Dolphin Laboratories Ltd. vs Arun Kumar Bansal And Others
1995 Latest Caselaw 178 Del

JUDGMENT

Devinder Gupta, J.

1. In the first application (I.A. 9739/94), the plaintiff prays for an injunction during the pendency of the suit restraining the defendants from using the word "Dolphin" or any other word deceptively/confusingly similar thereto as a part of the trade/corporate name of defendant No. 4 and by the other application (I.A. 1268/95), a prayer has been made by the plaintiff for restraining the defendants from raising money from the public under the impugned corporate name "Dolphin" and to stay their proposed public issue opening on 28th February, 1995.

2. The plaintiff has filed the suit for injunction to restrain infringement of registered trade mark and passing off its trade/corporate name and rendition of accounts etc. It is alleged that plaintiff Dolphin Laboratories Ltd. is a well known and reputed public limited company engaged since 1951, in the business of manufacturing and making of various types of drugs and pharmaceutical products. Its registered office is at Calcutta with branches in Bombay and Ahmedabad and sales offices in Calcutta, Hyderabad, Patna, New Delhi, Lucknow and Ahmedabad.

3. It is alleged that the plaintiff was incorporated on 9th July, 1951 & in 1952 it adopted its present corporate name (Dolphin Laboratories Ltd.). The range of products which the plaintiff manufactures/mercantise, inter alia, covers anti-biotics, anti haemorrhagics, haemostatics, lipotropic drugs, appetite stimulants, natural enzymes and amoebicides. Plaintiff claims that it is the proprietor of more than 100 trade marks including "Dolphin" which is also the house mark of the plaintiff. Considerable amount has been spent over the years towards sale promotional activities to acquaint the medical trade and profession with its developments and innovations and in all such activities the word "Dolphin" the corporate name, trade mark and house mark of the plaintiff has prominently been identified. Plaintiff's turn over exceeds Rs. 22 crores. The word "dolphin" constitute the key name and distinguishing feature of the plaintiff's corporate name duly registered with the Registrar of Companies and is use in the course of trade continuously for the last 42 years. As a result of the plaintiff's effort, in the course of trade the word "Dolphin"has become distinctive and exclusively identified with the plaintiff. Dolphin as trade mark and Dolphin as device is duly registered under Class 5 of the Trade and Merchandise Marks Act, 1958, (hereinafter referred to as "the Act").

4. The plaintiff also alleges that an application for recording its name as proprietor of mark "Dolphin" in Class 10 of the Fourth Schedule of the Act is pending. By virtue of wide spread use the plaintiff's mark/name "Dolphin" has become inextricably linked with the plaintiff in the eyes of the consumers and the pharmaceutical trade and the consumers associate the said mark/name exclusively with the plaintiff. The plaintiff is registered proprietor altogether of more than 100 trade marks, many of these trade marks have the prefix "Dolphin". In order to partly finance its activities, the plaintiff in the month of May, 1994 entered the capital market with a public issue of 18,25,000 equity shares aggregating to Rs. 3,65,00,000/- which was over subscribed by 77.80 times by the Indian Public and 5.26 time by non-resident Indians. It reflects on the reputation and goodwill enjoyed by the plaintiff and the level of public confidence. The plaintiff also claims that it has pioneered the introduction of several drugs in India, including Ethansylate formulation (a haemostatic drug) and Amoxycillin, (a broad spectrum anti-biotic). The plaintiff also enjoys 40% market share in India of anti-hemorrhages medicines administered for the purpose of controlling bleeding. Plaintiff claims that its share are widely held by more than 12,000 share holders in India abroad and are listed and traded in Calcutta, Bombay and Ahmedabad Stock Exchanges. The plaintiff is a profit making dividend paying company and has successful track record and commands an excellent image in the pharmaceutical trade.

5. It is stated that for the first time the plaintiff learnt in 1993 the existence of a company with the name 'Dolphin Organics Limited'. Cease and desist notice to the said company was sent by registered post by the plaintiff's trade mark Attorney on 14th July, 1993, which was received at the defendants' office but no reply was received. On 14th August, 1994, when it was reported to the plaintiff on the basis of reports circulating in the trade circle in Delhi, that Dolphin Organics Limited was proposing to start commercial operations to manufacture, market and sell bulk drugs and pharmaceutical products, steps were taken by the plaintiff to send notices on 29th August, 1994, on the new address of the defendants. Despite notice, no response was received. Again a notice was sent on 5th October, 1994 but the defendants have chosen not to the same. It is alleged that defendant No. 1 has set up and/or is in the process of setting up its factory under the impugned name of Dolphin Organics Limited to manufacture bulk drugs and Pharmaceuticals. The plaintiff has also received from its business associate, namely, M/s. Gujarat Lyka Organics Ltd., bombay a copy of a letter dated 12th February, 1993 written and signed by defendant No. 1 seeking some business information information regarding bulk drug plant of antibiotics. It is claimed by the plaintiff that impugned corporate name or trading style of the defendant with the word "Dolphin" forming the key part in a business similar to that of the plaintiff is deceptively similar to the corporate name of the plaintiff. Such an adoption by the defendant is dishonest and is with the object to trade upon the goodwill and reputation attached to the word "Dolphin" belonging to the plaintiff and is bound to cause deception and confusion in the mind of the consumers and the persons connected with the pharmaceutical trade as regards the identity of the defendant. By the use of the word "dolphin" as the main and substantial part of its corporate name, defendant No. 1 is attempting to pass off its business as that of the plaintiff. In this background injunction is sought by the plaintiff restraining the defendant from using the Word "Dolphin".

6. Along with the suit, the plaintiff filed an application (I.A. 9737/94) seeking temporary injunction. Summons in the suit and notice of the application was given to the defendants. After the defendants had been served, another application (I.A. 1268/95) was moved by the plaintiff on 13th February, 1995, alleging that on 10th February, 1995, the defendants had brought out an announcement/advertisement in the Economic Times that they are bringing about a public issue of their shares which opens on 28th February, 1995, inviting public to subscribe to shares. The size of the issue is Rs. 212 lakhs. Plaintiff states that since the word "Dolphin" is identified by the public with the plaintiff, which has been using the word as key part of its corporate name since 1951, use of the same word "Dolphin" by defendant No. 4 as a part of its corporate name is dishonest and is an infringement of plaintiff's registered trade mark. In order to protect the public interest as well to vindicate the legal rights of the plaintiff, it is imperative that public issue of defendant be restrained during the pendency of the suit.

7. The defendants have filed their written statement and a reply to both the applications. Number of preliminary objections have been raised by the defendants as regards the valuation and territorial jurisdiction to entertain and try the suit. It is stated that defendant has no business activity in the Union Territory or Delhi and suit is based on forged documents. The suit has not been filed by a duly authorised person on behalf of the plaintiff. The defendant has denied the plaintiff's version as regards its incorporation and being a proprietor of registered trade mark "Dolphin". the defendant has also denied for want of knowledge the plaintiff's allegations as regards the goodwill and reputation of the plaintiff or plaintiffs having come out with a public issue in the year 1994. The defendant has not disputed the receipt of various notices sent by the plaintiff to the defendant but has denied the plaintiff's version that it has the exclusive right to use the word "Dolphin". According to the defendant, the word "Dolphin" is a common name of a sea Mammal and no one can claim an exclusive right over the word "Dolphin". It can be used by all and sundry. The defendants state that they are in the process of making bulk drug formulation meant only for the drugs manufacturing companies. The defendants are not selling it directly to the public and retail consumers under the name "Dolphin". The defendants have and had no intention to take/and cash upon the goodwill and reputation of the plaintiff or attaching to the word "Dolphin" since the defendants are in the process of making bulk drugs which are only meant for drugs companies and not for the general consumers. According to defendants, there is no question of misleading or misrepresenting the innocent investors while bringing out its issue for subscription by the defendants to the general public. Due notice has been given to the general public of the pending litigation in this case. It is submitted that no loss or harm is likely to be caused to the plaintiff in case injunction is not granted. Both the parties have taken me through the documents and number of decisions on the point.

8. Plaintiff has placed on record a copy of certificate of its incorporation copies of the two certificates for registration trade mark "Dolphin" have also been placed on the record to the effect that the trade mark "Dolphin" has been registered in para A of the Register in the name of plaintiff in class 5. In addition there is a copy of assignment deed made between Dolphin Chemicals and the plaintiff by which the former has assigned in favor of the later the trade mark "Dolphin". Cuttings from the financial Express, Business Standard, Amrit Bazar Patrika, Economic Times have been placed on record by the plaintiff, the support of its version in having come out with the maiden public issue which was over subscribed 77.8 times by Indian public and N.R.I's. 5.26 times. Copies of notices served upon the defendants have also been produced on record.

9. The defendants Along with their reply have appended the prospectus for its forthcoming public issue of 21,20,000 equity shares of Rs. 10 each, in which under the heading "Risk Factors" defendants have warned general public that a suit has been filed against the company which is pending in the Delhi High court regarding infringement of trade mark "Dolphin".

10. It is contended by learned counsel for the plaintiff that in view of the averments made in the plaint and on the basis of the material placed on record a very a strong and good prima facie case has been made out for grant of injunction. The suit is to protect the commercial goodwill of the plaintiff. Since the field of activity in which the defendants are to engage is the same, there is every likelihood of the plaintiff suffering incalculable loss in its trade reputation. Reliance has been placed by the plaintiff on a number of decisions of this court in Ellora Industries v. Banarsi Dass Goela ; B.K. Engineering Company v. U.B.H.I. Enterprises (Regd.) Ludhiana and another : M/s. Hindustan Radiators Co. v. M/s. Hindustan Radiators Ltd. ; Sarabhai International Ltd. and another v. Sara Exports International (AIR 1988 Delhi 134); M/s. Hidesign v. M/s. Hidesign Creations ; M/s. Garden Perfume (P) Ltd. v. M/s. Hidesign v. M/s. Anand Soaps & Detergents ; Daimler Benz Aktiegesellschaft and another v. Hybo Hindustan ; M/s. K. G. Khosla Compressors Ltd. and others v. Khosla Extractions and others (1986 PTC 211) and M/s. Polson Limited v. M/s. Polson Dairy Ltd (1994 (56) DLT 102)

11. Learned counsel for the defendant has contended that of plaintiff is not entitled to any injunctions since there is disparity between plaintiff's corporate name and that of the defendants. The defendants are trading under the corporate name "Dolphin Organics ltd."whereas the field of activity of defendant will be to manufacture bulk drugs which has nothings to do with the drugs beings manufactured by the plaintiff. A slight difference between the plaintiff's and dependent's title in the absence of fraud is a sufficient distinction. There is no question of any deceit in the instant case since the defendant has also in its prospectus and in the application forms given a word of caution to the general public about the pending litigation. Reliance has been placed by the learned counsel for the defendants on a few decisions also.

12. The grant of temporary injunction is in the court's discretion to be exercised judicially on well known principles, which need not be reiterated, except by quoting from a decision in M/s. Hindustan Radiators Co. case (Supra), wherein the same were also noticed as follows :

"Before the plaintiff can be said to be entitled to ad interim injunction it would be necessary for the plaintiff to establish that he has a prima facie case in his favor and the balance of convenience lies in the grant of ad interim injunction so as to protect him otherwise irreparable injury would be caused to him".

X X X X X X X X X

"In an action for infringement of trade mark or of passing off in order to establish a prima facie case for grant of ad interim injunctions, it is incumbent upon the plaintiff to show (a) that plaintiff has been using its trading style and trade mark for quite a long period and continuously whereas the defendant has entered into the said filed only recently, (b) that there has not been much delay in the filing of the suit for injunction by the plaintiff, (C) that the goods of the plaintiff have acquired a distinctiveness and are associated in the mind of the general public as goods of the plaintiff, (d) that nature of activity of the plaintiff and the defendant is same, or similar, (e) that the goods of the parties to which the trade mark of the plaintiff is associated are same or similar, (f) that the user of the said trade mark or trade mark or trade name by the defendant is likely to deceive and cause confusion in the public mind and injury to the business reputation of the plaintiff, (g) that the sphere of activity and the market of consumption of goods of the parties are the same, (h) that the customers of the plaintiff, inter alia, include uneducated, illiterate and wary customers who are capable of being deceived or confused or misled. Unless plaintiff's trading style or trade mark has become common property. It would be no defense for the defendant that there are some other concerns who were also using similar trading style or similar trade mark as to whether it has become common property is a question of fact in each case."

  XXX                     XXX                       XXX 
 
 

"Once a prima facie case is established, balance of convenience would follow. Even otherwise the question of balance of convenience would arise only when the parties are practically on the same level and as such their rights are about equal." 
 
  XXX                      XXX                      XXX 
 
 

"where the plaintiff has established a prima facie case and the balance of convenience is in favor of grant of ad interim injunction the court can assume that irreparable injury would necessarily follow if ad injunction prayed for is not granted".  
 

13. There is sufficient documentary evidence produced on the record by the plaintiff to warrant a conclusion that a good and prima facie case be inferred that trading style dolphin Laboratories Ltd. and trade mark "dolphin or the other marks with prefix "Dolphin" has acquired very wide reputation and name in respect or drugs and pharmaceuticals. Dolphin is a petitioner's registered trade mark which is in its continuous use. Defendant has not yet started manufacturing nor marketing its product and has not yet used the name "Dolphin" but has threatened to come up in the market as a manufacturer of bulk drugs and pharmaceutical products. The word "Dolphin" prima facie appears to be associated with the plaintiff of which due notice was given by the plaintiff to the defendants when the plaintiff came to know of the defendant's existence. It is worthwhile to mention here that the defendant came to be incorporated only on 29th September, 1993 and has not made any product so far except by except by getting its corporate name with prefix "Dolphin". It has also come out with a public issue which opens on 28th February, 1995, for which prospectus and pamphlets have been issued. As per the prospectus, the main object of the defendant company is to manufacture, produce, refine, process, formulate, buy, sell, export, import or otherwise deal in all types of drugs, antibiotics, drug intermediates, pharmaceuticals, heavy and light Chemicals and compounds etc. The defendant's contention that it is to manufacture only bulk drugs and supplies are be made only to the companies and not to small consumers at this stage cannot be accepted in view of the main objects of the defendant company enumerated in the prospectus. The main objects as contained in prospectus does not restrict its objects only to the one stated in the reply and written statement filed by the defendants. It is as action brought by the plaintiff for infringement for of its trade mark, which the defendant can successfully defeat by setting up number of well known defenses. Reading of the written statement and reply filed by the defendants would show that the defendants stand is too vague in which the defendants have not come out with any of the well-known defenses. A very vague attempt appears to have been made of the defendants bona fide intending to use the word "Dolphin", without any intention of cashing upon the goodwill of the plaintiff, For such a defense, at this stage, there is no foundation laid by the defendant except by mentioning that "dolphin" is a common word of a Sea Mammal, without specifically denying the averments made in the plaint by the plaintiff of its continuous use and having earned a good reputation and goodwill in the market. It also cannot be said that defendants were not aware of the plaintiff's goodwill in the drugs and pharmaceutical market or in having come out with an issue recently in the year 1994, which was over-subscribed. As per the prospectus, on the defendant's Board of Directors, is a name of one Shri A. P. Godial, its sales director having an experience of 15 years in the field of pharmaceuticals line. When a person has an experience of over 15 years in the field of pharmaceutical line, it is hard to believe that the defendant has or had no knowledge of the fact that plaintiff is trading under its trading name and registered trade mark "Dolphin". The decisions cited at the Bar on behalf of the defendants prima facie will not apply to the facts of the case, since no foundation has been laid down for the same.

14. Hawtin (E.V.) LD. v. Hawtin (John F.) and COY. LD (1960 RPC 95), was a case which turned around on its own facts. It related to two companies with a personal name in common, neither of them was trading directly with public. On evidence it was held that the plaintiff was not entitled to injunction since evidence on confusion which was likely to be there due to the defendant also using common name was little. In the other decision in park Court Hotel Ltd. v. Trans World Hotels Ltd. (1972 RPC 27), the word "International" was held to be descriptive of both the plaintiffs' and defendants' hotel. It was held that in such like situation a heavy burden lay on a plaintiff to establish false representation and it was not enough to establish some risk to confusion It is not so in the Instant case where prima there is material that the plaintiff has built up a reputation directly associated with the name "Dolphin Laboratories Ltd." and the word "dolphin" is an important part of the reputation. In SEAHORSE Trade Mark 1980 R.P.C. 250. There were disparities between the sizes and prices of the engines and the separation of the markets in which they were sold. It was held there was no real tangible risk of confusion with the opponents by the use of the mark SEAHORSE by the applicant in a normal and fair manner on their marine engines of not less than 5,000 b.h.p. The opponents largest motor was 115 b.h.p. and weighed only 252 lbs. whereas the applicants smallest engine was of 4969 b.h.p. weighing 225 tons.

15. In the 4th decision in Office Clearing Services LD. v. Westminster Window and General Cleaners, LD (1946 RPC 39). The Plaintiff and defendant both carried the business of office cleaners. The Plaintiff traded under the style "Office Cleaning Services", which was later changed to "Office Cleaning Association". The defendants commenced their work as "Westminister Office cleaning". The plaintiffs admitted that they had no monopoly in the two words "office cleaning" and also that those words had not acquired a secondary meaning so as to be distractive of their firm. It was held that where the name of business consists of words descriptive of that business which have not acquired a secondary meaning, a slight difference between the plaintiffs' and defendants' title will, in the absence of fraud, be a sufficient distinction. In th case in hand the position is slightly different where word 'Dolphin's stated to have became associated with the plaintiff business.

16. Instant is the case where defendant corporate office is also located at Malviya Nagar, New Delhi, where plaintiff has got its sale office were duly notified by the plaintiff by serving notice at the earliest opportunity. In case the defendants had any honest intention they world have tried to avoid the use of the word "Dolphin", in view of the plaintiff's being in the filed of drugs of drugs and pharmaceuticals. It has to be prima facie interred on the basis of the material on record that prima face there is no valid defense yet made out by the defendants.

17. The objection of the defendants as regards presentation and signing of the plaint by a person duly authorised on behalf of the plaintiff company has been met by the plaintiffs by producing on record on along with application (1523/29), a certified true copy of the Resolution passed by the Board of Directors of the plaintiff company at their meeting held on 16th September, 1994 authorising the Company Secretary to sign and verify pleadings and file suit.

18. The very fact that defendant intends to come out with a public issue under its corporate name which has a word "Dolphin" as profix, and is a prominent part of the defendant's corporate name, the same is likely to create a confusion in the mind of general public. The investors are likely to be misled in subscribing to the defendants share. Since it is a question of public at large and also infringements of plaintiff's registered trade mark, in case injunction is not granted, the plaintiff is likely to suffer irreparable loss and injury. In the larger public interest, balance of convenience also lies in favor of the grant of injunction. Inconvenience, if any, likely to be caused to the defendants can well be compensated against the plaintiff in these proceedings, in case ultimately the plaintiff would remain unsuccessful. In the light of what has been noticed above and in view of the principles reiterated in the case if M/s. Hindustan Radiators Co.'s case (supre) ingredients (a) to (g) have been made out for a strong prima facie case for grant of injunction and for that reason plaintiff's applications are liable to be allowed, which are allowed and defendants are restrained from using the word "Dolphin" or any other word deceptively/confusingly similar thereto as a part of the trade or corporate name of defendant No. 4 and from raising money from public under the impugned corporate name through the proposed publication opening on 28th February, 1995, Needless to add that observation made while deciding the applications will not cause prejudice to the parties on the merits of case during trial.