K.M. Associates Pvt. Ltd. vs Good Times Pvt. Ltd.
2003 Latest Caselaw 262 Del

JUDGMENT

Vikramajit Sen, J.

1. This application has been filed in the suit in which a perpetual injunction restraining the Defendant from passing-off his business activities as those of the Plaintiff has been prayed for. Both the parties are engaged in the Restaurant business in the name and style of 'Oxygen'. The Plaintiff has contended unlike the Defendant that it has obtained permissions from various Government Departments such as the Municipal Corporation of Delhi, Excise Department, Tourism Department in the name of 'Oxygen'. It is stated that the Plaintiff commenced business in July 2002. The grievance of the Plaintiff is that the Defendant commenced a similar restaurant business also in the name and style of Oxygen with effect from 31st August, 2002. It has been emphasised by Shri A.K. Goel, learned counsel for the Plaintiff that one of the Directors of the Defendant Company had made a Complaint with the appropriate authority in the form of an affidavit dated 17.8.2002 against the use of @ i.e. denoting that registration had been accorded to the Plaintiff in respect of their name Oxygen. On this premise it was vehemently argued that the Defendant was well aware that the Plaintiff had already commenced business using this word 'Oxygen' and, therefore, its subsequent adoption of the name Oxygen was both mala fide and dishonest. It has further been contended that prior to 31.8.2002 the Defendant was carrying on business in the name and style of GOOD TIMES CAFE and this is also indicative of the fact that the change of name was dishonest.

2. Mr. Goel has relied on the decision of a Division Bench of this Court in Century Traders v. Roshan Lal Duggar & Co. and Ors., , and in particular to the following passages :-

"In an action for passing-off in order to succeed in getting an interim injunction the plaintiff has to establish user of the mark prior in point of time than the impugned user by the defendants. The registration of the mark or similar mark prior in point of time to user by the plaintiff is irrelevant in an action for passing-off and the mere presence of the mark in the register maintained by the trade mark registry does not prove its user by the persons in whose names the mark is registered and is irrelevant for the purposes of deciding the application for interim injunction unless evidence has been led or is available of user of their registered trade mark. 2nd {1976} 1 Delhi 278 and AIR 1965 Bom 35 and AIR 1960 SC 142, Relied on ; Order Dated 30.9.1976 {Delhi in Suit No. 38} of 1976. Reversed.

Proof of actual damage or fraud is unnecessary in a passing-off action whether the relief asked for is injunction alone or injunction, accounts and damages. If their is a likelihood of the offending trade mark invading the proprietary right, a case for injunction is made out. 2nd [1974} 1 Delhi 545. Relied on."

Mr. Goel has further contended that the observations of this Bench were relied on in N.R. Dongre and Ors. v. Whirlpool Corporation and Ors. , , which was affirmed by the Hon'ble Supreme Court in N.R. Dongre v. Whirlpool Corporation, 1996 {16} PTC 583. Mr. Goel has also relied on the observations of the Hon'ble Supreme Court in Laxmikant V. Patel v. Chetanbhat Singh and Anr., 2002 {24} PTC 1 {SC} in which it has been observed that - "In an action for passing-off it is usual, rather essential of seek an injunction temporary or ad-interim. The principles for the grant of such injunction are the same as in the case of any other action against injury complained of. The plaintiff must prove a prima facie case, availability of balance of convenience in his favor and his suffering an irreparable injury in the absence of grant of injunction. According to Kerly {ibid, para 16.16} passing-off cases are often cases of deliberate and intentional misrepresentation, but it is well-settled that fraud is not a necessary element of the right of action, and the absence of an intention to deceive is not a defense though proof of fraudulent intention may materially assist a plaintiff in establishing probability of deception. Christopher Wad-low in Law of Passing Off {1995 Edition, at 0.3.06} states that the plaintiff does not have to prove actual damage in order to succeed in an action for passing-off. Likelihood of damage is sufficient. The same learned author states that the defendant's state of mind is wholly irrelevant to the existence of the cause of action for passing-off {ibid, paras 4.20 and 7.15}. As to how the injunction granted by the Court would shape depends on the facts and circumstances of each case. Where a defendant has imitated or adopted the plaintiffs distinctive trade mark or business name, the order may be an absolute injunction that he would not use or carry on business under that name. {Kerly, ibid, para 16.97}." He has further relied on Hindustan Pencils Pvt. Ltd. v. India Stationery Products Co. and Anr., , in which Hon'ble Mr. Justice B.N. Kirpal, as the learned Chief Justice of India then was, had held that where a case for passing-off had been made out, specially a fraudulent adoption of the Plaintiffs mark, laches and acquiescence would not obstruct the grant of a relief of permanent injunction. The Learned Judge further held that - "if the user in its inception was tainted it would be difficult in most cases to purify it subsequently". Reliance has also been placed on the following passage from Kerly's Law of Trade Marks, 12th Edition, which reads as under :-

"A plaintiff applying for interlocutory relief must show an arguable case against the defendant, and that {if he is right} continuance of the defendant's activities until the trial is likely to cause substantial damages to him that is irreparable in the sense that it will not be compensated by an order for damages at the trial. He need not in general show a strong prima facie case - say, a 20 per cent, chance of success at the trial will do - but something more is needed than a case that will avoid being struck out as frivolous or vexatious. In trade-mark infringement cases irreparable damage, in this sense, is relatively easily shown, since infringement may easily destroy the value of a mark or at least nullify expensive advertising in a way that is hard to quantify for the purposes of an inquiry into damages. Where all that can be shown, however, is that some damage is likely and ought not to be allowed to go on for too long, an order for a speedy trial may be more appropriate than an injunction."

3. Mr. Ajay Sahni, learned counsel appearing on behalf of Defendant has relied on a plethora of precedents. If each one is dealt with it will make this Order needlessly prolix. Reliance has been placed by him on a Division Bench judgment of this Court in Goramal Hari Ram. v. Bharat Soap & Oil Industries, 1985 Arb. L.R. 49, contemporaneous with that of Century Traders case {supra} in which the opinion was substantially different to that of the other Division Bench. In GoramaVs case {supra} it was opined that "It is difficult to draw a line between cases in which the interim injunction has to be issued and those in which it has to be refused. If it is granted as a matter of course, then the Defendant will immediately stop trading in the article in question and the suit will become infructuous. If that happens, the plaintiff would have achieved his purpose without a trial. It can only be allowed to happen if the plaintiff has such a strong case that it is almost impossible to refute. We have not been shown any such material on record as would establish in our minds that the plaintiffs enjoy such a reputation in relation to the soap 'Savera' as would impel the grant of an interim injunction. The fact is that a limited registration has been granted to some other manufacturers, so we doubt very much that the plaintiffs have a reputation irrevocably connected with the trade mark. It may be that at the trial such reputation may be established and the plaintiffs may get a permanent injunction to

restrain the defendants. We are satisfied that an interim injunction could not be granted on the facts and circumstances of the present case". Since there is an abundance of precedents from the Apex Court the dichotomy of the views of the Division Benches of this Court need not be cogitated upon. In American Home Products Corporation v. Mac Laboratories Pvt. Ltd. and Anr. 1986-PTC-71, the Hon'ble Supreme Court has succinctly crystalised the legal proposition thus - "The proprietor of an unregistered trade mark whose mark is unauthorisedly used by another cannot, however, sue for the infringement of such trade mark. His only remedy les in bringing a passing-off action, an inconvenient remedy as compared to an infringement action. In a passing-off action the Plaintiff will have to prove that his mark has by user acquired such reputation as to become distinctive of the plaintiffs goods so that if it is used in relation to any goods of the kind dealt with by the plaintiff, it will be understood by the trade and public as meaning that the goods are the plaintiffs goods. In an infringement action, the plaintiff is not required to prove the reputation of his mark."

4. When the Court is confronted with passing-off action it must first look at the competing trade names and marks etc. There is a complete identity in the use of word 'Oxygen'. However, this is a common word and it has not been created by either of the parties. In such a case it would be necessary for the Plaintiff to prove that the user has been carried out for such a long period that the moment any restaurant by the name of Oxygen is thought or talked about, the image would only be that of the Plaintiffs Restaurant. The Plaintiff must further show that the manner in which the word 'Oxygen' is used is so similar to that of the Plaintiffs get-up is to cause confusion in the mind of the public making them believe that in patronising the Defendant's Restaurant they were in fact availing of the Plaintiffs custom. This consideration would weigh in the mind of the Court regardless of whether deception or mala fides had been successfully brought home by the Plaintiff against the Defendants.

5. I have compared the style of the Plaintiff with that of the Defendant. The script of the word 'Oxygen' is totally different. The Plaintiff has user an upper and lower carriage and each alphabet is in different colour containing sundry, cutlery and garnishing items. The Defendant has used a totally different font and script. The word 'Oxygen' appears in blue. The clientele of both Restaurants would be discerning and it is highly unlikely that any Diner would be confused or fooled into using the Defendant's Restaurant believing it to be that of the Plaintiffs or for that matter, vice versa. In passing-off actions, this, to my mind, is the most important facior.

6. The Defendant has placed on record an application dated 26.6.2002 in respect of the word 'Oxygen'. I do not propose to discuss threadbare the rival contentions as to when the parties commenced their Restaurant business in the name and style of Oxygen. What is of significance is that they are so closely proximate in time that

neither one nor the other can claim to have built up an enviable reputation in the market which is sought to be misused and freeloaded by the other. In these circumstances it would be placing too much emphasis on the subsequent opening of the Restaurant by the Defendant, later by a few weeks. There is enough documentary evidence to show, prima facie, that the user was contemporaneous. This dispute is not one pertaining to infringement. Where the plaint is one of passing-off the Court must adopt a pragmatic approach. If k can affirmatively come to the conclusion that the Defendant seeks to ride on the reputation of the Plaintiff it must injunct the Defendant. A somewhat similar dispute had arisen before me in Rainforest Cafe, Inc. v. Rainforest Cafe and Ors., 2001 IV AD {D} 941 : 2001 PTC (21) 353(Del). One of the arguments which was found compelling was that the Defendant had adopted a get-up which was very carefully and deceptively different to that of the Plaintiff so that any member of the unsuspecting public would not be able to make out an intelligent differentiation. The two Restaurants that I am dealing with are in different parts of the city. I am convinced that the public when it visits the Restaurants of the two adversaries would not be confused so as to believe that the Defendant is the same as the Plaintiff.

7. In these circumstances a prima facie case has not been made out. The businesses of both the parties are so new that the balance of convenience does not exist in favor of either side. Although counsel for the Defendant has challenged the sales figures presented by the Plaintiff and has attempted to show that the Plaintiffs business took off after that of the Defendant, both the businesses are at their fledging stage and irreparable loss and injury would be caused to neither. The market is most likely to settle the dispute before this Court can do so.

8. The application is dismissed with no order as to costs.

Suit No. 1985 of 2002

9. List the matter for further consideration on 2.4.2003.