G.M. Pens International Pvt. Ltd. vs Cello Plastic Products And Ors.
2005 Latest Caselaw 1715 Del

JUDGMENT

B.K. Rathi, Chairman

1. The dispute in both these interim applications filed under Section 12A of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as the Act) is of similar natures and also between the same parties and, therefore, both these applications are being disposed of by this common order.

2. The applicant filed UTPE No. 05/2003 in which the applicant moved an application for temporary injunction under Section 12A of the Act. In nutshell the allegations of the complainant are that the complainant company was established in 1985 and it carries on as established business as manufacturers of ball pens, micro tip pens, correction pens etc. and the petitioner is the market leader in the field of ball pens and refills. The petitioner is the exclusive licensee in India to use the trademark REYNOLDS. The petitioner's trademark is an internationally well reputed trademark.

3. The application was originally filed against respondent No. 1 alleging to be the manufacturer of Cello Maxriter pens, who filed reply that it is not manufacturing Cello Maxriter pens and disclosed the name of respondent No. 2 as producing the said pens. Therefore, respondent No. 2 was implicated in this case and he is the only contesting respondent and, therefore, hereinafter he is referred to as the respondent. It is alleged that the respondent is also engaged in the business of manufacture and sale of ball pens. They started manufacturing the pens long after the petitioner and is manufacturing the ball pens with their trade name CELLO. One brand name of the respondent pen is CELLO MAXRITER. That the respondent launched a commercial for its CELLO MAXRITER claiming the CELLO MAXRITER is the longest writing pen available in the market. The TV commercial states that CELLO MAXRITER writes about 4000 meters. The visual feature of the advertisement represents that there are two pens CELLO MAXRITER and another pen racing against each other, and the other pen breaks down at about 2000 mtrs. whereas CELLO MAXRITER runs for 4000 mtrs. and wins the race. It is alleged by the applicant that the other pen shown in the race is represented as one with a white body with a transparent mouthpiece and is deceptively similar to the well established REYNOLDS 045 FINE CARBURE. The complainant therefore prayed in the application under Section 12A of the Act for an injunction to restrain the respondent from telecasting the said advertisement.

4. The applications is opposed on various grounds. The main contention is that the pen shown in the advertisement is not the product of the complainant and its name has nowhere been shown. Secondly, the respondent also claimed that its claim that the pen of the respondent runs 4000 meters is correct. Thirdly, that the respondent has not disparaged the goods of the complainant in any manner. It is further pleaded that no case is made out of unfair or restrictive trade practice against the respondent under the MRTP Act and injunction cannot be granted. That the application as such, liable to be rejected.

5. We have heard the arguments of learned advocates for the parties and have gone through the entire evidence on the record.

6. Before considering the case on merits we may consider a preliminary point raised by the respondent (which in fact is the main argument of the learned Counsel for respondent) that the application under Section 12A has already been disposed of by this Commission by order dated 13.2.2003 and it does not survive for consideration and no further order can be passed on this application. It has been argued by the learned Counsel for the respondent that in application under Section 12A of the Act the applicant sought for two injunctions mentioned in Clause A and B of the prayer made at the foot of the application. This Commission by the above order has granted prayer 'B' but declined the prayer 'A' and disposed of the application finally. That therefore, application does not survive and no further order can be passed on this application. We have considered this argument of the learned Counsel.

7. This Commission considered the application in question on 13.2.2003. On that day respondent No. 1 appeared in pursuance of the notice of the Commission and said that it is in no way connected with the product. It further disclosed the name of respondent No. 2 as the manufacturer of the said product. Therefore, by the said order notice was issued to respondent No. 2 being manufacturing of the said product for the next date of hearing. The following order was also passed:

We have heard learned Counsel for the petitioner on the question of interim application as filed under Section 12A of the MRTP Act, 1969. We have also seen the advertisement. The product of the petitioner prima facie represents one of the two pens (in white and blue) and is stated to be performing less than the product of the other manufacturer. In this view of the matter, we find that the balance of convenience lies in favor of the petitioner for grant of ad interim injunction. The manufacturer of the product as allegedly stated to be manufactured by Respondent No. 2 is hereby restrained from advertising in the manner as assailed by the petitioner though it is left open to the said party to advertise by modifying the colour scheme of the pen or in any other manner of highlight the merits of its own product.

List on 4th July, 2003.

The perusal of the order itself shows that an ex-parte interim injunction was passed granting one part of the relief claimed in the application and notice of the application was issued to the respondent. It is not mentioned in the order that the application is disposed of finally nor it could have disposed of finally in the absence of the respondent. The argument of the learned Counsel therefore that the application does not survive for decision cannot be accepted.

8. Before parting with this question it may also be mentioned that the following prayer was made in the application under Section 12A of the Act:

(a) to issue an interim order of ex-parte temporary injunction restraining the respondent from telecasting/transmitting/broadcasting advertisements, television commercials claiming that CELLO MAXRITER is capable of writing for 4000 meters;

(b) pass an interim ex-parte order against the Respondent herein to cease and desist from telecasting/transmitting/broadcasting advertisements, television commercial or in any other manner or media by making reference to any ball pens with white body, and transparent mouthpiece and thereby disparaging the petitioner's REYNOLDS 045 FINE CARBURE ball pens with white body and transparent mouthpiece, within the meaning of Section 36A of the Act.

(c) Pass an ad-interim, temporary injunction in terms of prayer (a) and (b) above and confirm the same after notice to the respondent.

(d) Pass such further and other orders and issue directions as this Hon'ble Commission may deem fit an necessary in the circumstances of the case.

The perusal of the application shows that in prayer (a) and (b) interim order of ex-parte temporary injunction was sought and in prayer (c) a request has been made to confirm the injunction sought in (a) and (b) after notice to the respondent. Therefore it is clear that on 13.2.2003 the prayers (a) and (b) were considered and prayer (c) was not considered which according to the prayer itself is to be considered after the notice to the respondent. Therefore, now we consider whether the applicant is entitled to get the relief as mentioned in prayer (c) on merits after notice to the respondent.

9. The complainant has filed large number of tests conducted by Shri L. Dheenadhayalan, in-charge of R&D department of the complainant company. He has filed several affidavits to prove the tests. The first is dated 12.12.2002 in which he considered the writing distance in meters of both the concerned pens being products of the respondent and the complainant. The report is paper 8A which shows that the writing distance in meters of REYNOLDS 045 is much more than the CELLO MAXRITER of the respondent which even does not touch 2000 meters mark. The details of the examination made has been given as annexures 'A' to 'D'. The respondent in reply has filed oil base refill writing test report along with its reply. Nothing is mentioned in this test report as to who has prepared this report nor it has been signed by any person. In the reply also only it is mentioned that the true copy of the test report is Annexure 1 of the reply, but nothing is mentioned as to who prepared this test report nor the respondent has filed any affidavit to prove this test report. However, this test report support the claim of the respondent regarding writing of 4000 meters distance of the CELLO MAXRITER pens with weight 60 gms. In reply to it the applicant again filed affidavit of the same person Shri L. Dheenadhayalan in which he has stated that the report is not correct as the writing pressure or load to be applied to writing according to the ISO Standards is 150+10 gram force load, DIN recommends 110 + 5 grams load and bids recommends 125 + 5 grams load. That in fact the CELLO MAXRITER pens do not even touch 2500 meters mileage. Another test report was filed along with affidavit dated 14.2.2003 showing the same writing distance of CELLO MAXWRITER of various samples of pens collected from different cities. Shri Dheenadhayalan has field another affidavit dated 9.9.2003 regarding the test conducted by him along with detailed test reports. It is not necessary to mention the details of the report. However, it shows that the performance of the REYNOLD 045 is much better than that of the CELLO MAXRITER as given at page 236 of the Paper Book. All these facts show that the claim of the respondent is not correct that its pens CELLO MAXRITER writes for 4000 meters. It was for the respondent to show that claim made by them is correct as per Sub-clause (vii) of Clause (1) of Section 36A which is as follows:

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof:

Provided that where a defense is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defense shall lie on the person raising such defense.

In view of this the respondent could have given the claim of writing of 4000 meters of his product after a proper test and burden of proof of correctness of the claim is also on the respondent. Therefore the claim of the respondent that its pen is superior and writes up to 4000 meters, whereas the other pen breaks down at 2000 meters is not correct. In fact much has not been argued by the counsel for the respondent on the merits of application under Section 12A of the Act, the main thrust of the argument of the learned Counsel for the respondent is that the application does not survive for consideration, which we have already repelled.

10. It cannot be doubted that in the television commercial the other pen shown is the product of the applicant. Though its name has not been shown, but it appears from the advertisement that the other pen shown is of white body with transparent mouth piece which gives an impression that it is the product of the claimant. The claimant is producing the pens since 1985 under the same trade dress and can be easily identified and the televised commercial thus seeks to represent that the other pen shown is the product of the applicant as the same is deceptively similar to the REYNOLDS 045 pen. This fact was also observed by this Commission while passing order dated 13.2.03, as is apparent from the order abstracted above. Therefore, prima facie it appears that the impugned advertisement not only disparages the product of the petitioner but also makes a false claim of writing 4000 meters by the pen produced by the respondent. Accordingly the application for temporary injunction is fit to be allowed. The order dated 13.2.2003 passed by this Commission is confirmed and it is further ordered that the respondent shall not telecast, transmit or broadcast advertisement, television commercials or in any other manner or media claiming that CELLO MAXRITER pen is capable of writing 4000 meters. This disposes the interim Application No. 04/2003 filed in UTPE No. 05/2003.

11. Now coming to the another Interim Application No. 13/2004 in fresh UTPE No. 22/2004. It may be pointed that in the order of this Commission dated 13.2.2003 already referred to above, it was left open to the respondent to advertise by modifying the colour scheme of the pen or in any other manner to highlight the merits of its own product. The respondents introduced another advertisement in January 2004 claiming that CELLO PIN POINT which is a new product is the only continuous and uniform writing pen available in the market. The visual feature of advertisement represents that there are two pens, CELLO PIN POINT and another pen, the other pen is intermittently writing and whereas CELLO PIN POINT writes continuously. The other pen shown in the Television commercial is represented in a way as one with white body and a transparent blue mouthpiece in a blue background, which is deceptively similar to the well-established 045 REYNOLDS FINE CARBURE ball pen of the petitioner. This advertisement has been challenged by UTPE 22/2004 and application under Section 12A of the Act has been moved. It a is alleged that this television advertisement of the respondent conveys the message to the viewers that CELLO PIN POINT ball pen only writes continuously and the petitioner's pen writes intermittently, thus putting the petitioner's pen in bad shape among the viewers. The respondent has made an unfair comparison of the petitioner's pen for puffing its product. That the practice adopted by the respondent is unfair trade practice under the provisions of Section 36A of the Act. The advertisement is deliberately issued in such a way as to mislead the general public as the petitioner's REYNOLD pens are inferior to the respondent's CELLO PIN POINT pens. That the sole object of the respondent is putting the goods of the petitioner as inferior is grossly unfair and by the same the respondent is trying to divert business of the petitioner. It is further alleged that in the TV commercial the other pen shown represented in such a way as one with white body and transparent blue mouth piece in a blue background, which is deceptively similar to REYNOLD 045 FINE CARBURE ball pen of the petitioner. That therefore the fresh complaint is being filed as advised by the counsel for the petitioner, though the petitioner was of the bona fide view that there was no necessity of filing a separate application as the matter was still pending before this Commission.

12. This application has been opposed by the respondent on several grounds. It is contended that the claim of the petition is based on the erroneous assumption that the other pen shown in the commercial with the CELLO PIN POINT pen has been compared with and is exactly similar to the REYNOLD 045 PINE CARBURE pen. That the respondent has launched sale of Cello Pin Point the ball pens recently in September, 2003. It is entirely a different product and new commodity and so is the advertisement which has a completely different idea and story line. The advertisement merely highlights the merits of the respondent's pens i.e. it writes uniformly, continuously and very smoothly. That the claim of the applicant that it is similar to the product of the applicant is wholly without any basis and in correct. The claim of the applicant that it is exclusive owner of the trade dress is unfounded vague and wholly misconceived. No document has been produced to support the claim of the particular trade dress. It is alleged that another pen used by the respondent is one of the several opaque coloured pens readily available in the market which has the same get up and colour scheme. That another pen used in the impugned advertisement does not have a transparent mouth piece rather frosty mouth piece and the body colour is also not white. Besides there is no blue/black/red cap in the other pen of the advertisement. The Story Board of the advertisement has also been filed to show the same. That the respondent by the impugned advertisement is only highlighting the merits of its own pen and has no intention to disparage the goods of another competitor. That accordingly the application is liable to be rejected.

13. We have heard the learned Counsel regarding this application as well and have also perused the said TV advertisement which have been demonstrated before us by film by Lap Top and also locked the story board of the advertisement.

14. The first question that arise for decision is whether the other pen shown in this advertisement deceptively similar to the pen produced by the applicant. The advertisement simply show that the other pen is writing intermittently whereas CELLO PIN POINT pen writes continuously. It has been argued that the respondent is only highlighting features of its new product and not disparaging the goods of any person. It has been contended that in the case of M. Balasundram v. Jyothi Laboratories and Anr. 1995 (82) Co. Cases 830, it was observed "We do think that the words "goods of another person" have a definite connotation. It implies disparagement of the product of an identifiable manufacturer." That this decision was again followed by this Commission in the case of Rackitt & Coleman Pvt. Ltd. v. Zee Telefilms Ltd. and Anr. (1993) CTJ 159. We have considered the arguments and are of the view that in the case of M. Balasundram v. Jyothi Laboratories and Anr. the Notice of Enquiry was discharged on its merits as the other goods shown in the TV advertisement was only giving a passing glimpse and the same was not identifiable. The contention that there should be identifiable manufacture therefore cannot accepted. In any case if the other pen shown resembles with the product of the claimant the manufacture is identifiable. The learned Counsel for the respondent laid great stress on the fact that there are large number of producers who are manufacturing pens similar to those as shown in the T.V. advertisement. In fact during arguments also the learned Counsel for the respondent has produced number of similar pens produced by different producers. It therefore appears that several coloured opaque pens as shown in the advertisement are readily available in the market. However, in this regard the arguments of the learned Counsel for the applicant is that it was established in this business in 1985 and since then producing similar pens and has the particular trade dress, that it is the leader in the market and all other producers are very small producers who may be copying the applicant's trade dress but the applicant could not file cases against all those persons at different places for breach of the trade dress of the complainant. In any case applicant is the leader in the market and if it can show that the other pen shown in the advertisement resembles or gives an impression that it is the product of the applicant he is entitled to get the injunction. Another reason is that when one compares his product, he always compares it with the leader in the market and not with insignificant local product of similar nature.

15. It has been argued that since the beginning of the product since 1985 the applicant is following the same trade dress. The learned Counsel has referred to the decision of Delhi High Court in Colgate Palmolive Company and Anr. v. Anchor Health and Beauty Care Pvt. Ltd. which was an action of passing off. There was same trade dress and colour combination in respect of the same and similar product though the names were totally different. It was found that the applicant is entitled to an injunction. Reliance has been placed on some decisions which have been extracted in the judgment. The following observation made in Hoffmann-La Roche & Co. v. DDSA Pharmaceuticals Limited 1972 RPC 1 Lord Justice Harman was referred:

Goods of a particular get-up just as much proclaim their origin as if they had a particular name attached to them, and it is well known that when goods are sold with a particular get-up for long enough to be recognized by the public as goods of a particular manufacturer it does not matter whether you know who the manufacturer is.

Regarding the significance of the trade dress the following observation in the case of Vision Sports, Inc. v. Melville Corporation was extracted:

In contract, trade dress involves the total image of a product and" may include features such as size, shape, colour combinations, texture, or graphics. Trade dress protection is broader in scope than trademark protection, both because it protects aspects of packaging and product design that cannot be registered for trademark protection and because evaluation of trade dress infringement claims requires the Court to focus on the plaintiff's entire selling image, rather than the narrower single facet of trademark.

In para 62 of the judgment it was observed that:

Significance of trade dress and colour combination is so immense that in some cases even single colour has been taken to be a trade mark to be protected from passing off action. Colour combination is a trade mark within the definition of the TMM Act as there is no exclusion in the definition. Even a single colour has been held to be a trade mark. There may be exception also. Exception is that where the colour cannot be protected as the blue colour is for the Ink and red colour is for the lipstick. Red and white has nothing to do with the pink. Teeth as while line and Gum as Pink colour alone at least sometimes can meet the basic requirements as a trade mark. Colour depletion theory is unpersuasive only in cases where a blanket prohibition is being sought.

16. In view of the above observations we are of the opinion that the argument that another pen used by the respondent is one of the several coloured opaque pens readily available in the market which have the same or similar cap and colour scheme, is of no avail. There may be many identical products in the market but it cannot be denied that the applicant is the leader of the market in respect of this product and this deceptively gives an impression that the other pen is the product of the complainant and, therefore, it disparages the goods of the complainant. After all what can be the intention behind putting an advertisement. No one while high lighting the merits of his goods can compare it with a product of an insignificant local producer. The respondent is also a big company and can not compare its goods with cheap goods produced by a very small producer in home industry. A horse can be compared by a horse. The arguments that the goods disparaged should be of the known manufacture is also of no avail in the present case.

17. It has also been contended by the learned Counsel for the respondent that the application is not maintainable as it has not been shown that the unfair trade practice is likely to be prejudicial to the public interest or interest of the traders. The reliance has been placed on Haridas Exports v. All India Float Glass Manufacturers' Assn. in which it was observed the power of the Commission to grant interim injunction:

The power of the Commission to grant temporary injunction arises only after it is satisfied that a restrictive trade practice or unfair trade practice is being carried on which is likely to affect prejudicially the public interest or the interest of trader or class of traders etc. It is only with a view to prevent the causing of a prejudicial effect that an interim order can be passed by the Commission under Section 12A. It is only on the basis of proof, and not mere allegation, and on the basis of an inquiry before the Commission that any trader or class of traders is carrying on a restrictive trade practice which is likely to affect prejudicially the public interest or the interest of any trader, class of traders or traders generally or of consumers that the Commission would have jurisdiction to grant a temporary injunction restraining any undertaking or person from carrying on any restrictive trade practice.

18. In this connection it may be mentioned that in this case the impugned advertisement gives an impression that the CELLO PIN POINT pen is most superior and gives a smooth and uninterrupted writing. This prejudicially affect the public interest and also of the other traders in the market. Therefore, it is a fit case where the temporary injunction should be granted.

19. The learned Counsel for the respondent has also argued that the application is very delayed and, therefore, there is no balance of convenience in favor of the applicant. It is contended that according to the application itself the complainant came to know regarding the impugned advertisement in January 2004. Though the respondent alleged the advertisement was introduced in September 2003. The application was moved in April 2004 and is delayed. In our opinion, the delay of four months in filing the application does not result in balance of convenience in favor of respondent nor does reflect on the question that the applicant shall not suffer irreparable loss if the injunction is not issued. The impugned advertisement disparages the goods of the applicant and likely to prejudice their interest and also the interest of the general public. Therefore, irreparable losses will be caused to the applicant if the applicant for injunction is rejected.

20. The respondent is free to high light the merits of its product and may highlight in any way. It can show the smooth writing of its pen, but there does not appear to be any reason to introduce the other pen for the same. The story board has been filed which contain as many as 26 pictures. Except in picture Nos. 1, 2, 6, 7 and 8 no other pen has been shown except the product of the respondent. What is the necessity of showing another pen in theses pictures if the intention of the respondent was only to highlight the merits of his own pen. The intention clearly was to disparage the goods of others including the complainant. The intention is therefore apparent from the advertisement itself. To highlight the case of one's product it is not necessary to show the demerits of the other product.

21. In the circumstances this application is also allowed. The respondent is restrained from telecasting the impugned advertisement in any manner or in form for its CELLO PIN POINT pens by making reference to any of the petitioner's pen with white body and blue transparent mouth piece giving alluding resemblance to the petitioner's pen.