Rainforest Cafe, Inc. vs Rainforest Cafe And Ors.
2001 Latest Caselaw 508 Del

JUDGMENT

Vikramajit Sen, J.

1. This order shall dispose off IA No. 341/2000 being the plaintiff's application for the issuance of ex-parte ad interim injunction under Rules 1 and 2 of Order XXXIX and I.A. 342/2000 filed by the plaintiff under Order XXVI Rule 9 and IA 2310/2000 which is the corresponding application of the defendants filed under Rule 4 of the same Order. At the first hearing the following order had been passed :

"13.1.2000

Present : Mr. P. Chidambram, Sr. Advocate with Mr. Rajendra Kumar and Ms. Meghna Mishra for the plaintiff.

S. No. 72/2000 :

Let the plaint be registered.

Issue summons to defendants both by ordinary process as well as registered A.D. posts on plaintiff's filing process fee and registered A.D. covers, return able on 24.3.2000.

Notice returnable on 24.3.2000.

I have perused the petition and the documents filed Along with it. Mr. Chidambram, learned. Sr. Counsel appearing for the plaintiff has submitted that the plaintiff had already obtained registration for its name and logo in 70 countries world wide and approximately 100 in number are also pending consideration. The plaintiff has 37 restaurants world wide and is planning the opening of further restaurants throughout the globe, and particularly in India. The plaintiff has advertised in the leading and premier magazines and newspapers. He has further disclosed, that the revenues/sales in 1997 were US$ 108 million and in 1998 were US$ 213 million. Because of its success, largely because of its particular unusual and novel name and the ambience and decor of its outlets, its shares are quoted on the New York Stock Exchange. It has its own web-site. Consequent to its phenomenal progress, the plaintiff has been receiving trade inquiries from all corners of world, some of which have been mentioned in the list filed before this Court.

The defendant is sated to have opened restaurant 'RAINFOREST CAFE' masquerading as one of the outlets of the plaintiff. The defendant has copied the plaintiff's name, as also tagline, of 'A WILD PLACE TO EAT'. There is a certainty that, because, irreparable injury will be caused to the reputation and goodwill of the plaintiff world wide, and will also have adverse ramification on the impending enquiries for its franchise in New Delhi as well as other parts of the India.

I am satisfied that prima facie case has been established for the grant of the ex-parte ad interim injunction prayed for. The balance of convenience is in favor of the plaintiff and it is likely to suffer irreparable injury if the defendant continues to run its restaurant under its present name and style which is a poor but blind copy of the plaintiff's Cafes world wide.

Accordingly, till the next date of hearing the defendants both jointly and severally, their directors, officers, partners, servants, agents, representatives and those acting in concert with them or otherwise are restrained from operating their restaurant business, products and services under or by reference to the trade mark RAINFOREST CAFE and/or the RAINFOREST CAFE logo or any other trade mark and logo as to be likely to deceive or cause confusion and from in any other manner passing off or attempting to pass off or causing, enabling or assisting others to pass off such restaurant business, products and services not being the applicant's products or services or connected with the applicant's as or for the products or services of the applicant.

The defendants both jointly and severally, their directors, officers, partners, servants, agents, representatives and those acting in concert with them or otherwise howsoever are further restrained from using upon or in relation to their restaurant business the impugned RAINFOREST CAFE logo or any other logo mark, so nearly resembling the applicant's RAINFOREST CAFE logo, thereby constituting an infringement of the applicant's valuable copyright in the RAINFOREST CAFE logo as an artistic work.

Compliance of Order 39 Rule 3, CPC be made within three days.

IA 342/2000 :

For the reasons which have prevailed on me for passing the ex-partead interim injunction above, I am satisfied that prayers (a) and (b) of this application ought to be granted. Accordingly, I appoint Mr. Ashok Mittal, Advocate, Chamber No. 346, Lawyers Chambers, High Court of Delhi, New Delhi who is present in Court as a Local Commissioner. He will visit the premises of the defendants/respondents at A-133, Arjun Nagar, Kotla-Mubarakpur, Bhisham Pitama Marg, New Delhi-110003 or such other place or premises as may be necessary and take stock of and confiscate all crockery, cutlery, stationery, menu cards, staff uniforms, bill boards, napkins, paper napkins, brochures, promotional material, point of sale material, letter heads, visiting cards, cash memos, sign boards, sign posts, leaflets, cartons, packing material or any other literature of whatsoever description and nature, bearing the impugned RAINFOREST CAFE mark and logo or any other trade mark/trading style/trade name deceptively similar thereto or reminiscent thereof. The Local Commissioner will submit his report within 5 days.

The fee of the Local Commissioner is fixed at Rs. 7,500/- shall be borne by the Plaintiff."

2. Mr. Chidambram, learned Senior Counsel for the plaintiff, has submitted that the plaintiff commenced business 1994 and has obtained seventy Trade Mark registrations internationally, and another hundred odd applications are pending. In India, these applications were filed on 17.4.1997, 7.5.1997 and 17.8.1998 and are pending in Class 16 and 27. It was emphasised that the plaintiff has thirty-seven restaurants world-wide. The plaintiff has advertised extensively and has expended very large sums of money as a consequence. Its success is evident from Articles/Press Reports written on it, and from Awards it has already bagged. The plaintiff has its own web-site, the domain name having been allotted in 1995. Its shares are quoted and traded on the NASDAQ. The plaintiff has placed documentary evidence on record which sufficiently supports these submissions. Mr. Chidambram, learned Senior Counsel for the plaintiff, has also argued that the plaintiff has received applications for franchises in India and has entered into an agreement with a malaysian company to open new outlets in various countries. The obvious transborder reputation which the plaintiff has built-up calls to be protected, as has been done in the WHIRLPOOL decision, N.R. Dongre v. Whirlpool Corp., 1996 PTC (16)(DB) 476, and N.R. Dongre v. Whirlpool Corp., 1996 PTC (16)SC 583. He has also cited Casar Park Hotels and Resorts Inc. v. Westinn Hospitality Services Ltd., 1999 PTC (19) (DB) 123, and has filed a copy of the unreported judgment of a Single Judge of the High Court of Bombay in Notice of Motion No. 854 of 1999 in Suit No. 1680 of 1999 entitled Taco Bell Corporation v. Taco Bell & Anr. Two compilations have been filed by the plaintiff but it would be of little purpose to mention each case cited therein. It has been underscored that the defendants started business as recently as November, 1999 under the name of Rainforest Cafe and has applied for Trade Mark Classes 29 and 30 on 22.7.1999 and 1.8.1999. Mr. Chidambram also submitted that the degree to which name in question was arbitrary coined, or created, it should attract corresponding protection.

3. Mr. A.M. Singhvi, learned Senior Counsel for the defendants, contended that transborder reputation cannot be relied upon without regular business activity in the country. Since the plaintiff had not commenced any operations in India an action in passing off was not possible. Deception had not been pleaded or made out, since the plaintiff was not the registered holder of a Trade Mark an infringement action was also not possible. The decision in the WHIRLPOOL case was inapplicable for these reasons. The plaintiff had no 'presence' in India - no restaurant, no goodwill, no advertisement, no user of the name and no activity. The plaintiff must prima facie prove that some person was mislead into patronising the defendants mistakenly believing it to be the plaintiff branch, or franchise etc.

4. In cases such as the present all that the Court is required to consider at this stage is whether the plaintiff has succeeded in making out a prima facie case for the grant of discretionary relief. In S.M. Dyechem Ltd. v. Cadbury (India) Ltd., 2000 (4) SCALE 713, the Apex Court had noted that in patent and trade-mark litigation it is necessary for the plaintiff not merely to make out a better case than the defendants, but rather a strongly preponderant case in its favor. The parties are undeniably in the same business. The defendants have been sanguine in attempting to argue that the logo and stylized writing are distinct of each other, by pointing out the difference between them. The test is not that the two names/logos/scripts should be jurally examined in juxtaposition. It is enough if the two are viewed and then the question is posed, on the mental recollection, whether there is a likelihood of deception or confusion. In my view there is such similarity as would make them indistinguishable. The differences are so carefully created that it is quite evident that the defendants intended only to create a possible defense. There is an account of the defendant visiting the eastern extremities of India and during this journey thereby hitting upon the novel concept of 'Rainforest'. It may have been somewhat convincing had the defendants mentioned Kerala or any extreme southern State instead, since rainforests are to found there and not in Assam etc. Had the name quarrelled upon been Blackforest perhaps the reference to the East may have been convincing. Then again, the defendants may have just a smattering of geographic knowledge thus inducing the error in the forest-type, but when the minutely close similarity in the logo and script is recalled, the likelihood of an independent inspiration in the name Rainforest, pales to improbability, nay impossibility. The arguments of this genre, do not impress me to recall the injunctions already granted.

5. Let us move on the question of 'transborder' reputation. In the WHIRLPOOL case, the Division Bench of this Court stated as follows:

"15. The knowledge and awareness of a trade mark in respect of the goods of a trader is not necessarily restricted only to the people of the country where such goods are freely available but the knowledge and awareness of the same reaches even the shore of those countries where the goods have not been marketed. When a product is launched and hits the market in one country, the cognizance of the same is also taken by the people in other countries almost at the same time by getting acquainted with it through advertisements in newspapers, magazines, television, video films, cinema etc. even though there may not be availability of the product in those countries because of import restrictions or other factors. In today's world it cannot be said that a product and the trade mark under which it is sold abroad, does not have a reputation or goodwill in countries where it is not available. The knowledge and awareness of it and its critical evaluation and appraisal travels beyond the confines of the geographical area in which it is sold. This has been made possible by development of communication systems which transmit and disseminate the information as soon as it is sent or beamed from one place to another. Satellite Television is a major contributor of the information explosion. Dissemination of knowledge of a trade mark in respect of a product through advertisement in media amounts to use of the trade mark whether or not the advertisement is coupled with the actual existence of the product in the market."

6. The Division Bench also quoted from the Seven Up Company v. O.T. Limited & Anr., (1947) 75 CLR 203 - where the Australian Judge frowned upon as under :

"Any attempt by one trader to appropriate the mark of another trader although that trader is a foreign trader and the mark has only been used by him in a foreign country. It, therefore, seizes upon a very small amount (sic) of the foreign mark in Australia to hold that it has become identified with and distinctive of the goods of the foreign trader in Australia."

7. These views have also been favored in the Apple Computer Inc. v. Apple Leasing & Industries, 1992 (1) ALR 93, and in Kamal Tradign Co., Bombay and Others v. Gillette U.K. Limited, Middle Sex, England, 1998 PTC-1. The opinion of the Division Bench of this Court in the WHIRLPOOL case is contained in paragraph 25 of the well-reasoned and detailed judgment which was reaffirmed by the Supreme Court. It reads as follows:

"Thus a product and its trade name transcends the physical boundaries of a geographical region and acquires a transborder or overseas or extra-territorial reputation not only through import of goods but also by its advertisement. The knowledge and the awareness of the goods of a foreign trader and its trade mark can be available at a place where goods are not being marketed and consequently not being used. The manner in which or the source from which the knowledge has been acquired is immaterial."

8. A Division Bench of the High Court of Madras in the Caesar Park Hotels and Resorts Inc. v. Westinn Hospitality Services (supra), despite noticing that the plaintiff has no business activity in India, and had not even advertised in India, had granted an injunction against the defendants using the name Westinn. The circumstances were the this name was used in India by the defendants for several years, and had come to be associated with it. The Bench opined as below:

"Though the hotel business has not been carried on in India, the plaintiff could bank upon transborder reputation, so as to maintain a passing off action in India. The documents filed in this case by the plaintiff prima facie establish that there has been transborder reputation and goodwill in India and the service mark 'Westin' had been advertised in magazines having international circulation including India. In other words the reputation of the plaintiff company was traveling transborder to India as well through commercial publicity made in magazines which are available in India."

9. The above decision is also important since an injunction was issued in favor of the plaintiff in respect of "services" which admittedly is not within the contemplation of the present Act. Mr. Chidambram, learned Senior Counsel appearing on behalf of plaintiff explained that this is the reason why the plaintiff could only apply for registration in Classes 16 and 27. Dr. Singhvi's submission was that an injunction ought not to issue as the plaintiff had not even applied for registration in the category of "services". In my view since protection has already been extended by Courts not only in respect of goods but also in respect of services, and keeping in perspective the fact that legislative changes are on the anvil, it would be improper for the plaintiff not to be protected. A Division Bench of this Court has broken ground a decade over in Regency Industries Ltd. v. Kedar Builders, . In the context of whether a prima facie case exists, it is relevant to take not of the fact that the name 'Rainforest' and Leaf Design Logo has been accorded registration in the USA. The plaintiff has protected its interests in the Tradename 'Rainforest' in several foreign Courts.

10. I am convinced that at this stage the plaintiff is not disentitled to any injunctive protection because of non-user and non-activity in India; that it must be averred that the defendants have picked up the idea from the plaintiff; that the plaintiff should have applied for the next closet activity (since services are not within the contemplation of the Act) as the defendant has done having applied for eateries; that it is essential that advertisements should have been issued in India. It is also argued by Dr. Singhvi that the public right to competition must be balanced with the individual's right for protection of his ideas. I agree that this balance must be kept in mind. However, the public should be protected against patronising a particular business harbouring under the illusion that it was part of a successful world-wide business venture/chain. The care with which the defendants have copied the script, the decor and the positioning of different animals, is calculated to deceive the public. Even on the scale, therefore, the injunction ought to issue. An action of passing off applies as much to services as to goods.

11. For all these reasons I am satisfied that the plaintiff has made out a prima facie case which easily outweighs the defense projected by the defendants. The case was argued in great detail referring to number of cases which, in my view, would be necessary to discuss at the final stage of the suit. In these circumstances the interim order passed on 13.1.2000 is confirmed. I.A. 341/2000 is allowed whereas I.A. 2310/2000 is dismissed.

I.A. 342/2000:

12. A Local Commissioner had been appointed and he has submitted his report. No objections to the report have been filed by the defendants. The report is accordingly taken on record. No further orders are called for. The application stands disposed off.

13. I.A. 341/2000 allowed. I.A. 2310/2000 dismissed.