Delhi High Court
Bda Private Limited vs John Distilleries Ltd. & Anr. on 11 July, 2008
Author: Badar Durrez Ahmed
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 11.07.2008
+ IA No. 2399/2007 in CS (OS) 383/2007 (u/O 39 R 1 & 2 CPC),
IA No. 6301/2007 in CS (OS) 383/2007 (u/O 39 R 1 & 2 CPC) &
IA No. 8/2008 in CS (OS) 383/2007 (u/O 39 R 4 CPC)
BDA PRIVATE LIMITED ... Plaintiff
- versus -
PAUL P. JOHN & ANR. ...Defendants
AND
IA No. 5577/2002 in CS (OS) 1058/2002 (u/O 39 R 1 & 2 CPC) &
IA No. 13445/2006 in CS (OS) 1058/2002 (u/O 39 R 1 & 2 CPC)
BDA PRIVATE LIMITED ... Plaintiff
- versus -
JOHN DISTILLERIES LTD. & ANR. ...Defendants
Advocates who appeared in this case:
For the Plaintiffs : Mr Sudhir Chandra Aggarwala, Sr Advocate with
Mr Mohit Lahoty and Mr Sanjay S. Chhabra
For the Defendant : Mr Arun Jaitley and Mr Sanjay Jain, Sr Advocates with
Mr Sushant Singh, Mr Manav Kumar and Mr Sarfaraz
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
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 Digest ? YES
BADAR DURREZ AHMED, J
1. These five applications are being disposed of by a common
order. Three applications [two under Order 39 Rules 1 and 2 of the Code of
Civil Procedure, 1908 (hereinafter referred to as the ‗CPC') and one under
Order 39 Rule 4 CPC] have been filed in CS(OS) 383/2007, which is a suit
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.1 of 21
based on infringement of a registered trademark as also on passing off. Two
applications, both under Order 39 Rules 1 and 2 CPC, have been filed in
CS(OS) 1058/2002, which is a suit based on passing off action as well as for
infringement of a copyright. Both the suits have been filed by the same
plaintiff and in respect of the same trademark, i.e, ‗OFFICER'S CHOICE'.
The defendants' mark which is sought to be injuncted is ‗ORIGINAL
CHOICE'. Both the marks are used for the very same product, that is,
whisky.
2. When the suit bearing No. CS(OS) 1058/2002 was filed, the
plaintiff had not yet been granted a certificate of registration in respect of
the mark ‗OFFICER'S CHOICE' and, therefore, that suit was based purely
on the plea of passing off. On 19.04.2007 registration was granted to the
plaintiff in respect of the mark ‗OFFICER'S CHOICE' in relation to whisky
falling under Class 33 of the Fourth Schedule to the Trade Mark Rules,
2002. The registration, however, carried a disclaimer that the plaintiff
would not have any exclusive right to the use of the word ‗CHOICE'.
Consequent upon the said grant of registration, the plaintiff instituted the
second suit i.e CS(OS) 383/2007 incorporating the action of infringement of
a registered trademark and seeking reliefs on the basis of such purported
infringement on the part of the defendants by use of their mark ‗ORIGINAL
CHOICE'. According to the plaintiff, the defendants' mark ‗ORIGINAL
CHOICE' is deceptively similar to the plaintiff's registered mark
‗OFFICER'S CHOICE'.
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.2 of 21
3. The defendants had also applied for registration of their
trademark ‗ORIGINAL CHOICE' which was also registered in the year
2007. The defendants, therefore, moved an application under Order 6 Rule
17 CPC being IA No. 9/2008 seeking amendment of the plaint to bring on
record this development as also to take defences on the basis of the
registration granted in their favour. The said application was allowed by an
order dated 10.01.2008. In the amended written statement, the defendants
contended that in view of the provisions of Section 28 (3) read with Section
30 (2) (e) of the Trademarks Act, 1999 (hereinafter referred to as the ‗said
Act'), the plaintiff's suit for relief of infringement of trademark would not
be maintainable against the defendants. The plaintiff also filed an amended
replication and challenged the validity of the defendants' registration of the
trademark ‗ORIGINAL CHOICE'. In this background, the plaintiff filed an
application (IA No. 1610/2008 in CS(OS) 383/2007) under Section 124 of
the said Act praying for an order that the suit be stayed pending final
disposal of proceedings before the Intellectual Property Appellate Board
(IPAB). That application (IA 1610/2008) was disposed of by a judgment of
this Court dated 01.04.2008 wherein this Court took the view that
substantial triable issues arise with regard to the challenge to the validity of
the registration of the defendants' trademark. This Court was satisfied that
the plea regarding the invalidity of the defendants' trademark was, prima
facie, tenable on both counts -- the alleged improper rejection of the
plaintiff's notice of opposition and the alleged non-registerability of the
defendants' mark in view of Section 11 (1) (6) of the said Act. By virtue of
the said judgment and/ or order the issue regarding the same was raised and
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.3 of 21
the case was adjourned for a period of three months in order to enable the
plaintiff to apply to the IPAB for rectification of the register in the
prescribed manner. That matter is pending before the IPAB.
4. Counsel on both sides, referring to Section 124 (5) of the said
Act, were agreed that the stay of the suit for the infringement of a trademark
under Section 124 did not preclude the Court from making any interlocutory
order (including any order granting an injunction, directing account to be
kept, appointing a receiver or attaching any property) during the period of
the stay of the suit. It is in this background that the plaintiff has pressed for
an interim injunction whereas the defendants have stated that no injunction
at all be granted to the plaintiff.
5. Before considering the arguments of the counsel for the parties
on the question of grant /non-grant of an injunction, it will be necessary to
refer to certain orders which had been passed in these matters by way of
interim arrangements. By an order dated 17.08.2007 the two suits were
directed to be consolidated and it was agreed by the parties that evidence
would be recorded in CS(OS) No. 383/2007. By the same order issues were
also framed. The suit was expedited, parties were directed to file affidavits
by way of evidence and they were also directed that the witnesses to kept
ready and available for cross-examination on the date fixed for final
hearing, i.e., 12.12.2007. On 17.09.2007 an interim arrangement was
arrived at with the idea that since the suits are to be finally heard within a
few months, the interim arrangement could be put in place. The relevant
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.4 of 21
portion of the order dated 17.09.2007 indicating the interim arrangement is
as under:-
―The defendants have filed an affidavit setting out the
sales in different States. Learned senior counsel for the
plaintiff has given a consolidated chart to show the extent of
the sales. There are one set of States in which the defendants
are having sales for some time of varying quantities. These
are States of Karnataka, Kerala, Pondicherry, Andhra
Pradesh, Himchal Pradesh and Punjab. There are States like
Goa, Chattisgarh, Chandigarh, Bihar, Rajasthan, Jharkhand,
Maharashtra and Haryana where the sales are of recent origin.
Learned counsel for the defendants states that the
distilleries of the defendants are located in Goa, Chattisgarh
and Karnataka and according to him in the States where such
distilleries are located, the defendants must have some sale.
Learned senior counsel for the plaintiff, however, disputes the
said position.
Be that as it may, since only a working arrangement for
the next couple of months is to be worked out, it is agreed
that for these States, the Defendants will not exceed the level
of current sales to be made in a financial year in respect of the
brand name in question.
It is made clear that in the suit, there is no concern with
the sales of the defendants of other brands but only with the
sales of ORIGINAL CHOICE. Since at present there are no
sales in the other States by the defendants, such sales would
not start till the disposal of the suit.
The applications stand disposed of in the aforesaid terms
with the hope that the parties will abide by the schedule so
that the suit can be finally heard on 12.12.2007.
The arrangement is without prejudice to the rights and
contentions of the parties in the suit.‖
6. On 24.10.2007, because of certain letters written on behalf of
the plaintiff, it had become necessary to clarify the interim arrangement
made on 17.09.2007. By an order dated 24.10.2007, the following
clarification (to the extent relevant) was made:-
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.5 of 21
―In order to put the matter at rest, I deem it appropriate to
further clarify that there is no interdict in respect of the sales
to be made by the defendants in respect of the States of
Karnataka, Kerala, Pondicherry, Andhra Pradesh, Himchal
Pradesh and Punjab. In respect of States of Goa, Chattisgarh,
Chandigarh, Bihar, Rajasthan, Jharkhand, Maharashtra and
Haryana, the defendants are restricted to sales not to exceed
the level of current sales made in a financial year (either last
financial year or current financial year). In all other remaining
States, the defendant will not commence sales.
In view of what has transpired, I also deem it appropriate
to restrain the plaintiff from writing any further
communications to any authorities dealing with sales of liquor
except that the parties are free to bring to the notice of the
authorities the Order passed today so that the authorities do
not take any action contrary to the Order passed on 17.09.2007
read with the Order passed today.
The application stands disposed of.‖
This arrangement has continued till date. The plaintiff presses for a full
injunction and the defendants seek the vacation of even the interim
arrangement.
7. In view of what has transpired, it is apparent that insofar as the
question of infringement is concerned, that would be dependent on the
decision of the IPAB. If it is held that the registration of the defendants'
trademark ‗ORIGINAL CHOICE' is valid then, in view of Section 28 (3)
and Section 30 (2) (e) of the said Act, the plaintiff would not be entitled for
any relief inasmuch as the defendants would have a complete defence. On
the other hand, if the registration of the defendants' trademark ‗ORIGINAL
CHOICE' is held to be invalid by the IPAB, then the plaintiff would be
entitled to seek the remedies for infringement of its registered mark
‗OFFICER'S CHOICE' provided the plaintiff can bring the case within the
parameters of infringement as indicated in Section 29 of the said Act. In
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.6 of 21
particular, the plaintiff would have to demonstrate that the defendants' mark
‗ORIGINAL CHOICE' is deceptively similar to the plaintiff's mark
‗OFFICER'S CHOICE'. However, these are issues which shall have to
await the decision of the IPAB inasmuch as the key point is the validity of
the registration of the defendants' mark ‗ORIGINAL CHOICE'.
8. The question, therefore, that remains is of passing off. It has
been contended on the part of the plaintiff that the mark ‗OFFICER'S
CHOICE' was adopted by its predecessor Cruickshank & Co. in 1988 and
the same had been assigned to the plaintiff by Cruickshank & Co. on
26.02.1991. There is a controversy as to whether Cruickshank & Co. had
made the assignment for all times to come or whether it was merely a
temporary measure. The defendants pointed out that in fact there is a suit
filed by Cruickshank & Co. being CS(OS) 1800/1993 which is pending
before this Court in which Cruickshank & Co. has taken the plea that the
assignment of the mark ‗OFFICER'S CHOICE' in favour of the plaintiff
was temporary and was to be re-assigned to them. It was also pointed out
by the defendants that these facts have not been disclosed by the plaintiff in
the two suits. However, apart from the question of assignment in favour of
the plaintiff, it prima facie appears that the plaintiff has been using the mark
‗ORIGINAL CHOICE' since 1991 in respect of the whisky manufactured
and sold by it.
9. It was contended on behalf of the plaintiff that the getup and
design of the defendants' label as well as the bottle in which it sells its
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.7 of 21
whisky, is deceptively similar to that of the plaintiff's. It was contended
that the colour scheme of white background with red lettering, the gold
border on the label, the white caps with red lettering and the use of the
initials ‗OC' are all designed to pass off the defendants' product as that of
the plaintiff's. It was also contended that the defendants had admitted that
the mark ‗ORIGINAL CHOICE' was deceptively similar to the plaintiff's
mark ‗OFFICER'S CHOICE' in their opposition filed to the application for
registration by the plaintiff.
10. The learned counsel appearing for the plaintiff drew the Court's
attention to the affidavits by way of evidence as also the cross-examination
which had been recorded in the suit. In my view, it would not be necessary
to examine the evidence on record with the detail that the learned counsel
for the plaintiff wanted this Court to do. This is because, at this stage, only
a prima facie view has to be taken and a detailed examination ought to be
left for the final hearing of the suit. The sum and substance of the
submissions made by the learned counsel for the plaintiff was that the
plaintiff had adopted the mark ‗OFFICER'S CHOICE' prior in time to the
defendants' adoption of the mark ‗ORIGINAL CHOICE'. It was stated that
while the mark ‗OFFICER'S CHOICE' was in vogue since 1988, the mark
‗ORIGINAL CHOICE' was adopted by the defendants only in 1995-96. It
was also contended that the plaintiff as well as its mark had an established
reputation and that the defendants had admitted that the marks were
deceptively similar. The getup and trade dress of the labels and the bottles
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.8 of 21
in which the plaintiff and the defendants sold their whisky were also similar.
It was, therefore, contended that there was every chance of consumers being
deceived into purchasing the defendants' goods thinking that they were
purchasing the plaintiff's goods. He submitted that the probability of
deception is even higher because the goods are the same, the same trade
channels are being used, the products are also in the same price range and,
therefore, they attract the same set of consumers. It was also contended by
the learned counsel for the plaintiff that the adoption of the mark
‗ORIGINAL CHOICE' by the defendants was dishonest inasmuch as
throughout the evidence on record, no plausible explanation has been given
as to why the said mark was chosen. The only answer given by DW1 was
that the word ‗choice' is a common word and since the defendants' brand
was original, the mark ‗ORIGINAL CHOICE' was selected. He also
submitted that the use of the letters ‗OC', which was an abbreviation for the
plaintiff's mark ‗OFFICER'S CHOICE', was also dishonest and intended to
deceive the consumers. The learned counsel submitted that with regard to
IMFL brands, it is a common practice that they are known in their
abbreviated versions. For example, Imperial Blue is known as IB, Bagpiper
as BP, Director Special as DSP and similarly the ‗OFFICER'S CHOICE' is
known as OC or OCW. The fact that the defendants have used the letters
‗OC' on their label means that the defendants are seeking to pass off their
goods as those of the plaintiff. Several documents including menu cards
and price lists of various hotels, restaurants and bars were referred to by the
learned counsel for the plaintiff to show that IMFL brands were indicated in
their abbreviated versions.
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.9 of 21
11. In response, it was contended on behalf of the learned counsel
for the defendants that the plaintiff is not entitled to any injunction, what to
speak of interim injunction. For seeking an equitable remedy, the plaintiff
must come to Court with full disclosure and without any delay. After
reading paragraphs 12, 22, 23 and 24 of the plaint in CS(OS) 1058/2002, the
learned counsel for the defendants submitted that the plaintiff has not
disclosed the date or even the year when the plaintiff came to know of the
defendants' mark ‗ORIGINAL CHOICE' or its use of the letters ‗OC'.
Even the cause of action paragraph in that suit indicates that it arose in May,
2002. The learned counsel for the defendants indicated that in the second
suit, i.e, CS(OS) No. 383/2007 the plaintiff has acknowledged that it was
aware of the defendants' use of the mark ‗ORIGINAL CHOICE' since
1995. The learned counsel submitted that the very fact that in the first suit
which was based purely on passing off and where delay and acquiescence
are of material significance, the plaintiff did not disclose the date on which
it became aware of the defendants' mark ‗ORIGINAL CHOICE'. These in
itself disentitle the plaintiff to any injunction. The defendants have been
submitting their labels for excise approval since 1996 and this was within
the knowledge of the plaintiff. Yet the plaintiff did not file any suit or take
any action in respect of the purported passing off on the part of the
defendants till 2002. There is, therefore, also a substantial delay on the part
of the plaintiff in approaching this Court.
12. It was submitted by the learned counsel appearing on behalf of
the defendants that these facts clearly indicate that the plaintiff knew about
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.10 of 21
the defendants' mark ‗ORIGINAL CHOICE' in 1995-96. Yet, it permitted
the defendants to expand their business under the said mark. The
defendants' business under the said mark has expanded to such an extent
that the sales of ‗ORIGINAL CHOICE' whisky far exceed the sales of the
plaintiff's ‗OFFICER'S CHOICE'. In such circumstances, it was
contended, the plaintiff would not be entitled to any interim injunction.
13. As regards the alleged similarity between the marks and the
labels employed by the plaintiff and the defendants, the learned counsel
appearing on behalf of the defendants submitted that the marks as well as
the labels were different and distinct. He submitted that the word
‗CHOICE' could not be appropriated by the plaintiff. This is apparent even
from the disclaimer in respect of the registration granted to the plaintiff.
Consequently, while comparing the marks, the comparison would have to be
restricted to the words ‗OFFICER'S' and ‗ORIGINAL'. Apart from the fact
that both these words began with the letter ‗O', there is no similarity, visual
or phonetic, in the two words.
14. It was also contended that the arguments made by the learned
counsel for the plaintiff with regard to the letters ‗OC' are also not well
founded. A reference was made to Exhibit DW1/50 which is the original
label of the defendants' product approved by the Excise Commissioner,
Bangalore on 19.02.1996. The said label clearly indicates the letters ‗OC'
appearing in a stylized fashion on the said label of ‗ORIGINAL CHOICE'
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.11 of 21
whisky. Thereafter, reference was made to Exhibit DW1/51 which indicates
the labels of the plaintiff's ‗OFFICER'S CHOICE' Prestige whisky as
approved by the Commissioner of Prohibition & Excise, Hyderabad, Andhra
Pradesh on 02.04.2002. The said labels do not bear the letters ‗OC'. It is
only in respect of the subsequent approved labels, as indicated in Exhibit
DW1/51 at page 422 that the letters ‗OC' appear in a stylized fashion on a
gold-upon-gold embossing above the plaintiff's mark ‗OFFICER'S
CHOICE'. With regard to the menus of various hotels, restaurants and bars
indicating ‗OC', the learned counsel for the defendants submitted that this is
not determinative of whether it refers to the plaintiff's brand ‗OFFICER'S
CHOICE' or the defendants' brand ‗ORIGINAL CHOICE' and that no
invoices indicating sales under the abbreviated mark of ‗OC' have been
placed on record.
15. It was further submitted on the part of the defendants that the
comparison of the two marks, labels and the bottles do not give the
impression that the defendants' mark, label and bottle is deceptively similar
to that of the plaintiff's. Consequently, there is no question of the grant of
any injunction based on passing off action. The learned counsel for the
defendants placed reliance on several decisions:-
(1) Chandra Bhan Dembla v. Bharat Sewing Machines: AIR 1982
Delhi 230 for the proposition that non-disclosure of material
facts would be fatal to the prayer for interim injunction.
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.12 of 21
(2) B. L. & Co. v. Pfizer Products Inc.:93 (2001) DLT 346 (DB)
wherein the observation of the Supreme Court in Wander Ltd. &
Anr. v. Antox India (P) Ltd: 1990 Suppl (1) SCC 727 to the
following effect was noted:-
―Usually, the prayer for grant of an interlocutory
injunction is at a stage when the existence of the legal
right asserted by the plaintiff and its alleged violation
are both contested and uncertain and remain uncertain
till they are established at the trial on evidence. The
court, at this stage, acts on certain well settled principles
of administration of this form of interlocutory remedy
which is both temporary and discretionary. The object
of the interlocutory injunction, it is stated:
"... is to protect the plaintiff against injury by violation
of his rights for which he could not adequately be
compensated in damages recoverable in the action if the
uncertainty were resolved in his favor at the trial. The
need for such protection must be weighed against the
corresponding need of the defendant to be protected
against injury resulting from his having been prevented
from exercising his own legal rights for which he could
not be adequately compensated. The court must weigh
one need against another and determine where the
'balance of convenience' lies."
The Division Bench further held that:-
―The interlocutory remedy is intended to preserve in
status quo, the rights of parties which may appear on a
prima facie case. The Court, in restraining a defendant
from exercising what he considers his legal right but
what the plaintiff would like to be prevented, puts into
the scales, as a relevant consideration whether the
defendants has yet to commence his enterprise or
whether he has already been doing so in which latter
case considerations somewhat different from those that
apply to a case where the defendant is yet commence his
enterprise, are attracted.‖
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.13 of 21
The Division Bench also held in the facts of the case before it,
that delay alone was sufficient to deny the plaintiff an ex parte
injunction in the following words:-
―We find merit in the submission of the learned counsel
for the appellant that the respondents rather waited for
the appellant to incur promotional and other expenses
on trials etc. launching of the product and thereafter
they chose to file the present suit perhaps with a view
to stem the growing sales and market of the appellant's
product. The factor of delay alone should have been
sufficient to deny the respondents an ex parte restraint.
The learned Single Judge erred in not noticing this
aspect of the matter and passed an order of ex parte
restraint which was likely to cause irreparable injury to
the appellants.‖
(3) Balsara Hygiene Products Ltd. v. M/s Aksaar Enterprises:
1997 PTC (17) 266 where a Single Judge of the Bombay High
Court refused to grant injunction solely on the ground of delay.
The Court held:-
―7. From the arguments advanced on behalf of the
plaintiffs and the defendants and the various authorities
cited, which I do not wish to refer to at this stage, it is
apparent that so far as the defendants are concerned,
the defendants have been using this name "ODOFIL"
since 1983-84. Assuming for the sake of argument that
the plaintiffs came to know of this product being
circulated in the market for sale in 1992, even then
except for giving a notice, the plaintiffs did not care to
adopt any proceedings, far as the plaintiffs are
concerned, at this ad-interim stage, it is not open for the
plaintiffs to contend that the defendants should be
restrained by an order of injunction as there has been a
gross delay on the part of the plaintiffs in taking out the
proceedings before the Court. By of this delay, the
plaintiffs have allowed the defendants to expend money
over a considerable period of time in building up their
business. At this stage, it is not open for the plaintiffs
to seek injunction restraining the defendants from
carrying on the business.‖
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.14 of 21
(4) Sh.Gopal Engineering & Chemical Works v. POMX
Laboratory: AIR 1992 (Del.) 302, where a learned Single Judge
of this Court observed that delay in bringing a proceeding in a
passing off action is an important consideration in an
interlocutory application.
(5) The Gillette Co. v. A. K. Stationery: 2001 PTC 513 (Del)
wherein a learned Single Judge of this Court observed:-
―As regards the delay in institution of the suit and its
effect for the purpose of grant of ex parte restraint, the
settled legal position is that while the delay in
institution of a suit for an action for passing off may
not be fatal, it is one of the important and relevant
considerations before granting an ex parte/interlocutory
injunction. Reference in this regard is invited to the
'THE LAW OF PASSING-OFF' by Christopher
Wadlow. Learned Author while dealing with the
motions of interlocutory relevance has observed as
under:-
"Delay in applying for interlocutory relief is a
very serious matter. As a rule of thumb, delay of
up to about a month or perhaps six weeks,
generally has no adverse effect on an inter
parties application and delay of up to twice that
period need not be fatal if it can be explained
and the plaintiff's case is otherwise strong. On
the ex parte application even delay of a few
days can be critical. Unjustified delay of more
than a few plaintiff's counsel, even though delay
of this order has no effect on the plaintiff's
rights at trial. Unlike many of the issues which
can arise on motion, the existence of delay does
not normally admit or much argument. Delay, if
present, is therefore a short, safe and simple
basis for refusing relief. This means that
applications for interlocutory injunctions in
which there is significant delay are unlikely
even to get as far as a hearing, and those that do
are quite likely to be refused without going into
the merits or the balance of convenience."
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(6) The Fairdeal Corporation (Pvt.) Ltd. v. Vijay Pharmaceuticals:
1985 PTC 80. In this case, the Court observed that the
establishment of a prima facie case was not sufficient for the
grant of temporary injunction. The Court observed as under:-
―8. In this view of the matter I am of the opinion that
the temporary injunction granted by me should be
vacated. It is not that once a Court finds that the
plaintiff has a prima facie case, the temporary
injunction should be granted. The plaintiff, in this
case, was aware of the use of the alleged offending
mark by the defendant as far back in February, 1981. It
kept quite all these years. Once it has come to the
court, it cannot get temporary injunction just as a
matter of course to the detriment of the defendant. By
its conduct the plaintiff led the defendant to believe
that defendant could market its product in the sachet,
which now plaintiff claims, offends its registered mark.
Balance of convenience appears to be in favour of the
defendant as it is continuously selling its product in
sachet like Annexure ‗X' since 1980. Then, there is the
question of the conduct of the plaintiff in making
averments in the plaint as well as in the application,
which are obviously false.‖
(7) Amritdhara Pharmacy v. Satya Deo Gupta: AIR 1963 SC 449.
This decision was relied upon for the purposes of explaining the
concept behind acquiescence and as to how it may defeat an
action of passing off. The Supreme Court quoted a passage from
Halsbury's Laws of England with approval, as under:-
―We now go the second question, that of acquiescence.
Here again we are in agreement with the Registrar of
Trade Marks, who in a paragraph of his order quoted
earlier in this judgment has summarised the facts and
circumstances on which the plea of acquiescence was
based. The matter has been put thus in Halsbury's Laws
of England, Vol. 32 (second edition) pages 659-657,
paragraph 966.
"If a trader allows another person who is
acting in good faith to build up a reputation
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.16 of 21
under a trade name or mark to which he has
rights, he may lose his right to complain, and
may even be debarred from himself using such
name or work. But even long user by another,
if fraudulent, does not affect the plaintiff's
right to a final injunction; on the other hand
prompt warning or action before the defendant
has built up any goodwill may materially assist
the plaintiff's case".
The learned counsel for the defendants also placed reliance on:- S. P.
Chengalvaraya Naidu v. Jagannath: AIR 1994 SC 853; Ram Chandra
Singh v. Savitri Devi: 2003 (8) SCALE 505 for the proposition that fraud
vitiates everything and State of A. P. v. T. S. Rao: 2005 (6) SCC 149.
These decisions were placed before this Court in the background of the
question of non-disclosure on the part of the plaintiff regarding its date of
knowledge of use of the impugned trademark ‗ORIGINAL CHOICE' by the
defendants.
16. It is apparent that the plaintiff when it filed the earlier suit for
passing off [CS(OS) 1058/2002] did not, in so many words, disclose as to
when it became aware of the defendants' trademark ‗ORIGINAL CHOICE'.
That suit was filed in the year 2002. It was based entirely on the allegation
of passing off. It is well settled that delay and acquiescence are major
considerations in any action for passing off. It was, therefore, incumbent
upon the plaintiff to have disclosed as to when it became aware of the
defendants' use of the trademark ‗ORIGINAL CHOICE'. Had it disclosed,
as it subsequently did in the second suit [CS(OS) 383/2007], that it was
aware of the defendants' trademark ‗ORIGINAL CHOICE' in 1995/ 1996
itself, then, perhaps it would have dented its case for seeking an interim
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.17 of 21
injunction on the ground of passing off. But the plaintiff was required to
disclose the said fact because it was seeking an injunction, an equitable
remedy, from the Court and it was incumbent upon the plaintiff to have
placed all the facts which were material before the Court. The Courts are
always ready to provide relief to plaintiffs who approach the Court in a
forthright manner for redressal of their genuine grievances. Courts have
always frowned upon plaintiffs who have instituted actions without
disclosing the full facts. I am of the view that the plaintiff ought to have
disclosed the fact that it was aware of the defendants' activities and, in
particular, of its use of the trademark ‗ORIGINAL CHOICE' in respect of
whisky from the very inception, that is, from 1995-1996. Not having done
so, the plaintiff would not be entitled to any interim injunction.
17. Apart from the question of non-disclosure of material facts, the
question of delay also would be an insurmountable hurdle for the plaintiff
for the purposes of the grant of an interim injunction. It has already been
indicated that the entire consideration, at this stage, is based upon the
passing off action, leaving aside the question of infringement which is to be
determined only after the IPAB renders its decision on the issue raised
under Section 124 of the said Act. It is an accepted proposition that delay
and acquiescence would be material considerations for the grant of an
interlocutory order. The plaintiff knew about the defendants in 1995-1996.
Yet, the plaintiff took no action in respect of the alleged passing off
purportedly indulged by the defendants. The cease and desist notice was
sent for the first time in 2002 and the suit [CS(OS) 1058/2002] was also
IAs 2399/07, 6301/07&8/08 in CSOS 383 & IA 5577/02 & 13445/06 in CSOS 1058/02 Page No.18 of 21
filed in that year, i.e., 2002. It was sought to be contended on behalf of the
plaintiff that initially the defendants were restricted to the State of
Karnataka and that did not hurt the plaintiff much. It is only in the year
2002 when the defendants extended the tentacles of their business beyond
the territories of Karnataka that the plaintiff got its cause of action for
instituting the suit for passing off. At this prima facie stage, I am not
impressed with this argument. As noted above, the plaintiff was aware of
the defendant's mark ‗ORIGINAL CHOICE' and that its sales were
growing day by day. In fact, as of now, the sales of ‗ORIGINAL CHOICE'
exceed those of ‗OFFICER'S CHOICE'. The plaintiff was thus, all this
while, sitting back and allowing the defendants to grow and this was not for
a period of a few months or a year or a couple of years but for seven full
years from 1995-1996 to 2002. In this period the defendants grew
substantially and established their mark ‗ORIGINAL CHOICE'. The delay
in approaching this Court would, therefore, come in the way of the plaintiff
for the purposes of an interim injunction.
18. In any event, since the case has to be considered from the
standpoint of passing off, it would do well to remember the five elements of
the modern tort of passing off as set down by Lord Diplock in Erven
Warnink BV v. J. Townend & Sons: (1979) 2 All ER 927, which has the
approval of our Supreme Court as noted in Cadila Heath Care Limited v.
Cadila Pharmaceuticals Limited: 2001 V SCC 73. The five elements
are:-
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―(1) a misrepresentation, (2) made by a trader in the course of
trade, (3) to prospective customers of his or ultimate consumers of
goods or services supplied by him, (4) which is calculated to injure
the business or goodwill of another trade (in the sense that this is a
reasonably foreseeable consequence), and (5) which causes actual
damage to a business or goodwill of the trader by whom the action
is brought or (in a quia timet action) will probably do so.‖
Taking a prima facie view, I am unable to arrive at the conclusion that the
defendants have made any misrepresentation in the course of trade to
prospective customers much less that such alleged misrepresentation is
calculated to injure the business or goodwill of the plaintiff which has
caused actual damage to the business or goodwill of the plaintiff. In order
to back an allegation of passing off, it must be demonstrated by the plaintiff
that the defendant has attempted to pass off its goods as those of the
plaintiff through misrepresentation. Without commenting on the question
as to whether the mark ‗ORIGINAL CHOICE' is deceptively similar to the
mark ‗OFFICER'S CHOICE', as that is a question which will be gone into
by the Court after the IPAB decision, a look at the label and bottle of the
plaintiff on the one hand and the defendants on the other, does not give the
impression that the defendants' bottle and label could be passed off as the
plaintiff's bottle and label. It is not the minute details which have to be seen
but the overall impression that is gained by looking at the two products.
Taking a prima facie view in the matter, it does not appear to me as if the
defendants' label and bottle could be passed off as that of the plaintiff's.
Consequently, the very first element of misrepresentation, which is essential
for an action of passing off, is, prima facie, missing.
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19. For all these reasons, the plaintiff is not entitled to any interim
injunction. The interim arrangement, as per order dated 17.09.2007, as
clarified by the order dated 24.10.2007, shall cease to operate. It is,
however, directed that the defendants shall keep proper accounts of their
sales of ‗ORIGINAL CHOICE' whisky and make the same available to the
Court as and when directed. These applications stand disposed of. There
shall be no order as to costs.
BADAR DURREZ AHMED
(JUDGE)
July 11, 2008
SR
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