Hamdard National Foundation vs Abdul Jalil
2008 Latest Caselaw 1334 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI
+                            IA 7385/2004 IN CS(OS) 1240/2004

                                                          Reserved on 24th July, 2008
                                                     Pronounced on 13th August 2008


       HAMDARD NATIONAL FOUNDATION                      ..... Plaintiff
                       Through Mr. Mohit Lahoty, Advocate
                versus

       ABDUL JALIL                   ..... Defendant
                             Through Mr. Ajay Amitabh Suman, Advocate
CORAM:

Mr. Justice S. Ravindra Bhat

1.

Whether reporters of local papers may be allowed to see the judgment? Yes

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in the Digest? Yes

% 13.08.2008 Mr. Justice S. Ravindra Bhat:

1. The plaintiffs, in this suit seek a permanent injunction restraining the

defendants from infringing their trademark, copyright and for restraining them

from passing off their goods as those of the plaintiffs'. The plaintiffs also seek an

order for rendition of accounts and delivery up of goods. By this application I.A.

CS(OS) 1240/2004 1 of 23 7385/2004, an ad interim injunction to restrain the defendant from using the

plaintiff's trademark in the word HAMDARD and the visual mark associated with it,

is sought. The court had, by ex parte orders, granted the injunction. This order

proposes to dispose of that interim application.

2. The first plaintiff is a charitable institution registered under the Societies Act,

1860, whereas the second plaintiff is a wakf, having its office in Delhi. It is averred

that both the plaintiffs are part of the Hamdard Group, which is involved in the

practice, and manufacture of Unani medicines. It is averred that they have been

using the mark 'Hamdard Dawakhana' since 1906. The first plaintiff is the

proprietor of the mark 'Hamdard', and it has been put to use in respect of an entire

range of goods and services offered by the Hamdard Group. The plaintiffs trace the

establishment of the HAMDARD group to a small clinic, by Hakeem Hafiz Abdul

Majeed, in 1906, which acquired considerable reputation resulting in its conversion

into a charitable trust, in 1948, through the second plaintiff. The second plaintiff

engages itself in a whole range of activities, and uses modern analytical techniques

and scientific methods of assessment and quality control of its products to ensure

uniform quality and efficacy of its medicines. It is alleged that the to achieve the

objectives of the group more effectively, the first plaintiff foundation was formed in

1964.

3. The plaintiffs contend that the ownership and proprietorship of the mark

HAMDARD is used conspicuously in relation to their products. This mark is widely

recognized as the house mark of the HAMDARD group; the plaintiffs are owners of

CS(OS) 1240/2004 2 of 23 marks such as HAMDARD EYE DESIGN, HAMDARD BALM, HAMDARD MANJAN,

HAMDARD HAJLAN, HAMDARD MARHAM, HAMDARD GRIPE WATER and other

label as well as device marks. The first plaintiff has permitted the use of its marks,

through deeds of assignment, to the second plaintiff. The second plaintiff thus uses

and markets its products under the HAMDARD banner, in respect of its ROOH AFZA,

SUALIN, SAFI, CINKARA, NAUNIHAL, PACHNOL, GOGHAN BADAM SHIRIN,

HOSHINA, HAMDARD GRIPE WATER brands. The plaintiff's "EYE DESIGN" was first

used in 1958, and continued in use, till it was altered in 1968; in its altered form it

has been pervasively used by the second plaintiff. The plaintiffs hold 37

registrations of the mark HAMDARD and the eye design, in relation to diverse goods

and products. According to the suit averments, the extensive use of the HAMDARD

mark and the eye design associate them with the plaintiff's superior quality

products, available in and outside the country. It is also claimed that the mark and

the design, which is also a mark, are well known and famous trademarks, which

have acquired distinctiveness.

4. According to the plaintiffs, the defendant is using the word mark HAMDARD

in relation to processing and marketing rice, necessitating the present suit. The

plaintiffs allege that the defendants are indulging in misappropriation and misuse of

their marks and eye design, amounting to infringement. The plaintiffs, it is averred

came across the defendant's mark in 1992in relation to rice, resulting in issuance of

a cease and desist notice to the latter on 20th March 1992. The plaintiff also claims to

have come across an advertisement of the defendant's trademark application in

CS(OS) 1240/2004 3 of 23 October 2000 for registration of the mark in the Trade Marks Journal for

registration of the mark and label, in respect of Class 30. The impugned label marks

comprised, inter alia, the marks HAMDARD BRAND DEHRADOONI BASMATI RICE,

the HAMDARD logo which is identical to the plaintiffs' registered trademark

HAMDARD EYE design as well as the trading style of the defendant, HAMDARD

industries. The plaintiff lodged its notice of opposition premising their objection

under Sections 9, 11, 12, 18(1) of the Trade Marks Act. The Assistant Registrar, it is

alleged, has allowed the plaintiffs' objections and refused to register the defendant's

marks, by order dated 23rd July, 2004. The plaintiffs are relying on the said order;

they also rely on the registration certificates issued in their favour, as well as

comparison of the two marks, to say that the defendant's impugned marks amount

to infringement of their marks; besides, it is claimed that the plaintiff's trademarks

have acquired such distinctiveness reputation and goodwill as to be called famous

marks; the defendants' use of these marks is dishonest. Though in relation to rice,

the defendants' use of the marks is likely to result in injurious association, to the

plaintiff, and members of the general public would be deceived into believing that

their (defendants) products are those of the plaintiffs. The use of mark and logo,

similar, if not identical to the plaintiff, is bound to confuse and deceive the consumer

into believing that the goods are of the plaintiff.

5. Mr. Mohit Lahoty, learned counsel appearing on behalf of the plaintiffs, at the

very outset sought to dispel the contention that the plaintiffs have acquiesced in the

defendants' use of the word mark as well as the eye device. Relying on Power

CS(OS) 1240/2004 4 of 23 Control Appliances v. Sumeet Machines, (1994) 2 SCC 448 and Hindustan Pencils v.

India Stationery, AIR 1990 Del 19, he contended that for the defense of acquiescence

to succeed, the defendant must show that not only has there been a delay on the

part of the plaintiff, but also that there was some positive act of encouragement on

behalf of its behalf, which should have let the defendant into a false sense of

security. In this case, counsel pointed out that steps were taken to oppose the

defendants' application for registration and cease and desist notices were also sent.

Counsel further pointed out that a mere delay in bringing an action is not sufficient

to defeat grant of injunction in cases involving trademark infringement. In this

regard he placed reliance on Midas Hygiene v. Sudhir Bhatia, 2004 (28) PTC 121

(SC). Further he submitted that this was a classic case of passing off as it satisfied all

three elements; existence of reputation, possibility of deception and likelihood of

damages.

6. Learned counsel argued that to arrive at a determination of deceptive

similarity, the Court would consider the nature of the mark-whether it is a

composite mark, which includes both words and labels; the degree of resemblances

both visual and phonetic; the nature and character of goods; the class of purchasers

and any other surrounding circumstances. Reliance was placed on Cadila Health

Care v. Cadila Pharmaceuticals, (2001) 5 SCC 73 and Laximkant Patel v. Chetanbhat

Shah, 2002 (24) PTC 1 (SC). It was also argued that in an action for passing off, the

plaintiff is not required to establish the fraudulent intention on the part of the

defendant nor is the former required to prove actual confusion amongst the

CS(OS) 1240/2004 5 of 23 customers. This position of law, learned counsel argued, found support in Ciba-

Geigy Limited v. Surinder Singh, 1998 PTC (18) 545. Counsel also relied on Bata

India v. Pyare Lal, AIR 1985 All 242 and Alfred Dunhill v. Kartar Singh, 1999 (19) PTC

294 to argue the Court should keep in mind the ordinary customer shopping in

places where both the plaintiffs and defendants goods are available for purchase

and the usual conditions under which such purchase would be made, to determine

the deceptive similarity among the goods. Counsel further submitted even a

disclaimer would not reduce the deceptive similarity among the marks. He pointed

out that the plaintiffs had registered their mark under Class 30 in all goods, which

includes rice. Therefore, there was possibility that the plaintiffs could use the mark

in relation to rice and rice products too. Lastly, it was urged that the trade channels

of products of the plaintiff and defendants overlapped, since the plaintiffs were also

selling food products under brands such as ROOH AFZA and other such goods. In

such circumstances, where there was a likelihood of goods being available under the

same roof, the possibility of confusion and deception was real.

7. The defendants submit the mark 'Hamdard', which means 'Dusaro ke dard se

sarokar', is a common dictionary term incapable of being appropriated by any

entity. They submit that the defendants have been using a trade label which

comprises of may other distinctive features, including "Dehraduni Basmati Rice," the

name of their firm along with the address, which is quite distinctive from that of the

plaintiffs' mark. It is further submitted that the goods of the plaintiffs and the

defendants are completely different and that the plaintiffs have not produced even a

CS(OS) 1240/2004 6 of 23 single document that they have dealt with rice or intend to do any business in rice.

Therefore, they submit that no deceptive similarity can arise between the two

marks as they are used in relation to completely different products.

8. It is further averred by the defendants that they have bonafide adopted the

mark since 1989 with respect to its goods and that mark has become distinctive

with their brand of basmati rice. They claim entitlement to protection under section

12 of the Trade Marks Act, 1999 (hereafter 'the Act') as they are honest concurrent

users. Further they allege that the suit suffers from acquiescence, delay, laches,

estoppel and waiver. It is claimed that the delay of twelve years from the issue of

legal notices in 1992 is sufficient to bar the suit. Further, for the said period the

plaintiffs have allowed to the defendants to continue with their label, which

amounts to acquiescence in law.

9. Mr. Suman, learned counsel appearing on behalf of the defendants contended

that this is a case where the plaintiffs and the defendants are engaged in the

business of non-competing/ dissimilar goods and therefore, no question of

deceptive similarity arises. He also argued, relying on Veerumal v. Needle Industries,

2001 PTC 889 (Del) (DB) and Hindustan Pencils Private Limited v. Universal Trading

Company, 2000 PTC 561 (DB), that though delay itself may not constitute a defence

in a suit for infringement, if the defendant is allowed to expend money for a

considerable amount of time in setting up a business, he cannot be now asked to

stop the business. Counsel pointed out in this regard that the time period of twelve

years was considerable and that the plaintiffs' action amounted to acquiescence in

CS(OS) 1240/2004 7 of 23 law. He drew the attention of the Court to the documents produced to show that

sales figures of the defendants run into about 25 crores rupees between the year

1990 and 2002. Reliance was also placed on the judgment reported as Relaxo

Rubber Limited v. Aman Cable Company, 1998 PTC (18) 759 to argue that in cases

where the plaintiffs' and the defendants' goods belong to different classes there can

be no deceptive similarity and therefore, unlikelihood of confusion in the minds of

the public. Similarly, counsel relied on Roshan Lal Oil Mills v. Assam Company, 1996

PTC (16) to support his argument on dissimilar goods and lack of deceptive

similarity.

10. Before a discussion on the substantive law, the question of delay and latches

will have to be dealt with. The Supreme Court in Midas Hygiene v. Sudhir Bhatia,

2004 (28) PTC 121 (SC) has now settled the question of delay in bringing an action

for infringement of trademark. It categorically held that Division Bench in that case

was "entirely wrong in vacating the injunction merely on the ground of delay and

latches". Both cases relied on by the defendants in this case were decided prior to

the decision in Midas Hygiene. Moreover, both those case cannot be considered

binding decisions relating to question of delay in relation to an action for

infringement. While Hindustan Pencils (supra) dealt with delay in relation to

rectification proceedings before the Registrar, the Court in Veerumal (supra) had

found that the registered mark was not is use for a considerable period, thereby

losing its distinctiveness. It held:

"Though delay by itself would not be a defense but if there was a non-

CS(OS) 1240/2004 8 of 23 user for a long period of time the mark would lose its distinctiveness or the mark is then permitted to die for non-user. The Bombay High Court observed "It is well settled that lapse of time may bring about a change in the state of things in such a manner that to grant injunction in favor of the plaintiff's would be harsh and it may cause irreparable damage or harm to the rights of the defendants." Thus the Bombay High Court was of the view that non-use of trademark does have a bearing in action for infringement specially at the interlocutory stage and equities would have to be balanced in such a situation."

11. This Court, in Hindustan Pencils v. India Stationery Products, 1989 PTC 61,

extensively discussed the question of acquiescence. The Court after considering a

number of cases, both Indian and English, approvingly quoted the following passage

from Kerly on Trademark:

"The classic case of acquiescence proper is where the proprietor, knowing of his rights and knowing that the infringer is ignorant of them, does something to encourage the infringer's misapprehension, with the result that the infringe acts upon his mistaken belief and so worsens his position. It seems clear that something legs than that is needed to offer a defense, but how much less is not clear. The current tendency is to hold that a defense of acquiescence or laces may be set up whenever it is unconscionable for the plaintiff to deny anything that he (consciously or unconsciously) has allowed or encore aged the defendant to believe. Mere failure to without some positive act of encouragement is not in general enough to give a defense. A defendant who infringes knowing of the plaintiffs mark can hardly complain if he is later sued upon it, nor is a defendant who starts to infringe without searching the Register of Trade Marks in any better position than if he had searched and so learned of the plaintiffs mark. Acts of the proprietor done in ignorance of the infringement, or even done without his own registration in mind, will not amount to acquiescence."

The Court also observed that:

"It may, however, be stated that it will be for the defendant in such cases to prove acquiescence by the plaintiff. Acquiescence cannot be inferred merely by reason of the fact that the plaintiff has not taken any action against the infringement of, its rights."

CS(OS) 1240/2004 9 of 23

12. It is relevant to extract the relevant provisions of the Act:

Section 2 (1)(h): 'deceptively similar'- A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion;

xxxxxxxx xxxxxxxx xxxxxxxx Section 29. Infringement of registered trade marks - (1) A Registered trade mark is infringed by a person who, not being registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.

(2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which because of -

a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or

(b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark; or

(c) its identity with the registered trade mark and the identity of the goods on services covered by such registered trade mark is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark. (3) In any case falling under clause (c) of sub-section (2), the court shall presume that it is likely to cause confusion on the part of the public.

(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which -

(a) is identical with or similar to the registered trade mark;

and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

CS(OS) 1240/2004                                                          10 of 23
               (5)    A registered trade mark is infringed by a person if he uses such

registered trade mark, as his trade name or part of his business concern dealing in goods or services in respect of which the trade mark is registered.

(6) For the purposes of this section, a person uses a registered mark, if, in particular, he -

                       (a)    affixes it to goods or the packaging thereof;
                       (c)    offers or exposes goods for sale, puts them on the market,

or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;

(d) uses the registered trade mark on business papers or in advertising.

(7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labeling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorized by the proprietor or a licensee. (8) A registered trade mark is infringed by any advertising of that trade mark if such advertising-

                     a)      takes unfair advantage of and is contrary to honest
                             practices in industrial or commercial matters; or
                     b)      is detrimental to its distinctive character; or
                     c)      is against the reputation of the trade mark.

              (9)    Where the distinctive elements of a registered trade mark

consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall construed accordingly.

13. Section 29 of the Act, differs a great deal from Sections 29 and 30 of the

Trademarks and Merchandise Act, 1958. It elaborately lists the circumstances under

which infringement of registered trademarks can be inferred. Section 29(1) deals

with a situation wherein the defendant uses a mark, that is identical or deceptively

similar to that of the plaintiff, in respect of the same goods or services, and in such

CS(OS) 1240/2004 11 of 23 manner that it is likely that such use is taken as being an use as a trademark.

Therefore, in order to fall within section 29(1), the defendant's use of the mark must

be so that it is likely that the public assumes that the said mark is used as a

trademark. Section 29(2) deals with three situations; one where the defendants

mark is identical to that of the plaintiff and in respect of similar goods. Two, where

the marks are similar and in respect of goods which are identical or similar. Three,

the marks as well as the goods are identical. However, to constitute infringement

mere satisfaction of one of the three would be insufficient; the plaintiff has to

establish that such use by the defendant is likely to cause confusion on the part of

the public or is likely to have an association with the registered mark. Section 29(3)

states that where both the mark and the goods in respect of the marks are identical,

then the court shall presume that such use by the defendant is likely to cause

confusion on the part of the public. For the present purposes Section 29 (4) is

relevant; it deals with cases where the marks are identical or similar but the goods

with respect to the marks are dissimilar. For applicability of this provision, the

registered mark must have a reputation in India and the use of the mark without

due cause takes unfair advantage of or is detrimental to, the distinctive character or

repute of the registered trademark.

14. As to what is the appropriate standard to adjudge infringement of a

registered trademark is no longer open to debate; the issue has been settled now for

almost four decades. The standard to be adopted in such cases is that of "likelihood

CS(OS) 1240/2004 12 of 23 of confusion" and not actual deception and actual damage. The Court, in such cases

is to determine the likelihood of confusion and deceptive similarity in order to

arrive at a prima facie finding of infringement keeping in mind the following

considerations:

(i) the broad and essential features of the of competing marks will have to be

viewed,

(ii) the marks will have to be considered as a whole in their respective contexts, (iii)

the similarities rather than dissimilarities will have to be taken note of and (iv) the

marks must be judged from the point of view of unwary purchaser of average

intelligence and imperfect recollection.

15. The above standard has been established and applied in Ruston and Hornsby

v. Zamindara Engineering Co, (1969) 2 SCC 727, Parle Products v. JP & Co., AIR 1972

SC 1359, Amritdhara Pharmacy v. Satya Deo Gupta, AIR 1963 SC 449, Cadila Health

Care v. Cadila Pharmaceuticals, (2001) 5 SCC 73 and Heinz Italia v. Dabur India

(2007) 6 SCC 1.

16. Now coming to the argument of the plaintiff's marks being "famous" and

therefore, deserving a greater degree of protection, it would be appropriate to deal

with this aspect at some length. In Honda Motors Co. Ltd. v. Charanjit Singh & Ors.,

101 (2002) DLT 359 this court restrained the defendants from using the trademark

HONDA in respect of pressure cookers after taking note of number of decisions on

the subject. In Bata India Limited v. Pyare Lal & Co., AIR 1985 All 242, the defendant

who used the mark "Bata Foam" on the mattresses, sofa cushions and other articles

CS(OS) 1240/2004 13 of 23 was injuncted from user of the mark on the ground that the name Bata was well-

known in the market and the user of such a name was not only likely to cause

deception in the mind of ordinary customer but could also cause injury to the

plaintiff-Company and the fact that the plaintiff was not producing foam was not

enough to hold that there could not be passing off action in respect of the user of the

name 'Bata' to the products marketed by the defendant.

17. Ciba-Geigy Ltd. and Anr. v. Surinder Singh and Ors., 1998 PTC (18) 545 was a

case where the plaintiff was using the mark CIBA, CIBACA in relation to goods

different than those of the defendant's. The defendant was using the trade mark

CIBACA in relation to filters for motor vehicles. The case of the defendant was that

the goods in question were entirely different and as such there was no question of

any deception being cause in the minds of the public, when trade mark CIBACA was

used in relation to altogether different goods. While coming to the conclusion that

the defendant had adopted the mark CIBACA deliberately with the intention of

creating confusion in the minds of the public so as to pass off its goods as those of

the plaintiff, the Court granted injunction restraining the defendants from using the

plaintiff's trade mark by the defendants for altogether different goods, as the use of

the trade mark CIBACA by the defendant was held not to be honest.

18. In Sunder Parmanand Lalwani and Ors. v. Caltex (India) Ltd., AIR 1969

Bombay the marks were not in relation to similar goods; the plaintiff's mark "Caltex"

pertained to petroleum products, whereas the applicant/ defendants trade was in

relation to watches. The court held that though the goods were different, there was

CS(OS) 1240/2004 14 of 23 a likelihood of injurious association of the defendant's mark in relation to the

plaintiff's trade. In Lego System Aktieselskab and Anr. v. Lego M. Lemelstrich Ltd.,

Fleet Street Reports (1983); the plaintiff was using the trade mark Lego in respect

of toys, whereas defendant started using the trade mark LEGO in relation to

irrigation equipment. Even though the trade mark LEGO was being used for

different products, the Court granted injunction against the defendant holding that

the plaintiff had established high reputation for the mark Lego which extended

beyond the field of toys and construction kits and the mark Lego had acquired

distinctiveness as the products of the plaintiff.

19. In The Dunlop Pneumatic Tyre Co. Ltd. v. The Dunlop Lubricant Co., 1899 (16)

RPC 12, the plaintiff was using the trade mark DUNLOP in respect of tyres whereas

the defendant was using the same in respect of oil and lubricants. On a suit for

passing off action filed by the plaintiff, defendant was restrained from using the

mark DUNLOP for its products and for its business name. M/s. Banga Watch

Company v. M/s. N.V. Philiphs and Anr., AIR 1983 P & H 418 was a case where the

plaintiff M/s. N.V. Philliphs was using the trade mark PHILLIPHS, which had become

a household mark and had acquired enviable reputation in India and throughout the

world dealing in electrical and electronic goods. The defendant was using the trade

mark PHILLIPHS in respect of watches and clocks. The court granted the injunction

claimed.

The Canadian position



CS(OS) 1240/2004                                                      15 of 23

20. In the recent decision, Mattel, Inc. v. 3894207 Canada Inc., [2006] 1 S.C.R. 772,

the Canadian Supreme Court rejected opposition to use and registration of Baribie in

relation to a restaurant. While doing so, it was reasoned that the mere fact that a

mark was famous did not entitle its owner to the monopoly in relation to unrelated

products and services; the court insisted on certain objective markers, which the

"famous" mark had to satisfy if the claim for monopoly were to be granted. These

included:

(1) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known

(2) the length of time the trade-marks and trade-names have been in use

(3) the nature of the wares, services or business (4) the nature of the trade

(5) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them

(6) other surrounding circumstances

While the relevant issue is "likelihood of confusion" and not "actual confusion", the

lack of "actual confusion" is a factor which the courts have found of significance

when determining the "likelihood of confusion". An adverse inference may be

drawn when concurrent use on the evidence is extensive, yet no evidence of

confusion has been given by the opponent. A similar reasoning persuaded the

Canadian Supreme Court to deny protection in Veuve Clicquot Ponsardin v. Boutiques

Cliquot Ltée, [2006] 1 S.C.R. 824. The VEUVE CLICQUOT trade-mark is a famous

mark in relation to champagne. The brand of Veuve Clicquot Ponsardin also

appeared on a range of promotional items, not offered for sale in Canada, including

CS(OS) 1240/2004 16 of 23 fashion wares for women and men. It was acknowledged as undoubtedly a famous

trade-mark that deserved

"wide protection not only from free-riders but from those who, without any intention of free-riding, nevertheless use in their own business distinguishing marks that create confusion or depreciate the value of the goodwill".

The appellant sought to prevent the respondents' group of six women's

wear shops in Quebec and eastern Ontario from using the trade-name Cliquot and

the respondents' own registered trade-marks Cliquot and Cliquot "Un monde à

part", and to have these trade-marks expunged from the Register. The Canadian

Supreme Court refused protection, and dismissed the appeal.

The US Position

21. The leading authority in the United States was the Supreme Court decision in

Moseley, Victor's Little Secret, Petitioners v. V Secret Catalogue, Inc 537 US 418

(2003). V Secret Catalogue, Inc., the affiliated corporations that own the "Victoria's

Secret" trademarks, filed a suit, alleging that the name "Victor's Little Secret"

contributed to "the dilution of famous marks" under the Federal Trademark Dilution

Act (FTDA). The law defined "dilution" as "the lessening of the capacity of a famous

mark to identify and distinguish goods or services." The District Court granted V

Secret summary judgment on the FTDA claim. The Court of Appeals affirmed,

finding that V Secret's mark was distinctive and that the evidence established

dilution even though no actual harm had been proved. The US Supreme Court

reversed these concurrent findings, holding that the standard contemplated by the

CS(OS) 1240/2004 17 of 23 amendment to the Lanham Act was not "likelihood of dilution" but actual dilution. It

was held that:

"This text unambiguously requires a showing of actual dilution, rather than a likelihood of dilution.

This conclusion is fortified by the definition of the term "dilution" itself. That definition provides:

"The term 'dilution' means the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of-

"(1) competition between the owner of the famous mark and other parties, or

"(2) likelihood of confusion, mistake, or deception." §1127.

The contrast between the initial reference to an actual "lessening of the capacity" of the mark, and the later reference to a "likelihood of confusion, mistake, or deception" in the second caveat confirms the conclusion that actual dilution must be established.

Of course, that does not mean that the consequences of dilution, such as an actual loss of sales or profits, must also be proved. To the extent that language in the Fourth Circuit's opinion in the Ringling Bros. case suggests otherwise, see 170 F.3d, at 460--465, we disagree. We do agree, however, with that court's conclusion that, at least where the marks at issue are not identical, the mere fact that consumers mentally associate the junior user's mark with a famous mark is not sufficient to establish actionable dilution. As the facts of that case demonstrate, such mental association will not necessarily reduce the capacity of the famous mark to identify the goods of its owner, the statutory requirement for dilution under the FTDA. For even though Utah drivers may be reminded of the circus when they see a license plate referring to the "greatest snow on earth," it by no means follows that they will associate "the greatest show on earth" with skiing or snow sports, or associate it less strongly or exclusively with the circus. "Blurring" is not a necessary consequence of mental

CS(OS) 1240/2004 18 of 23 association. (Nor, for that matter, is "tarnishing.")"

22. The consequence of the Supreme Court judgment was a swift Congressional

intervention; by amendment to the Trademark Dilution Revision Act, (effective

October 6, 2006), the standard of "likelihood of dilution" was affirmed; the

amendment provided inter alia, that:

"...the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner's mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.

23. The above discussion shows that the standard for deciding what amounts to

infringement of trademarks in relation to goods and products, which are dissimilar,

is much the same; it is "likelihood of deception". The standards in such cases, in

Canada however, are case sensitive. The court considers a variety of factors, besides

the "famous mark" doctrine. The US standard, which was similar to the Canadian

one (actual damage, rather than likelihood of damage) has now been changed, with

effect from 6th October, 2006.

24. In the present case, the plaintiffs have produced the two competing marks.

Besides, the plaintiffs have produced registration certificates, and renewals in

relation to the marks, being Ex. P-1/11 to Ex. P-1/29, in various Classes of the

Trademarks Act. These include original registrations, some secured more than 50

years ago, as well as renewals. They also rely on a copy of the order of the Assistant

CS(OS) 1240/2004 19 of 23 Registrar, Trademarks, rejecting the defendants application for registration of the

HAMDARD mark for its products; the order is produced as EX. P-2. In an affidavit,

affirmed on its behalf, the plaintiffs assert that their sales grew from Rs.

21,05,56,210/- in 1985 to Rs. 34,94,20,680/- in 1989. The plaintiff has also

produced a large number of invoices and bills in support of its claim for sale of its

products, which not only include medical and pharmaceutical related goods, but

also food products.

25. The defendants' position is that they have been using the mark since 1989

the plaintiff was aware of this, issued a cease and desist notice, and did not choose

to take any action. Now, more than 15 years later, it cannot seek to disturb the its

well entrenched business. The defendant claims distinctiveness in relation to its

products for the last 15 years; according to it, its sales too have climbed; for the last

three years, the sales were about Rs. 2 crores, annually. It is also contended that the

goods of the plaintiff are unrelated, and therefore, there is no likelihood of confusion

or deception.

26. It is no doubt an undeniable fact that the plaintiff was aware about the

defendants' activity, and had even issued a cease and desist notice, in 1992.

However, this factor, to support the argument of latches or acquiescence, is

insubstantial, because of the holding of the Supreme Court in Midas Hygene. When

the court considers, in an infringement suit, the issue of delay, in relation to the

defendant's argument about being in business for long, the relative inaction of the

CS(OS) 1240/2004 20 of 23 plaintiff, is not seen as a disabling factor for grant of ad-interim relief. The exception

to this could be where the defendant can establish prior use of the mark, before the

plaintiff's use. Such, however is not the case here.

27. The plaintiff no doubt has averred to the HAMDARD marks being famous in

nature. Yet, apart from sales figures, and the relative antiquity, nothing more has

been shown. Unlike in other jurisdictions, there is no separate famous marks

registry, to protect claims. However, Indian courts have, in several instances,

recognized and given protection to such claims. The recent trends in Canada, and

pre-2006 decisions in the United States have shown that the mere advertence to

existence of a famous mark, by itself is insufficient to guarantee an injunctive relief.

Court, particularly in Canada, have insisted on the plaintiff establishing injurious

association, in the case of dissimilar goods.

28. As analyzed in the previous part of this judgment, plaintiffs can successfully

secure relief on the ground of deceptive similarity of the impugned mark, even in

relation to dissimilar goods. The courts' inquiry in such cases too has to be the same,

i.e whether the impugned mark so resembles the plaintiffs' mark as to deceive the

consumer into believing that the goods or products (though dissimilar) originate

from the plaintiff. In this case, the points of resemblance are prominent: one, the

HAMDARD word mark; and, two, the distinctive "eye" design, of the plaintiff, which

also appears in the defendant's mark, in a prominent manner. The defendant has

been using the mark since 1989. Apart from stating that the word HAMDARD is

CS(OS) 1240/2004 21 of 23 common, it has not justified why it hit upon the idea of using the word. This factor is

also of some significance, as, if the explanation was a cogent one, or pointed to some

generic origin, in relation to the defendant's goods, that could have supported its

position. The word mark HAMDARD is arbitrary in relation to Basmati rice, which is

traded by the defendant. In this contextual background, the plaintiffs' complaint that

its trademark was copied, and is sought to be appropriated by the defendant cannot

be brushed aside.

29. The goods are to some extent dissimilar; yet there is likelihood of confusion

or deception, on account of overlapping trade channels. The plaintiff's argument

that both its goods and those of the defendant can be purchased from the same

traders, cannot be brushed aside. If this is taken together with the fact that the

plaintiff's HAMDARD brand is also host to an entire range of food products such as

soft drink concentrates and recipes, like ROOH AFZA, etc, which are sold commonly

across the country, even in grocery or small departmental and utility stores, which

also sell foodgrains, the plaintiff's apprehensions are not fanciful. In these

circumstances, the court is of the opinion that the plaintiff has been able to establish,

prima facie, that though the goods are dissimilar, the degree of resemblance, and

nature of products is such that the defendants goods are likely to be confused with

that of those of the plaintiffs, and the latter is likely to suffer from such injurious

association.

30. As far as balance of convenience is concerned, the record shows that the

CS(OS) 1240/2004 22 of 23 plaintiff no doubt did not take steps after the cease and desist notice was issued on

its behalf in 1992, yet, it challenged the defendants' attempt to secure registration,

culminating in the order of rejection of the latter's application in 2004. In Midas

Hygene, the Supreme Court held that:

"The law on the subject is well settled. In cases of infringement either of trade mark or of copyright, normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the mark was itself dishonest."

On an overall consideration of all factors, the court is of the opinion that the balance

of convenience in this case lies in granting the ad interim injunction. The defendant

took a calculated risk in using the HAMDARD word and eye mark; indeed its use of

the eye mark points to an attempt to "free ride" on the plaintiff's reputation. Unless

injuncted, the plaintiff would continue to suffer commercially.

31. In view of the above reasons, the application has to succeed. IA 7385/2004 is

hereby allowed; the order dated 4-11-2004 is confirmed and shall bind the parties

till disposal of the suit. The parties shall bear their respective costs.

August 13, 2008                                      (S. RAVINDRA BHAT)
                                                            JUDGE




CS(OS) 1240/2004                                                            23 of 23