Mrf Limited vs Nr Faridabad Rubbers & Anr.
1998 Latest Caselaw 520 Del

JUDGMENT

1. In a suit for perpetual injunction, restraining the defendants from passing off their goods and business as and for the goods and business of the plaintiff by using the offending trade mark "NRF" or any other trade mark deceptively similar thereto, in relation to tubes used in tyres or any other product and further restraining the defendants from infringing plaintiff's registered trade mark "MRF" by using the impugned mark "NRF" and also for rendition of accounts, the plaintiff, engaged in the manufacture and sale of automobile tyres/tubes has filed an application(IA No.11432/97) under Order 39 Rules 1 & 2 read with Section 151, CPC, seeking temporary injunction to the same effect till the disposal of the suit.

2. On being served with summons/notice along with copy of ex parte ad interim injunction, dated 17 December 1997, restraining defendant No.1 from manufacturing and selling scooter tubes and tyres or any other article bearing the trade mark "NRF" or any other trade mark which is deceptively similar to the plaintiff's registered trade mark "MRF", defendant No.1 filed an application (IA No.97/98) under Order 39 Rule 4 read with Section 151, CPC for vacation of the said ex parte order.

3. This order will dispose of both the said applications.

4. Defendant No.1 a proprietorship concern, with its factory in District Faridabad is carrying on the business of manufacture and sale of tubes for scooters and other vehicles. Defendant No.2 is the distributor/retailer of defendant No.1 in Delhi.

5. The case of the plaintiff, in brief, is that it is one of the largest and most reputed automotive tyres/tubes companies in India with a network of five factories in various states of India with over 40 sales offices spread over the country; owing to its extensive sales network, its products are readily and easily available in the remotest parts of India; in connection with its operations it has been using its distinctive mark "MRF" both as trade mark for its products and as part of its corporate name; the mark 'MRF' is now recognised as a hallmark of superior quality, built through years of hard work and determination, and a well known acronym of the corporate name and trading style of the plaintiff. According to the plaintiff, it entered the field of manufacture and marketing, inter alia, tyres and tubes in the year 1961; on account of excellent quality of its products, it gradually established a reputation for itself not only in India but also in major export markets of the world; by 1979 its sales turn over had reached the landmark of Rs.100 crores; all through the plaintiff has used the trade mark "MRF" to identify its business and products in India and abroad; the trade mark MRF is registered in the name of the plaintiff in respect of various classes of goods; in addition to the trade mark registration, the plaintiff is the owner of the copyright in the distinctive and artistic "MRF" logo, which was first published in 1961 and the plaintiff has thereafter been publishing the said artistic work on an extensive scale; the trade mark "MRF", through long standing user spanning over 20 years and extensive advertising is identified with plaintiff's business and products and has become synonymous with excellent quality and durability in the public mind and members of the trade and the public at large purchase the plaintiff's products on the basis of reputation and goodwill projected in the said trade mark; there has been manifold increase in its sales from year to year inasmuch as the sales of Rs.1,64,48,000/- in the year 1960-61 have gone upto Rs.20,29,21,00,000/- in the year 1995-96, which show the immense popularity of its products under the mark "MRF" in the last 30 years and to popularise its trade mark further, it has spent substantial amounts on the publicity of the mark "MRF" inasmuch as in the year 1995-96, expenses incurred on publicity were to the tune of over Rs.70 crores. It is pleaded that having learnt in March/April 1997 that defendant No.1 was manufacturing and selling scooter tubes under the trade mark "NRF", it got an investigation conducted which revealed that the said defendant was manufacturing its tubes under the impugned trade mark in District Faridabad and was marketing the same in Delhi and adjoining areas. The plaintiff alleges that use of mark "NRF" by the defendant shows a deliberate and malicious intent and design on its part to misappropriate, trade upon and derive benefit from the reputation and goodwill of the mark "MRF" and copyright therein, enjoyed exclusively by the plaintiff in India and all over the world in relation to high quality tyres and tubes; defendant No.1 has displayed gross dishonesty in adopting the mark "NRF" in relation to tubes in such a manner that the same can be mistaken for the plaintiff's mark and products; as the goods of the plaintiff and defendant are of the same class and description, sold through same trade channels/shops, across the same counters and to the same class of customers, the user of the trade mark "NRF" by the defendant is bound to cause confusion and/or deception amongst the trade and purchasing public and such confusion and deception amongst the trade and public is bound to adversely affect the plaintiff's goodwill and reputation acquired through years of hard work. It is, thus, alleged that adoption and user of the trade mark "NRF" by the defendant, which is virtually identical to the plaintiff's trade mark "MRF, in respect of the same goods, amounts to passing off defendant's product and business as that of the product and business of the plaintiff, actuated by malafide intentions to trade upon and benefit from the reputation and goodwill associated with plaintiff's mark "MRF".

6. The suit as well as the plaintiff's application are resisted by contesting defendant No.1 on the pleas: (i) the present suit for injunction and damages is not maintainable as the trade mark "MRF" is not registered in the name of the plaintiff company in respect of the tyres and tubes, which are subject matter of the present suit; (ii) since both the trade marks "NRF" and "MRF are un-registered, defendant No.1 is otherwise protected under Section 12 of the Trade and Merchandise Marks Act, 1958 even if it is presumed that both the trade marks are identical; (iii) the suit for injunction is liable to be dismissed on account of inordinate delay and laches on the part of the plaintiff in initiating action against the defendants for perpetual injunction as admittedly the plaintiff acquired the knowledge of the user of the trade mark "NRF" by defendant No.1 sometime in March/April 1997, but the present suit was instituted in December 1997; (iv) the defendants are not guilty of causing any deception or passing off the goods by user of the trade mark in question as defendant No.1 has been using the said trade mark honestly since 1994 and (v) the plaintiff has failed to make out a case of deception or passing off on the part of the defendant, as the allegations of passing off are based only on presumptions and not on any concrete material. While denying that the adoption of the trade mark "NRF" by defendant No.1 was calculated to trade upon or derive benefit from the reputation and goodwill associated with the plaintiff's mark "MRF, it is pointed out that defendant No.1 commenced its production in January 1994 and started selling its tubes for all vehicles, including animal driven vehicles and other goods under the impugned trade mark, which is quite distinct from the plaintiff's trade mark for: (a) defendant No.1 is using the trade mark "NRF" with "Swastik" logo on both sides, which is visibly different from plaintiff's logo of muscleman lifting the tyre used with trade mark "MRF"; (b) defendant No.1's turn over being only of Rs.17 lakhs during the year 1996-97 - a fraction of plaintiff's turnover, there will be no adverse impact on the business of the plaintiff company owing to the use of the trade mark "NRF" by defendant No.1; (c) there is a blue line in the inner circle of the tube of the plaintiff company whereas there is no such blue line in the product of defendant No.1; (d) the construction of alphabet 'M' in the trademark of plaintiff company and "N' in the trade mark used by defendant No.1 is quite different; (e) the construction of words M & F in "MRF" jointly does not take a shape of flag while construction of words N & F in "NRF" takes the shape of fluttering flag and (f) the raw material used by defendant No.1 for the manufacture of tubes is different from that of the plaintiff's raw material.

7. I have heard Mr. Navin Chawla, learned counsel for the plaintiff and Mr.S.K.Rungta, learned counsel for the contesting defendant, who have taken me through the documents filed in support of their respective goods. Both the learned counsel have reiterated the points taken in the plaint and written statement, briefly noticed above. Mr. Chawla, in support of his contention that the offending mark "NRF" is bound to cause confusion and deception, leading to passing off, has also highlighted the phonetic similarity of the two trade marks in question.

8. Mr. Rungta, learned counsel for the defendants, while objecting to plea of phonetic similarity urged on behalf of the plaintiff, on the ground that this plea has been raised only in the replication, has made valiant attempt to bring out distinguishing features in the two trade marks to contend that there is no likelihood of any deception or confusion in the mind of the public purchasing tubes by defendant's "NRF" trade mark. The main thrust of his argument in this behalf is that defendant's trade mark "NRF" has 'Swastik' logo on its both sides whereas plaintiff's mark "MRF" is preceded by a logo of a muscleman lifting the tyre and further even the style of alphabet 'N' is quite different from the style of alphabet 'M'. In support of his argument that onus to prove that the defendant is deceitfully passing of its goods as that of plaintiff's, lies on the plaintiff, reliance is placed on a Bench decision of this Court in Chhattar Extractions Ltd Vs. Kochar Oil Mills Ltd. . Reliance is also placed on two other decisions of this Court in M/s Surya Agro Oils Ltd Vs. M/s Surya Coconut Oil Industries, and Shri Gopal Engg & Chemical Works Vs. M/s POMX Laboratory, AIR 1992 Delhi 302, wherein interim injunctions were refused, respectively, on the grounds that though the trade mark was common but because of difference in stylist representation, there was no likelihood of any confusion between the two marks and because of unexplained delay of 14 months in filing application for injunction. I am unable to agree with learned counsel for the defendants on any of the contentions urged in defense.

9. As regards the objection regarding maintainability of suit for injunction and damages on the plea that the trade mark "MRF" is not registered in favour of the plaintiff, in respect of tubes, I feel that for the purpose of this application, it is unnecessary to dwell upon this issue in greater detail because: (a) it has been stated at the bar by learned counsel for the plaintiff that the registration has since been granted, effective from the date of application and (b) for a passing off action, the registration of the mark or a similar mark prior in point of time to user by the plaintiff is irrelevant. In such an action the priority in adoption and user of a trade mark is superior to priority in registration (See: Century Traders Vs. Roshan Lal Duggar & Co., and N.R.Dongre Vs. Whirlpool Corporation, . In a passing off action, which is meant not only to protect commercial goodwill but is also to ensure that the purchasers are not exploited and dishonest trading is prevented, the plaintiff has to establish: (i) the user of the trade mark prior in point of time than the impugned user by the defendant and (ii) that his business or goods have acquired reputation he is claiming - by showing that his trade mark has become distinctive in his goods and the purchasing public at large associates the plaintiff's name with them.

10. There is no quarrel with the proposition of law laid down in Chatter Extractions Ltd. (supra), relied upon by learned counsel for the defendants,that in a passing off action the plaintiff has to prove not only the similarity in the trade marks but also that the defendant is deceitfully passing off his goods as that of the plaintiff or that there is bound to be confusion in the minds of the customers. But it is equally well settled that the plaintiff is not required to establish fraud nor that any one was actually deceived or that he actually suffered damage. What he is required to prove is that defendant's goods are so marked, made up or described by them as to be calculated to mislead ordinary purchasers and to lead them to mistake the defendant's goods for those of the plaintiff's.(See: Ellora Industries Vs. Banarsi Dass Goela, ).

11. There is no dispute with regard to the prior user of the trade mark "MRF" by the plaintiff and from the sale figures and the publicity expenses mentioned in the plaint, the extensive business of the plaintiff stands established and there is little doubt that no person who has ever used a quality tyre and tube does not know about the name "MRF". The extensive publicity given by the plaintiff to the said trade mark has made it almost a house-hold name. The material brought on record, prima facie, tends to indicate that with passage of time, the plaintiff company has acquired distinctiveness and goodwill in the trade mark "MRF" and it is understood by a common man as associated with the plaintiff.

12. The next question to be considered is whether the use of mark "NRF" by defendant No.1 on its products is such so as to create likelihood of a purchaser being misled into believing that the defendant's goods are of the plaintiff. As noticed above, the stand of the defendant is that no confusion or deception is likely to be caused in the present case because: (i) defendant's trade mark is accompanied by 'Swastik' logo whereas the plaintiff has a logo of a muscleman lifting the tyre preceding its trade mark; (ii) alphabets'M' and 'N' are stylized differently and (iii) there is additional blue line in the inner circle of the tube manufactured by the plaintiff and, therefore, no case of passing off is made out. The stand of the defendant is fallacious.

13. It is well settled that the test to be applied in such matters is as to whether a man of average intelligence and of imperfect recollection would be confused. An unwary purchaser is not expected to keep the goods of two manufacturers or the labels side by side and compare the similarities and dis-similarities thereon meticulously to decide whether he is purchasing the same goods which he had intended to buy. Deception can be caused by user of one or more essential features of a mark and degree of resemblance necessary to deceive or cause confusion could not be defined and the question to be asked by the Court to itself is as to whether the customers of average intelligence and imperfect recollection are likely to be confused on the first impression.(See: Corn Products Refining Co. Vs. Shangrila Food Products Ltd., and Amritdhara Pharmacy Vs. Satya Deo Gupta, .

14. During the course of arguments, defendant No.1 was directed to file break-up of its sales in respect of tubes for cars, scooters and animal driven vehicles. This has been done. The details so filed show that in the year 1996-97, out of total 23,029 tubes sold, 12899 tubes were for animal driven vehicles, 7735 for scooters and motor-cycles and only 2395 tubes sold were for cars, indicating that more than 50% of defendant's sales are for animal driven vehicles, which are used by ordinary common people, majority of them may be illiterate. Same is the position in the part of next year for which sale figures have been furnished. Bearing in mind the class of purchasers of defendant's tubes, who are not expected to keep goods manufactured by the plaintiff and defendant side by side to decide which product they intend to buy, I feel that the afore noted distinguishing features, including the pre-fix of 'Swastik" logo, pointed out by learned counsel for the defendant, do not bring about any material or significant change in distinguishing the two trade marks "MRF" and "NRF", by the class of consumers, who are likely to purchase the goods concerned, particularly when phonetically they are so close. It is no doubt true that the first letters of the trade marks of the plaintiff and the defendant are different but by the remaining two common letters, a purchaser can easily be misled for phonetic similarity. There is likelihood of even the first letter 'N' being pronounced as 'M'. In Essco Sanitations, Delhi Vs. Mascot Industries(India), , relied upon by learned counsel for the plaintiff, the offending trade mark 'OSSO' was held to be deceptively similar to the trade mark 'ESSCO' in relation to brass cocks.

15. During arguments, learned counsel for the defendant was asked as to why out of tens of thousands of words in English language, defendant No.1 happened to hit upon the words "NRF". Learned counsel's ingenious answer was that 'NR' stood for 'Naunit Rai', the name of the grand father of the proprietor of defendant No.1 and 'F' for Faridabad, in which district the said defendant has his manufacturing unit. The explanation is far from convincing and prima facie it appears that defendant No.1 has adopted the mark "NRF" deliberately with an intention to trade upon the reputation of the plaintiff's trade mark "MRF" and to pass off the tubes manufactured by it as those of the plaintiff.

16. Lastly, insofar as the defense of alleged delay on the part of the plaintiff in coming to the Court is concerned, apart from the fact that the question of delay is relevant in the matter of concurrent honest user(See: Apple Computers Inc. v. Apple Leasing & Industries, 1992(1) Arb.Law Reporter 93(Delhi)), which, as held above, is not the case here and mere lapse of time does not amount to laches, I do not find any inordinate delay in plaintiff's approaching the Court for relief of injunction against the defendants. Accordingly I reject this defense as well.

17. I am of the view that the defendant's mark "NRF" is likely to mislead unwary purchasers of tubes to mistake defendant's goods for those of plaintiff's, entitling the plaintiff to the relief of injunction against the defendants.

18. he two decisions of this Court in Surya Agro Oils Ltd and Shri Gopal Engg.& Chemical Works (supra), which are otherwise distinguishable on facts, do not advance the defendant's case. In Surya Agro Oils' case, after examining the two trade marks in question, the Court recorded a categorical finding that these were neither identical nor deceptively similar to each other and thus there was no question of any reasonable person being confused or deceived into believing that one mark is the same as the other. In Shri Gopal Engg. & Chemical Works' case, the Court again found that the defense of open and honest concurrent trading since 1983 being available to the defendant and the plaintiff having failed to explain the inordinate delay, it was not appropriate to grant any interlocutory relief.

19. For the foregoing reasons, in my view, the plaintiff has made out a prima facie case for grant of ad interim injunction in its favour. The balance of convenience is also in favour of the plaintiff. On its own showing, defendant No.1 has launched its product only in the year 1994, whereas the plaintiff is in business since 1961 and as such no irreparable injury is likely to be caused to it, if temporary injunction, as prayed is granted. The likely confusion that may be caused if the defendants are allowed to use the mark "NRF" will cause irreparable injury to the plaintiff. Consequently, the ex parte interim injunction granted on 17 December 1997 is confirmed till the final disposal of the suit.

20. Any observation made above is a prima facie view of the matter for the limited purpose of disposal of the present applications and shall not be construed as expression of opinion on the merits of the case.

21. Both the applications stand disposed of in the above terms.