2017 SCC Online Del. 7392 and a Single Bench judgment of this Court

reported in 2019 SCC Online Cal. 9130 (Shyam Steel Industries Ltd. v.

Shyamsel& Power Limited and Another).Relying upon these two judgments,

the defendants have tried to distinguish the sale by the plaintiffs under the name

"USCO" at the highest be a brand name and cannot be plaintiffs mark which

calls for an infringement action when the mark of the defendants are registered.

The defendant nos. 2 & 5 also highlights the delay aspect in the plaintiffs

approaching the Court for injunction.

The defendants also say that the judgment in Allergan (supra) was

delivered in the context of pharmaceutical products which likely to have public

interest involved therein which is absent in this case concerning spare parts.

The defendants have also argued that there has been no trans-border

business/sale of the plaintiffs' product by the mark "USCO" prior to the

defendants selling their product under the mark "USCO" and as such any

passing off action also does not lie against the said defendants. The defendants,

therefor, should be given an opportunity to contest by filing affidavits.

In reply the plaintiffs say that the goods of the plaintiffs were all along

available in the Indian market ever since 2007 and in fact the defendants had

been their dealer or distributor. Unless it is established beyond doubt that the

goods were not available in the Indian market, the question of trans-border sale

and business would have arisen which is not in the instant case. The plaintiffs

also say that the delay aspect has no consequence if infringement and passing off

has been established. In the instant case, prima facie, from the documents as

also from the admission of the defendants, the infringement and passing off are

established. The defendants have not only sold goods under the mark "IITR",

"USCO" but have also used the e-mail ID as usco.co.in. By referring to page 78

of the application the plaintiffs demonstrate such use of email Id by defendant

No.4. The plaintiffs, therefore, say that this is a clear case of infringement and a

fit case where the defendants are required to be restricted by orders of

injunction.

After hearing the parties and considering the judgments cited at the bar, I

find that in case of a passing off action, the triple test laid down in Reckitt &

Colman Products vs. Borden Inc. reported in 1990 (1) All ER 873 is the

accepted principle. The three tests are as follows:-

"..... The law of passing off can be summarised in one short general proposition, no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labelling or

packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely on a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Third, he must demonstrate that he suffers or in a quiatimet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff".

In Toyota Jidosha (supra) the Hon'ble Supreme Court was faced with the

issue of likelihood of confusion or real/actual confusion. The Division Bench of

Delhi High Court in Toyota Jidosha (supra) took the view that likelihood of

confusion is required to be satisfied only in a quia timet action and actual

confusion will have to be pressed when the suit or claim is being adjudicated

finally. The Hon'ble Supreme Court in this perspective held that once the

claimant who has brought the action of passing off establishes his goodwill in the

jurisdiction in which he claims that the defendants are lying to pass off their

goods under the brand name of the claimant's goods, the burden of establishing

actual confusion as distinguished from possibility thereof ought not to be

fastened on the claimant. The Hon'ble Supreme Court has further held in that

case;

"The possibility or likelihood of confusion is capable of being demonstrated with reference to the particulars of the mark or marks, as may be, and the circumstances surrounding the manner of sale/marketing of the goods by the defendants and such other relevant facts. Proof of actual confusion, on the other hand, would require the claimant to bring before the Court evidence which may not be easily forthcoming and directly available to the claimant. In a given situation, there may be no complaints made to the claimant that goods marketed by the defendants under the impugned mark had been inadvertently purchased as that of the plaintiff claimant. The onus of bringing such proof, as an invariable requirement, would be to cast on the claimant an onerous burden which may not be justified. Commercial and business morality which is the foundation of the law of passing-off should not be allowed to be defeated by imposing such a requirement. In such a situation, likelihood of confusion would be a surer and better test of proving an action of passing-off by the defendants. Such a test would also be consistent with commercial and business morality which the law of passing-off seeks to achieve. In the last resort, therefore, it is preponderance of probabilities that must be left to judge the claim".

The principles expounded by the Hon'ble Supreme Court as to a quia timet

action has been summarised in the judgment reported in 2000 (4) SCC 50

[Kuldip Singh vs. Subhash Chander Jain& Ors]. In paragraphs 6 to 8 thereof,

the Court observed this;

"6. A quiatimet action is a bill in equity. It is an action preventive in nature and a specie of precautionary justice intended to prevent apprehended wrong or anticipated mischief and not to undo a wrong or mischief when it has already been done. In such an action the court, if convinced, may interfere by appointment of receiver or by directing security to be furnished or by issuing an injunction or any other remedial process. In Fletcher v. Bealey [(1885) 28 Ch D 688 : 54 LJ Ch 424 : 52 LT 541] , Mr Justice Pearson explained the law as to actions quiatimet as follows:

"There are at least two necessary ingredients for a quiatimet action. There must, if no actual damage is proved, be proof of imminent danger, and there must also be proof that the apprehended damage will, if it comes, be very substantial. I should almost say it must be proved that it will be irreparable, because, if the danger is not proved to be so imminent that no one can doubt that, if the remedy is delayed the damage will be suffered, I think it must be shown that, if the damage does occur at any time, it will come in such a way and under such circumstances that it will be impossible for the plaintiff to protect himself against it if relief is denied to him in a quiatimet action".

"7.Kerr on Injunctions (6th Edn., 1999) states the law on "threatened injury" as under:

"The court will not in general interfere until an actual nuisance has been committed; but it may, by virtue of its jurisdiction to restrain acts which, when completed, will result in a ground of action, interfere before any actual nuisance has been committed, where it is satisfied that the act complained of will inevitably result in a nuisance. The plaintiff, however, must show a strong case of probability that the apprehended mischief will in fact arise in order to induce the court to interfere. If there is no reason for supposing that there is any danger of mischief of a serious character being done before the interference of the court can be invoked, an injunction will not be granted".

"8. In our opinion a nuisance actually in existence stands on a different footing than a possibility of nuisance or a future nuisance. An actually- existing nuisance is capable of being assessed in terms of its quantum and the relief which will protect or compensate the plaintiff consistently with the injury caused to his rights is also capable of being formulated. In case of a future nuisance, a mere possibility of injury will not provide the plaintiff with a cause of action unless the threat be so certain or imminent that an injury actionable in law will arise unless prevented by an injunction. The court may not require proof of absolute certainty or a proof beyond reasonable doubt before it may interfere; but a strong case of probability

that the apprehended mischief will in fact arise must be shown by the plaintiff. In other words, a future nuisance to be actionable must be either imminent or likely to cause such damage as would be irreparable once it is allowed to occur. There may be yet another category of actionable future nuisance when the likely act of the defendant is inherently dangerous or injurious such as digging a ditch across a highway or in the vicinity of a children's school or opening a shop dealing with highly inflammable products in the midst of a residential locality".

This view has been accepted and approved by the Hon'ble Supreme Court

in the judgment reported in 2020 (7) SCC 275 [Ratnagiri Nagar Parishad vs.

Gangaram Narayan Ambekar& Ors.].

The injunction against infringement of a mark on the other hand requires

much less scrutiny than that in case of passing off. A mark is a proprietary right

of the registered holder. A person can also claim such right if the claimant is

able to prima facie establish that the mark identifies his goods and services in

the market in course of trade. If a claimant is not the registered owner then

under the provisions of Section 27 of the 1999 Act, an infringement action does

not normally lie. In such case, passing off action will lie, if the claimant is able to

satisfy the tests laid down and discussed hereinabove.

The Court in case of infringement has to consider the parameters laid

down for granting injunction under the Specific Relief Act, 1963 as modulated by

provisions of Order 39 Rule 1 and 2 of the Code of Civil Procedure, 1908 (in short

CPC). Section 34 of the Specific Relief Act gives right to a party complaining of

his / her right or legal character being infringed, to seek a declaration of his right

as also injunction to prevent infringement of the same. The Court has to deal in

the same lines as in Sections 36, 37, 38 and 39 of the 1963 Act. The Court has

to be satisfied with the prima facie case made out by the claimant, the balance of

convenience and inconvenience, irreparable injury and multiplicity of judicial

proceedings. The delay as in case of injunction and infringement of trade mark

is often held to be not fatal to refuse injunction like in the case of infringement of

other rights.

By applying the aforesaid settled principles to the facts of the instant case

it appears that the plaintiffs have produced documents to show that the plaintiff

No.1 was incorporated in 1989. The plaintiff No.1 has also shown its products

being sold in India at least from 2007. The mark "ITR" is a registered mark

under class 7 (device) of the 1999 Act ever since 2009, pursuant to the

application for registration being made in 2007. The plaintiffs have also been

able to show that the product of the plaintiff No.1 with the mark "ITRR" is being

sold in the market with the identity of products originating from USCO Company.

USCO is the company name of the plaintiff No.1. The word "USCO", therefor, has

been associated with the goods sold by the plaintiffs in West Bengal and other

parts of India. Although USCO was not the registered mark of the plaintiff but

the association of word USCO company with the plaintiffs' products sold under

the registered mark "ITR" has been a feature of identification of the plaintiffs'

goods. It is to be treated that goods with "ITR" mark originating from USCO

company are the products of the plaintiff. That apart in any event the manner in

which the plaintiffs' goods are sold in the market has made USCO a word mark

associated with plaintiffs' goods. The public at large while purchasing the

plaintiffs' goods identify them with the trade mark "ITR" always intend to

purchase such goods which originate from USCO Company i.e., plaintiff no. 1.

The defendants, on the other hand, were either a dealer or distributor of

the plaintiffs' goods till up to 2017. The defendants were all along aware that the

plaintiffs' goods are sold with the mark "ITR" and identified as product of USCO

company. The defendants initially applied for having a mark "IITR" registered in

their name in 2017 when "ITR" had already been registered by the plaintiffs as

their mark in 2009 and the plaintiffs were selling their goods with such mark.

The goods originating from the plaintiffs with such mark with clear description

that the same came from USCO Company was in the Indian market long before

the defendants applied for registering the mark "IITR". Even the defendants had

no prior user of the mark "IITR" as will appear from their application for

registration made in 2018 wherein it has been specifically stated as "proposed

user". The mark "IITR" was however, not registered due to the objection raised

by the registering authority on the ground that the same is deceptively similar to

marks already registered. On a bare comparison of the registered mark "ITR"

and "IITR" the deceptive similarity is apparent. The logo, the font, the colour

combination of "IITR" is likely to confuse a customer with ordinary produce who

is looking for goods with "ITR" mark and originating from USCO company. On

being unsuccessful to have the mark ("IITR") registered the defendants applied

for rectification of their application to have the mark USCO registered against

their name of defendant no. 1. The rectification application was made in 2018

and the registration was obtained in 2019. Even while the defendants applied for

rectification to have the mark USCO registered in their name, the defendants had

no prior user of the said mark as in their rectification application it has been

categorically stated that they are "proposed user" of the mark "USCO". The

conduct of the defendants is per se suspicious. The defendants knowing fully

well that "ITR" being a registered mark of the plaintiffs attempted to have their

mark "IITR" with deceptive similarity to be registered. On being unsuccessful, the

defendants knowingly that the plaintiffs' products are identified as originating

from USCO company got the USCO mark registered for the same class of goods

and services.

The intention of the defendants, therefor prima facie cannot be considered

to be bona fide. The defendants knowingly attempted to infringe the registered

mark of the plaintiffs. The defendants also attempted to pass off their goods as

that of the plaintiffs by attempting to sell similar if not identical products with

the mark "USCO".

The test laid in Reckitt and Colman (supra) have been prima facie fulfilled

by the plaintiffs so far as use of "USCO" company while selling their products. It

is beyond doubt that similar if not identical products with USCO mark on being

sold by the defendants is likely to deceive public at large. That apart, the word

USCO as a word mark or brand name has become synonymous with the

plaintiffs' product. It has therefor, become a part of the mark of the plaintiffs for

which the plaintiffs' application for registration has been allowed under Classes

7, 12 and 35 as contained in the 1999 Act despite "USCO" stood registered in the

name of the defendant no. 1. The plaintiff, therefor, is entitled to the benefits

under Section 29 (5) of the 1999 Act apart from having made out a case of

passing off.

The attempted infringement and passing off action is prima facie proved.

At the interlocutory stage following the principles of quia timet action, the

plaintiff is entitled to an injunction. This is moreso required to prevent the

apprehended mischief. The plaintiff has also made out a strong prima facie case,

the balance of convenience and inconvenience is in favour of the plaintiffs.

Injunction if refused at this stage will cause irreparable injury to the plaintiffs

and also lead to multiplicity of judicial proceedings. The conduct of the

defendants as aforesaid also warrant passing off temporary orders of injunction

as against the defendants.

The defendants are not entitled to the benefit of Section 28 (3) due to their

conduct and in view of the fact that the goods of the plaintiffs being identified

and sold in the Indian market with name USCO Company as their origin.

The delay aspect which has been raised by the defendants to resist the

order of injunction is also not a ground to refuse injunction at this stage once

infringement and passing off are prima facie established. The plaintiffs have all

along been diligent and have taken necessary steps. It cannot be said that the

plaintiffs slept over their right and consciously allowed the defendants to sell

identical product with the mark USCO. The plaintiffs' goods were all along

available in the Indian market with the identification as aforesaid. In any event

as held in Allergan (supra), if the infringement is established delay does not

stand in the way of granting injunction. The passing off action is also established

in the facts of the case which entitles the plaintiff to get an order of temporary

injunction.

So far as other judgements cited at the bar on behalf of the plaintiffs and

the defendants are concerned, I do not wish to deal with them individually as

neither the plaintiffs nor the defendants have disputed the ratio laid down

therein. But have tried to distinguish them by applying the legal proposition to

the facts of the case.

In the aforesaid facts and circumstances, the defendants each one of them

their servants, agent and / or assign be restrained by an order of temporary

injunction from selling any goods similar and/or identical to those of the

plaintiffs either by use of the mark "IITR" or with the mark USCO in any manner

whatsoever, till 31st August, 2023 or until further order whichever is earlier.

The matter requires further scrutiny for the other prayers made by the

plaintiffs which is possible only after inviting affidavits.

Let affidavit in opposition be filed by 26th July, 2023. Reply, if any thereto

by 14th August, 2023.

Let this matter appear in the list on 21st August, 2023 under the heading

"Adjourned Motion".

(ARINDAM MUKHERJEE, J.)

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