Beiersdorf A.G. vs Ajay Sukhwani & Another
2008 Latest Caselaw 2003 Del

CS(OS) No.1164/2001                   Page No.1



                                                             REPORTABLE

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       CS(OS) NO. 1164 OF 2001

%                        Date of Decision : November 14 , 2008.



BEIERSDORF A.G.                          ....         Plaintiff.

                       Through Mr.Rajeev K. Virmani, Advocate.

                                  VERSUS

AJAY SUKHWANI & ANOTHER         ..... Defendants.
            Through   Ms.Pratibha   M.    Singh,    Ms.Saya
            Chaudhary and Ms.Jashan Jot, advocates.

CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether Reporters of local papers may be

     allowed to see the judgment?

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

3. Whether the judgment should be reported

     in the Digest ?                                YES

SANJIV KHANNA, J:


1.     M/s.Beiersdorf AG, the plaintiff is the registered proprietor of the

mark NIVEA under Class 3, toiletries, under the Trade Marks Act,

1958 (hereinafter referred to as the Act, for short). Defendant no.-2

M/s. Nivea International is a partnership firm and Mr.Ajay Sukhwani,

defendant no.1 is one of its partners. It is engaged in the business of

educational consultancy and allied services. The plaintiff has filed the
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present suit for passing off and restraining the defendants from using

mark/word NIVEA as a trademark/trade name or as a part of trading

style and also from operating a website with the domain name

www.niveainternational.com.


2. On the basis of the pleadings and documents filed by the parties,

the following issues were framed on 8th November, 2005 :-


                 "(i)    Whether the plaintiff is the proprietor of
                 the trademark NIVEA and is entitled to protect
                 the said trademark in respect of different
                 goods/services?

                 (ii)    Whether the trademark NIVEA is a well
                 known trademark of the plaintiff?

                 (iii)        Whether by use by the defendant
                 of the trademark/tradename NIVEA as well as
                 the website over the internet bearing the
                 name        www.niveainternational.com        the
                 defendant is passing of its business/services
                 as and those of the plaintiff?

                 (iv)      Whether the plaintiff has come to this
                 Court with clean hands and has suppressed
                 any material facts from this Court?

                 (v)        Whether the suit suffers from delay,
                 latches and acquiescence?

                 (vi)       Relief."
 CS(OS) No.1164/2001                  Page No.3



3.     Parties have filed affidavits by way of evidence of Mr.Sudhir

D.Ahuja, PW-1 for the plaintiff and Mr.Ajay Sukhwani, DW-1 for the

defendants. Parties have not cross examined the witness produced

by the other side, on the ground that facts are admitted. By an ex

parte order of injunction dated 1st June, 2001, the defendants have

been restrained from using the mark NIVEA as a part of their trading

name or style         and the website www.niveainternational.com or the

domain name niveainternational. The said order continues to be in

operation. It is stated by the defendants that they did not press for

vacation of stay or variation of the injunction order as the trial in the

suit was expedited.


          ISSUE NOS. 1 TO 4


4.      Issue nos. 1 to 4 are interconnected, inter related and are

therefore being dealt with together. The plaintiff came into existence

in 1890 and is incorporated under the laws of Germany. The plaintiff

coined and adopted the mark NIVEA, which was registered as a mark

in Germany on 23rd June, 1905. In 1911, the plaintiff started first

commercial use of the mark NIVEA and by 1991, NIVEA cream was

available in 150 countries. The plaintiff started marketing its products

in India in 1943. The plaintiff had made an application for registration

of mark NIVEA in India in Clause 3 on 12th April, 1943.The

registration was granted and has continued since then. The mark
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Nivea has been continuously, extensively and uninterruptedly used

by the plaintiff in India and worldwide.


5.    It cannot be doubted and to be fair to the learned counsel for the

defendants they did not contest that the mark NIVEA is a well known

and a respected trademark.


6.    The defendants‟ defence in addition to delay and laches, which

is subject matter of issue no.5, is based upon the following

arguments:


          (i)         Decision dated 25th June, 2001 of the administrative

                 panel of the World Intellectual Property Organisation

                 rejecting     the   complaint     of   the   plaintiff   against

                 defendant no.2.


          (ii)    There is no likelihood of deception as (a) the line of

                 activity i.e. educational services is entirely different and

                 distinct from the goods marketed and sold by the

                 plaintiff under the mark NIVEA, (b) plaintiff cannot

                 claim a universal right to use the mark NIVEA and (c)

                 services provided by the defendants are utilized by

                 well educated persons belonging to middle class and

                 therefore there is no confusion or even likelihood of

                 confusion.


       EFFECT OF WIPO DECISION
 CS(OS) No.1164/2001                Page No.5



7.     The decision dated 25th June, 2001 of the administrative panel

of the World Intellectual Property Organisation (hereinafter referred to

as WIPO, for short) is Exhb.DW 1/1. The said decision was made on

the complaint made by the plaintiff against grant of registration of the

domain name www.niveainternational.com to the defendant no.2 by

the registrar of Domain Public Inc., Vancouver, Canada. The said

decision is under the Uniform Domain Name Dispute Resolution

Policy (hereinafter referred to as „Policy‟, for short) adopted by

Internet Corporation of Assigned Names and Numbers (hereinafter

referred to as ICANN, for short) and the „Rules for Uniform Domain

Name Dispute Resolution Policy‟ (hereinafter referred to as Rules, for

short), framed by them. The „Policy‟ and „Rules‟ were not filed along

with documents but since both parties have relied upon, I have taken

them on record as Exhibits‟ "C" and "D" and relevant provisions have

been quoted below.


8.     A domain name is an identity or name, which distinguishes the

registrant from another. Internet allows universal access cutting

across     boundaries.   Domain   name         therefore   gives   universal

exclusivity. No two domain names can be exactly similar.

International registration of Domain Name System (DNS) is regulated

by ICANN.


9.     Registration of domain name is an administrative act, which

involves a request to the domain name registry, payment of fee and
 CS(OS) No.1164/2001                 Page No.6



allotment, if there is no prior user with the same domain name.

Registration being ministerial act is not a pronouncement on the

question of violation or infringement of trademark, deception,

confusion, etc. At the same time, ICANN was conscious that there

can be complaints of infringement of trademark or deception.

Therefore, each applicant seeking registration has to give an

undertaking to agree to mandatory administrative proceedings in

case of a complaint by a third party in respect of the domain name.

Clause 4(a) of the Policy reads as under:-


              "4.     Mandatory Administrative Proceeding.

                 This Paragraph sets forth the type of
              disputes for which you are required to submit to
              a mandatory administrative proceeding. These
              proceedings will be conducted before one of
              the administrative-dispute-resolution service
              providers                listed               at
              www.icann.org/udrp/approved-providers.htm
              (each, a "Provider").

              a. Applicable Disputes. You are required to
              submit to a mandatory administrative
              proceeding in the event that a third party (a
              "complainant") asserts to the applicable
              Provider, in compliance with the Rules of
              Procedure, that

               (i) your domain name is identical or
              confusingly similar to a trademark or service
              mark in which the complainant has rights; and

              (ii) you have no rights or legitimate interests
              in respect of the domain name; and

              (iii) your domain name has been registered
              and is being used in bad faith.
 CS(OS) No.1164/2001                             Page No.7




                In   the   administrative    proceeding, the
                complainant must prove that each of these
                three elements are present."



10.     Clause 4 mandates that an applicant must agree to submit to

mandatory administrative proceeding, if a third person makes a

complaint. Administrative proceedings are initiated, when in a

complaint it is asserted that conditions of clause 4 (a) are satisfied.

Domain name registered in favour of the applicant can be cancelled

or transferred on satisfaction of the three conditions mentioned in the

sub clause „a‟. Onus is on the complainant to prove that the three

elements are present.


11.          Sub-clause „b‟ of Clause 4 of the policy1                               lists four

circumstances regarded as evidence of registration and use of

1
  *b. Evidence of Registration and Use in Bad Faith. For the purposes of Paragraph 4(a)(iii), the
following circumstances, in particular but without limitation, if found by the Panel to be present,
shall be evidence of the registration and use of a domain name in bad faith : (i) circumstances
indicating that you have registered or you have acquired the domain name primarily for the
purpose of selling, renting, or otherwise transferring the domain name registration to the
complainant who is the owner of the trademark or service mark or to a competitor of that
complainant, for valuable consideration in excess of your documented out-of-pocket costs
directly related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or
service mark from reflecting the mark in a corresponding domain name, provided that you have
engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of
a competitor ; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial
gain, Internet users to your web site or other on-line location, by creating a likelihood of
confusion with the complainant's mark as to the source, sponsorship, affiliation, or
endorsement of your web site or location or of a product or service on you web site or location.
 CS(OS) No.1164/2001                 Page No.8



domain name in bad faith. These circumstances are not inclusive or

exhaustive. ICANN is not a participant before the administrative panel

or in the administrative proceedings and is not liable for the decisions

rendered by the administrative panel. Clause 4 (i) of the Policy

stipulates that the administrative panel decision is limited to

cancellation of domain name of the applicant or for transfer of the

said domain name to the complainant. No other relief can be granted

by the administrative panel.


12.       Clause 3, Clause 4(k) and Clause 5 of the Policy read as

under:-


          Clause 3

              "3. Cancellations, Transfers, and Changes.
              We will cancel, transfer or otherwise make
              changes to domain name registrations under
              the following circumstances:

          a. Subject to the provisions of Paragraph 8, our
             receipt of written or appropriate electronic
             instructions from you or your authorized agent
             to take such action;
          b. Our receipt of an order from a court or arbitral
             tribunal, in each case of competent
             jurisdiction, requiring such action; and/or
          c. Our receipt of a decision of an Administrative
             Panel requiring such action in any
             administrative proceeding to which you were a
             party and which was conducted under this
             Policy or a later version of this Policy adopted
 CS(OS) No.1164/2001                 Page No.9



              by ICANN. (See Paragraph 4(i) and (k)
              below.)

              We may also cancel, transfer or otherwise
              make changes to a domain name registration
              in accordance with the terms of your
              Registration Agreement or other legal
              requirements."

Clause 4(k) :

              "k. Availability of Court Proceedings. The
           mandatory administrative proceeding requirements
           set forth in Paragraph 4 shall not prevent either you
           or the complainant from submitting the dispute to a
           court of competent jurisdiction for independent
           resolution before such mandatory administrative
           proceeding is commenced or after such proceeding
           is concluded. If an Administrative Panel decides that
           your domain name registration should be canceled
           or transferred, we will wait ten (10) business days
           (as observed in the location of our principal office)
           after we are informed by the applicable Provider of
           the Administrative Panel‟s decision before
           implementing that decision. We will then implement
           the decision unless we have received from you
           during that ten (10) business day period official
           documentation (such as a copy of a complaint, file-
           stamped by the clerk of the court) that you have
           commenced a lawsuit against the complainant in a
           jurisdiction to which the complainant has submitted
           under Paragraph 3(b)(xiii) of the Rules of
           Procedure. (In general, that jurisdiction is either the
           location of our principal office or of you address as
           shown in our Whois database. See Paragraphs 1
           and 3(b)(xiii) of the Rules of Procedure for details.)
           If we receive such documentation within the ten (10)
           business day period, we will not implement the
           Administrative Panel‟s decision, and we will take no
           further action, until we receive (i) evidence
           satisfactory to us of a resolution between the
 CS(OS) No.1164/2001                 Page No.10



           parties; (ii) evidence satisfactory to us that your
           lawsuit has been dismissed or withdrawn; or (iii) a
           copy of an order from such court dismissing your
           lawsuit or ordering that you do not have the right to
           continue to use your domain name."

Clause 5

              "5. All Other Disputes and Litigation. All
              other disputes between you and any party
              other than us regarding your domain name
              registration that are not brought pursuant to
              the mandatory administrative proceeding
              provisions of Paragraph 4 shall be resolved
              between you and such other party through
              any court, arbitration or other proceeding that
              may be available."




13.     As per clause 3, ICANN will cancel, transfer or make changes

to a registered domain name where (a) the registrant himself makes a

request, (b) an order of the court or a tribunal of competent

jurisdiction requires such action and (c) when an order is passed by

an administrative panel. Use of the word "and/or" in clause 3

indicates that sub-clause „a‟ ,„b‟ and „c‟ are independent and distinct.


14.    Clause 5 stipulates that disputes other than disputes relating to

domain name, cannot be made subject matter of mandatory

administrative proceedings. All other disputes have to be resolved by

"you"-the registrant and the other party through court, arbitration or

any other proceedings. Administrative proceedings are restricted to

the question of domain name.
 CS(OS) No.1164/2001                Page No.11




15.     Clause 4(k) states that mandatory administrative proceedings

shall not prevent the registrant or the complainant from raising a

dispute before a court for independent resolution before or after

mandatory administrative proceedings. The word "concluded" used in

the first sentence of Clause 4(k), is a pointer that parties have right to

go to court, even after administrative proceedings have concluded

and a decision is rendered. Latter part of sub-clause (k) states that

ICANN shall wait for a period of ten days before implementing a

decision of the administrative panel to cancel or transfer the domain

name and within this period, the registrant can submit certified

document that he has commenced a law suit or legal proceedings

against the complainant. The use of the word "you" in Clause 4(k)

refers to the registrant in contradiction to the complainant. The last

part of the said sub-clause stipulates that the registrant can

commence a law suit in a jurisdiction to which the complainant has

submitted under paragraph 3(b)(xiii) of the Rules of Procedure.

Paragraph 3(b)(xiii) of the Rules of Procedure (excluding other

paragraphs) reads as under:-


              Rule 3. The Complaint
 CS(OS) No.1164/2001                  Page No.12



       (b) The complaint shall be submitted in hard copy and
       (except to the extent not available for annexes) in
       electronic form and shall:

          (xiii)      State that Complainant will submit, with
                      respect to any challenges to a decision in
                      the administrative proceeding canceling or
                      transferring the domain name, to the
                      jurisdiction of the courts in the Mutual
                      Jurisdiction."




16.     The term "mutual jurisdiction" for the purpose of the Rules has

been defined in Paragraph 1 as under:-


              "Mutual Jurisdiction means the jurisdiction
            either (a) at the principal office of the Registrar (if
            the domain-name holder has submitted in its
            Registration Agreement to that jurisdiction for
            court adjudication of disputes concerning or
            arising from the use of the domain name) or (b) at
            the location of the domain-name holder‟s address
            as shown for the registration of the domain name
            in Registrar‟s Who is database at the time of the
            complaint (if the domain-name holder has not
            submitted to such jurisdiction in the Registration
            Agreement)."



17.    Accordingly, when the plaintiff made the complaint to WIPO,

under Rule 3(b)(xiii) they agreed to submit to the jurisdiction of the

courts of mutual jurisdiction i.e. courts located at the principal office of

the Registrant as in the present case the domain name holder had

submitted to their jurisdiction in the Registration agreement. In this
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connection, learned counsel for the defendants had brought to my

notice, amendment made by the plaintiff to the complaint on 2nd May,

2001, incorporating the following clause :-

               "In accordance with Paragraph 3(b)(xiii) of the
              Rules, the Complainant agrees to submit only with
              respect to any challenge that may be made by the
              Respondent to a decision by the Administrative

Panel to transfer or cancel the Domain Name that is the subject of this Complaint to the jurisdiction of the courts in the location of the principal office of the Registrar."

(This document was not filed with the list of documents by the

defendants but was with the consent of the parties placed on record

at the time of arguments. For the sake of convenience the document

is marked Exhb. „E‟).

18. The aforesaid undertaking was in terms of Rule 3(b)(xiii).

19. Rule 3(b)(xiii) and the undertaking reveals that it will apply only

when the registrant decides to challenge a decision of the

administrative panel to transfer or cancel the domain name and in

such cases the complainant has to agree to submit to a court of

mutual jurisdiction i.e. the place where principal office of the registrar

is located, if the registrant has agreed and in other cases, the place of

registrant‟s address as shown in the data base at the time of the

complaint. For the said Rule and the undertaking to apply, there

should be a decision of the administrative panel to transfer or cancel CS(OS) No.1164/2001 Page No.14

the domain name. The aforesaid undertaking and Rule 3(b)(xiii) will

not apply, if the complaint is dismissed. When a complaint case is

dismissed, the Rules and undertaking quoted above do not prescribe

or fix a court of mutual jurisdiction. The complainant can take action

against the registrant in a court of competent jurisdiction as per

private international law or municipal law. If the intention of the Rules

is to confer exclusive jurisdiction in the court of mutual jurisdiction

even when a complaint is dismissed, they would have been worded

differently. The words "any challenge which may be made by the

respondent", cannot be replaced by the words "any challenge made

by the parties" or "complainant". Similarly, instead of the words

"decision of the administrative panel to transfer or cancel domain

name" the words "any challenge to the decision of the administrative

panel" would have been used. The words cannot be modified and

amended to read that any challenge or litigation by the complainant

against the registrant can be exclusively in the court of mutual

jurisdiction as defined in the Rules or the undertaking.

20. It is not possible to accept the contention of the defendant that

the decision of the administrative panel is an award or a binding

decision which operates as res judicata. It is not adjudication is a

strict sense. Parties do not appear and address arguments before the

administrative panel. No evidence is recorded. There is no cross

examination. Decision of the administrative panel is an administrative CS(OS) No.1164/2001 Page No.15

decision, which is open to challenge in a court of law if the domain

name is cancelled/transferred. When a complaint is dismissed, the

complainant, if he is not satisfied with the decision, is at liberty to

initiate legal proceedings against the registrant therein in accordance

with law in a court of competent jurisdiction. ICANN under Clause 3 of

the policy will cancel or transfer registration on decision by a court of

competent jurisdiction requiring such action. Finality is not attached to

the decision of the administrative panel. For res judicata to apply, the

decision between the parties should have attained finality. Civil suit is

maintainable before and after administrative proceedings. It is also

not possible to accept the contention of the defendants that the

decision of the administrative panel is an award. There is no

arbitration agreement between the parties. Administrative panel is not

an arbitrator. There is no adjudication of mutual rights by an

arbitrator. The words of the Policy itself indicate and are a pointer that

the decision of the panel is administrative. Registration of domain

name is an administrative process and when a challenge is made to

the registration of the domain name, an administrative decision is

taken on the basis of parameters or guidelines. It cannot be said that

the administrative decision is an award which can be enforced as a

domestic award or as an international award or is recognized under

Section 43 of the Arbitration and Conciliation Act, 1996. It is also not

a protective shield that bars or prohibits court proceedings. Clause CS(OS) No.1164/2001 Page No.16

4(k) of the Policy permits court proceedings during pendency of a

complaint or even after decision of the complaint. The object behind

the Policy is to ensure expeditious, cheap and speedy disposal of

complaints regarding registration of domain name. Policy creates a

contract based scheme for addressing disputes between the domain

name registrants and third parties challenging the registration and

use of domain name. The unique contractual arrangement renders

the provision of judicial review of arbitration awards inapplicable. Law

recognizes that there can be decisions, which are not awards or court

decisions (Refer, K.K. Modi versus K.N. Modi, reported in (1998) 3

SCC 573).

21. Plaintiff had filed a complaint before WIPO on or before 1st May,

2001. But this fact was not disclosed in the plaint filed on 31st May,

2001. The reason given by the plaintiff is mistake on the part of the

officers who were involved in filing of the plaint as it is claimed that

they were not aware of the said fact. The plaintiff should have been

careful but I am not inclined to deny relief to the plaintiff on this

ground alone for the date of the decision by the administrative panel

is 25th June, 2001 i.e. after filing of the Suit and grant of the ex parte

injunction order. Defendants were party to the complaint proceedings

and therefore were aware. Plaintiff has not gained or taken

advantage by not mentioning about the complaint before the

administrative panel. Policy has also been interpreted.

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Passing Off

22. Passing off is a common right which protects goodwill and

reputation of a person and prevents dishonest or improper use of a

goodwill by a third person. The principle is "a man cannot sell his own

goods on the pretence that they are goods of another man".

23. For establishing a case for passing of, the plaintiff is required

to prove (a) goodwill, (b) deception by a third person and (c) damage

or possible damage to the claimant/plaintiff. The three requirements

are inter connected and causal connection between goodwill,

deception and damage or possible damage should be established. A

claim of passing off requires adjudication into the nature and extent of

the plaintiff‟s goodwill in a mark, label etc., deception or misstatement

made by the defendant with reference to goodwill of the plaintiff and

whether it has caused or is likely to cause injury or loss to the

goodwill of the plaintiff. The nature and extent of goodwill,

misstatement and deception made is substantially a question of fact.

Lord Oliver in Reckitt and Colman versus Borden reported in

(1990) RPC 341 had explained classical trinity of reputation,

deception and damage in the following words:-

"The law of passing off can be summarised in one short general proposition-no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or CS(OS) No.1164/2001 Page No.18

reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get up is recognised by the public as distinctive specifically of the plaintiffs‟ goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiffs‟ identity as the manufacturer or supplier of the goods or services is immaterial, so long as they are identified with a particular source which is in fact the plaintiffs. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action that he is likely to suffer, damage by reason of the erroneous belief engendered by the defendants‟ misrepresentation that the source of the defendants‟ goods or services is the same as of the source of those offered by the plaintiff."

24. Goodwill includes benefit or advantage of a name and

reputation in business. It is an attractive force, which distinguishes

the owner from others. Goodwill can vary, can be less or more

depending upon a number of factors like period of time, acceptability,

honesty, quality, extent of publicity etc. (Refer, S.C.Cambatta

versus CEPT reported in (1961) 2 SCR 805). Plaintiff to succeed in

a claim for passing off is required to prove and establish goodwill and CS(OS) No.1164/2001 Page No.19

the mark associated or identified with the plaintiff is distinctive of

plaintiff‟s goods or services as a source of the said goods or services.

The mark or label should distinguish the plaintiff from others.

25. The word NIVEA is a coined or an invented word and not

a generic, dictionary or a descriptive word. The said word was

adopted nearly 100 years ago by the plaintiff in 1911. The word

NIVEA is derived from a Latin word "nix, nivis". The plaintiff has

placed on record ample evidence and material to establish and it is a

matter of common knowledge that the word/mark NIVEA is a

household name, in India and worldwide. It has been extensively

advertised worldwide and is registered in over 110 countries including

India. The plaintiff enjoys goodwill and the word NIVEA is recognized

and accepted by the general public as associated with plaintiff. The

said mark stands for high quality, commands respect and is

distinctive of plaintiff. Middle class and upper middle class in India

have been using NIVEA products and the same are regarded as

products of good quality and reputation.

26. The second requirement in the trinity is deception.

Deception implies misstatement by the defendant so as to take

benefit and advantage of plaintiff‟s goodwill. Deception means telling

falsehoods about oneself viz. claiming association or connection with

the third person to advantage of his reputation. A statement or

representation becomes deceitful, when it calculated to mislead users CS(OS) No.1164/2001 Page No.20

or prospective users by taking advantage of goodwill and reputation

of the plaintiff. Misrepresentation can be direct as in case of

counterfeit or indirect when the mark or label of the plaintiff is

imitated, is descriptively, phonetically or visually similar.

Misrepresentation can be implied and can take various shapes and

forms but is established when the defendant adopts and starts using

distinctive features identified with the plaintiff or his goods to market

his goods or services so as to take advantage of the reputation and

goodwill of the plaintiff. Misrepresentation takes place when

consumers or some of them, believe or are likely to believe that the

defendant‟s goods or services are associated or are from the same

source as plaintiff‟s. When a representation is made so as to cause

confusion about the source of goods/services, misrepresentation

takes place. No one has a right to confuse consumers to make them

believe that he is connected or associated with the plaintiff to take

advantage of the faith in plaintiff‟s reputation. Misrepresentation

infringes public rights and misleads them. A trader or a service

provider should be fair in his dealings and not mislead or tell

falsehoods about oneself.

27. Common law protects freedom of choice and rejects claim of

monopoly over use of words and marks. While deciding question of

misrepresentation or deception these two rights have to be balanced,

depending upon facts of each case. This requires examination of CS(OS) No.1164/2001 Page No.21

nature and type of goods, services, area of business, location, extent

of goodwill, class of consumers etc. There are cases where passing

off claim has failed because goods/services are different or because

of the nature of consumers possibility of confusion does not exist but

in other cases inspite of difference in activities/goods, plaintiffs have

succeeded.

28. Misrepresentation cannot exist in vacuum and is co-relatable to

the extent, value and nature of goodwill of the plaintiff. Greater the

goodwill, greater is the need to protect and wider is the cover and the

field of protection. Household, well known or popular marks are given

greater protection, when they cause to represent quality and have

become synonymous with the public to represent a particular source.

Some marks are such that the public relates any product carrying the

said name/mark would emanate from the said source. Such marks

may be few but protective umbrella in such cases is wider and

extensive. These are marks where line between the goods and the

name is blurred. The mark starts to represent the source or the

person than merely a particular or specific type of goods or services.

Mahindra & Mahindra Paper Mills Ltd. versus Mahendra &

Mahendra Ltd. reported in AIR 2002 SC 117, Ciba Geigy Ltd.

versus Surinder Singh reported in 1998 PTC 545, Daimler Benz

versus Hybo Hindustan reported in AIR 1994 Delhi 239, Honda

Motors co. Ltd. versus Charanjit Singh and Others reported in CS(OS) No.1164/2001 Page No.22

101 (2002) DLT 359 etc. are all cases where products/goods were

different but the marks involved were household names that have

come to embody reputation of pre-eminent excellence and quality

and therefore given broader protection. The mark NIVEA is

recognized by all as a product of high quality and one which has

international acceptance and recognition. The plaintiff who has

developed and nurtured this mark to make it a household name and

associate the name with products of high quality, is entitled to

protection from third persons who want claim benefit of its reputation.

The word NIVEA is a associated with the plaintiff right from the very

beginning i.e. from 1905 or at least in India from 1943.

29. For deciding misrepresentation or deception, why and reason

for adoption of the mark/label by the defendant is relevant, though

unintentional misrepresentation does not protect and save a trader.

Wrongful or deliberate adoption of another‟s coined or invented mark

is viewed strictly. The word NIVEA was coined by the plaintiff. It is

not the case of the defendants that the word NIVEA is a dictionary

word and only with the passage of time it has acquired

distinctiveness. In case of coined words, the question of monopoly

and justification for claiming monopoly is not relevant. The

defendants have tried to justify adoption of the word NIVEA from the

alphabet "N" in the name of Narender, one of the partners of

defendant No.2. It is also claimed that the words "VE" have been CS(OS) No.1164/2001 Page No.23

taken from the name Vemla middle name of wife of defendant No.2,

other partner of the company. It is also claimed that the alphabet "A"

is taken from the name of Mr. Ajay, one of the partners of the NIVEA

Trading Company. The above contention is too spacious and

farfetched to be accepted. Defendants are Indians, who have been

using NIVEA cream and cosmetics for last more than 50 years. They

belong to middle class who are familiar and aware that the said mark

commands respect as a high quality international product. The initial

adoption by the defendants is therefore fraudulent and wrongful. The

explanation given for the said adoption by the defendants is rejected.

It is quite clear that the defendants have deliberately, intentionally

and wrongly adopted the mark/word NIVEA which belongs to and is

owned by the plaintiff. The defendants have made a

misrepresentation by adopting and using the word/mark "Nivea

International". They have tried to mislead by claiming business

connection or association with the plaintiff.

30. It was submitted by the defendants that the plaintiffs have failed

to produce any member of public, who was actually deceived or

mislead and, therefore, misrepresentation and deception has not

been established. Misstatement or deception has to be judged by the

Court, keeping in mind consumers of services or goods of the

defendant. The standard applied is not of a vigilant consumer but an

unwary normal consumer of the products or services offered by the CS(OS) No.1164/2001 Page No.24

defendants. Further, test is not only deception but likelihood of

deception. Question of misrepresentation requires examination of the

two words/marks or labels to find out whether a purchaser of

defendants‟ articles/services can be deceived or is likely to be

deceived or mislead. This is decided by noticing the distinctive

features used by the plaintiff in his mark, name, label, etc. and

whether there is resemblance of identity of the said distinguishing

features in the mark, name or label, etc. of the defendants. A normal

consumer is a man of imperfect recollection and the test is whether,

considering the similarities between the two marks, a consumer is

likely to get confused or mislead.

31. Counsel for the defendants had submitted that the field of activity of the plaintiff and defendants are different. While the plaintiffs are marketing cosmetic products, the defendants are providing educational services to students, who want to study abroad. It was, thus submitted that there was no misrepresentation. In view of the nature and extent of goodwill, the said argument has to be rejected. As stated above, the present case is one of fraudulent adoption of the mark NIVEA by the defendants and not of unintentional infringement, therefore, the fact that the activities of the plaintiff and defendants, is not that important. Fraudulent adoption is frowned upon and may not be accepted even when there is difference between the fields of activities of the parties. To succeed in a suit for passing off, it is not necessary that both parties should be in the same line of business. Absence of common business is not fatal but one of the relevant facts which should be taken into consideration. The test is not whether the parties are in the same line CS(OS) No.1164/2001 Page No.25

of business or in connected line of business but whether there is likelihood of confusion or the defendants has tried to mislead. In cases of coined words, a plaintiff with passage of time and goodwill can get exclusively identified by the said mark. The mark/word NIVEA is associated with the plaintiff. Defendants are trying to take advantage and benefit of the said goodwill by adopting the mark NIVEA for educational services provided by them. Looking at the similarity of the two marks, fraudulent adoption of the said mark by the defendants, the nature and extent of the goodwill of the plaintiff, nature and difference of trade by itself is not sufficient to defeat the suit for passing off. The consumers or customers of the defendants may be educated and belong to middle class, both lower and upper, but use of the mark "NIVEA International" by the defendants will cause or is likely to cause confusion and belief that the defendants are connected or associated with the plaintiff. A person belonging to the middle class, who has been using or has heard of NIVEA cream/cosmetics, will normally assume some connection between the plaintiff and the defendants. The defendants are trying to say something about themselves which is not correct i.e. defendants are associated or connected with the plaintiff. Defendants are trying to take advantage of the attraction in the mark Nivea. Defendants are trying to project a connection between themselves and the plaintiff.

32. The word NIVEA is common to both the plaintiff and the

defendants. The use of the word "International" by the defendants

with the word NIVEA does not in any manner distinguish the

defendants from the plaintiff. On the other hand, word "International"

symbolizes and conveys that the defendants have international

presence and when used with the word NIVEA amounts to a

representation that the defendants are or may be associated or CS(OS) No.1164/2001 Page No.26

connected with the plaintiff, an international company having

presence all over the globe. The fact that NIVEA products are

available internationally all over the world, causes confusion about

connection between education abroad and the plaintiff company.

Several international companies or multinational companies have set

up universities and colleges.

In these circumstances, it is held that the plaintiff has been able

to establish misrepresentation on the part of the defendants.

33. The third aspect is whether the plaintiff has suffered any

damage or injury because of false representation made by the

defendants. Actual damage need not be proved and possibility of

damage is enough. Here again argument of the defendants that no

witness has been produced by the plaintiff to prove actual damage is

without merit. Damage refers to injury and loss caused to the

reputation or trade of the plaintiff. Injury is to the goodwill of the

plaintiff and can take place by various modes like diversion of sales,

misappropriation of business reputation or misappropriation of

personality. Injury is suffered by erosion of the distinctiveness of the

brand name and debasement of the reputation. Depreciation or

gradual damage, erosion or delusion of plaintiff‟s name causes injury.

When a defendant acts with the intention to deceive the public, there

is reasonable possibility of injury. In the present case, as already

stated above, is one of fraudulent adoption and therefore I accept the CS(OS) No.1164/2001 Page No.27

argument of the plaintiff that there is injury as the defendants had

acted in the manner calculated to deceive.

Damage/loss in the present case can be presumed as a natural

consequence of misrepresentation. The present case is one of

misappropriation of business reputation of the plaintiffs by the

defendants by using the mark NIVEA International. The present case

is also one of erosion and delusion of exclusiveness, which the

plaintiff enjoys in the mark NIVEA, a coined word created by the

plaintiff. It is invasion of this right of the defendants which has

caused injury to the plaintiff. Thus, the third trinity is also satisfied in

the present case.

34. Passing off protection also extends to domain names. The

above reasoning will equally apply to the domain name of the

defendant‟s www.niveainternational.com. The administrative panel

has held that the plaintiff has been able to establish the identical or

confusing similarity but not illegitimacy. For the said finding, the

administrative panel has relied upon official government certificates

and correspondence of the defendants. Government certificates

granting licences to open a shop, etc. is not a pronouncement or a

judgment on legitimacy of the mark. The question of misrepresentation

has been examined in detail above, while deciding the question of passing

off. Issues are accordingly decided in favour of the plaintiff.

Issue no.5
 CS(OS) No.1164/2001               Page No.28

35. Learned counsel for the defendants submitted that the prayer

for injunction should be dismissed on the ground of delay, laches and

acquiescence. It was submitted that the defendants have been using

the word NIVEA since 1973 when father of defendant no.1 along with

some of his relatives started a partnership firm M/s Nivea Trading

Company for trade in wrist watches and in 1974, the said partnership

firm had obtained a shop and establishment license. It was submitted

that thereafter in 1977, mother of Defendant No.1 herein Mrs. Punita

Assan Sukhwani had applied for registration of the trademark NIVEA

in Class 14 (watches and jewellery) which was granted under the

Trade and Merchandise Mark Rules, 1958 and the said registration

continues. It was stated that in 1979, the partnership firm had

launched „NIVEA wrist watches‟ in Mumbai and a news article was

published. In 1981, the name of the partnership firm was changed to

„Nivea Time‟. It was stated that the firm name was changed to Niveas‟

in 1983. In 1989, the defendant no.2 partnership firm "Nivea

International" was established and the said firm has been registered

with Government of India under the import-export code and has been

filing income tax returns, etc.

36. The question of delay, laches and acquiesce has been

examined in several cases. Whenever these pleas are raised, each

case is required to be examined on its own merit (Refer, Khoday

Distilleries Limited versus Scotch Whisky association & Others CS(OS) No.1164/2001 Page No.29

reported in 2008(37) PTC 413(SC) and Ramdev Food Products

Pvt. Ltd. versus Anand Bhai Ram Bhai Patel and others reported

in (2006) 8 SCC 726).

37. Delay alone may not be sufficient to deny relief, unless it has

caused prejudice to the defendant who in view of the delay has come

nurture a belief that the plaintiff has consciously given up his rights to

claim infringement or passing off. In Ramdev's case (supra), the

Supreme Court has observed that „acquiescence‟ is a facit of delay,

when a party allows the other to invade his right and spend money

and the conduct of the party is such that it is inconsistent with the

claim for exclusive rights for trademark, trade name. Mere silence or

inaction does not amount to acquiescence. Action and conduct of

both parties have to be examined to determine whether it would be

unjust and unequitable to injunct the defendants on the ground of

delay. Lapse of time unless compounded with other factors is

normally is not taken as a bar to grant of injunction. In M/s.Ansul

Industries versus M/s. Shiva Tobacco Company (FAO

No.228/2005) pronounced on 16th January, 2007 the following

principles were culled out:

"In view of the entire case law discussed above, the following principles of law emerge:-

i. Mere delay is not sufficient to defeat grant of injunction in cases of infringement of trade mark. Delay is not a bar to enforce and claim a legal right.

CS(OS) No.1164/2001 Page No.30

ii. Consent in addition to other statutory defences is a complete defence to action for infringement.

iii. Consent may be expressed or implied but inaction in every case without anything more does not lead to an inference of implied consent. Implied consent means conduct inconsistent with claim of exclusive right over the trade mark, trade name etc. Implied consent implies standing by or allowing the defendant to invade rights and by conduct encouraging the defendant to expend money, expand business, alter their condition etc. in contravention of the rights of the proprietor. In the case of Power Control Appliances versus Sumeet Machines (P) Limited (supra), Supreme Court has held that acquiescence implies positive act and not merely silence or inaction as is involved in laches.

iv. Defences under the common law are also available to the defendant. Prior user is a valid defense.

v. Balance of convenience between the parties should be taken into consideration by the Court, while deciding the question of grant of injunction. Unexplained laches accompanied by prejudice and/or other reasons can be a ground to deny injunction. However, prejudice in such cases does not mean mere simplicitor delay. Onus in this regard is on the defendant.

vi. Where initial adoption by the defendant itself is vitiated by fraud and/or is dishonest, delay is not a valid ground to allow misuse. If user is at the inception is tainted by fraud and dishonesty, continuous use does not bestow legality.

          vii.          Interest of general public who are the
                      purchasers and buyers has to be protected.
                      In       case        to     protect      general
                      public/consumers, injunction order is
                      required to be passed, delay by itself is not
                      un-surpassable obstacle."
 CS(OS) No.1164/2001                 Page No.31

38. In the present case it has been held that the initial adoption by

the defendants was dishonest. When there is dishonesty or fraud in

the initial adoption of a trade name, plea of laches and delay normally

is rejected. If the initial adoption itself is malafide and tainted, it does

not become valid and legal with passage of time. The defendants

were also always conscious of their wrong and had continued to use

the mark NIVEA on their own peril and risk. In these circumstances,

plea of delay, laches and acquiescence cannot be accepted to reject

claim for injunction.

39. Further, defendants have not been able to establish

acquiescence on the part of the plaintiff. There is no material and

evidence to establish that the turnover from the shop or sales of

Nivea watches was substantial, the mark had become well known to

be associated independently with the defendants and the mark and

its association with the defendants was allowed to grow and expand

with approval of the plaintiff. Defendants to justify their claim have

filed multiple copies of same documents, which does not further their

case. Some relatives of the defendants may have started using the

word/mark NIVEA for their partnership firm or even as a name of their

shop but it cannot be said that defendant no.1 or defendant no.2 had

come to believe that they too can adopt the same mark. Moreover,

relatives of defendant no.1 are no longer manufacturing NIVEA

watches. Defendant No.1‟s mother has not transferred or assigned CS(OS) No.1164/2001 Page No.32

trade mark Nivea under class 14 in favour of the defendants.

Defendants are not manufacturing watches. Prior user‟s rights are

protected and a claim for passing off is maintainable by a prior user

against a registered user (Refer, N.R. Dongre versus Whirlpool

Corporation reported in 1996 PTC 16(SC). Prejudice that may be

caused to the defendants is a relevant consideration but the

defendants for last six years are using a different trade name.

Moreover, general public interest does not support the defence of the

defendants. General public should not be confused and be under any

doubt.

Relief

40. In view of the above findings, the Suit filed by the plaintiff is partly decreed. Decree of permanent injunction is passed in favour of the plaintiff and against the defendants in terms of prayer Clause „a‟ and „b‟. The defendants will within a period of four weeks from today file an affidavit stating that they have destroyed all blank and unutilised papers and documents bearing the offending mark/tradename NIVEA and have applied to authorities for amendment/modification. Learned counsel for the plaintiff has not pressed his prayer for rendition of accounts. Plaintiff will be entitled to costs.

                                              (SANJIV KHANNA)
                                                  JUDGE

NOVEMBER              14, 2008.
NA/P