Delhi High Court
Rhizome Distilleries P. Ltd & Ors. vs Pernod Ricard S.A. France & Ors. on 23 October, 2009
Author: Vikramajit Sen
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) No.484/2008 & CM Nos.17352/08, 3429/09
RHIZOME DISTILLERIES P. LTD
& ORS. ....Appellant through
Mr. Rajiv Nayyar, Sr. Adv.
with Ms. Tusha Malhotra,
Adv.
versus
PERNOD RICARD S.A. FRANCE
& ORS. ...Respondent through
Mr. Sudhir Chandra, Sr. Adv.
with Mr. Hemant Singh,
Ms. Mamta R. Jha &
Mr. Manish K. Mishra, Advs.
AND
+FAO(OS) 497/2008 & CM 17697/2009
DURGA LIQUORS INDIA(P) LTD ....Appellant through
Mrs Srikala G.Kumar, Adv.
versus
PERNOD RICARD S.A.FRANCE
AND OTHERS ....Respondent through
Mr. Sudhir Chandra, Sr. Adv.
with Mr Hemant Singh and
Ms Mamta R. Jha Advs.
% Date of Hearing : October 14, 2009
Date of Decision : October 23, 2009
CORAM:
* HON'BLE MR. JUSTICE VIKRAMAJIT SEN
HON'BLE MR. JUSTICE V.K. JAIN
_________________________________________________________________________________________________
FAO(OS)484 & 497/2008 Page 1 of 37
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
VIKRAMAJIT SEN, J.
1. On October 14, 2009, Learned Counsel for the Appellant
in FAO(OS) 497/2008 had concluded arguments by making a
statement to the effect that she has instructions to adopt the
arguments addressed by Mr Rajiv Nayyar, Learned Senior
Counsel appearing for the Appellant in FAO(OS) 484/2008.
This Appeal has been filed by the Defendants who the learned
Single Judge had restrained from manufacturing, selling,
offering for sale, advertising, directly or indirectly dealing in
whisky or any other alcoholic beverages under the trademark
Imperial Gold or the impugned label/trade dress pertaining
thereto or any other trademark/label/trade dress as may be
deceptively similar to the trademark of the Plaintiff/Respondent
viz. IMPERIAL BLUE, IMPERIAL RED or ROYAL STAG.
2. The competing or offending products are whiskies
belonging to the rival parties, which are bottled in the following
styles, first front and second back:-
_________________________________________________________________________________________________
_________________________________________________________________________________________________
3. The Plaint describes the action as a suit for permanent
injunction restraining infringement of registered trademark,
copyright, passing off, dilution, unfair competition, rendition of
accounts of profits , deliver-up etc. The Plaintiffs are indeed a
part of an international group selling sundry alcoholic
beverages across the Globe. Some of their brands are not only
well-known but are leaders in the market, such as ROYAL
SALUTE, CHIVAS REGAL, BEEFEATER, BALLANTINES,
KALHUA, BLENDERS PRIDE etc. It is averred that one of the
most popular whiskies sold by the Plaintiffs in India since 1997
is IMPERIAL BLUE which is a registered trademark and has
"come to be associated with, and become a quintessential part
of the plaintiff no.1 successful and firmly established business of
manufacture and sale of whisky." IMPERIAL BLUE appears to
have been accorded registration in the Benelux and Nepal. So
far as India is concerned, the following chart is fully
informative:-
REGISTRATION IN INDIA
Trade Regn. No. Date Class Goods
Mark
IMPERIAL 751781 12/02/1997 33 Spirits and
BLUE liquers
IMPERIAL 1318300 01/11/2004 32 Drinking water
BLUE included in class
IMPERIAL 1282836 07/05/2004 9 Compact discs,
BLUE audio and video
cassettes,
_________________________________________________________________________________________________
photograph
records etc.
IMPERIAL 1377908 17/08/2005 32 Beers, minerals
RED and aerated
waters and other
non alcoholic
drinks, fruit
drinks and fruit
juices, syrups and
other
preparations for
making beverages
included in class
4. The Plaint further sets out the turnover of IMPERIAL
BLUE for the period 1998 to 2007 which increased manifold
from Rupees 12.80 crores to Rupees 317.88 crores. As is to be
expected, promotional and marketing expenses incurred by the
Plaintiffs also run into several crores of Rupees. The Plaint then
unfolds that "international whisky manufactured and marketed
by the plaintiff is under the trademark ROYAL STAG which is
very popular in the lower price segment and best known for
smooth taste..... the trademark ROYAL STAG is coined mark
having no significance or meaning in common parlance and no
correlation to the character or quality of whisky marketed
thereunder". The Plaintiffs have obtained registration for the
trademark ROYAL STAG internationally as well as in India. In
this regard, it is pleaded in the Plaint that ROYAL STAG label
constitutes an original artistic work within the meaning of
_________________________________________________________________________________________________
Section 2(c) of the Copyright Act, 1957. Since the Plaintiffs have
an extensive trade use since 1995 ROYAL STAG has become
distinctive of the whisky marketed by and originating from the
Plaintiffs and is also available in the United Arab Emirates,
Benelux, Bulgaria, Romania, Oman, Hong Kong, Vietnam etc. In
paragraph 23 of the Plaint, it has been asserted that it had
"come to the knowledge of the plaintiffs in 2nd week of
September, 2008 that the Defendants are manufacturing,
bottling and/or selling whisky bearing the trademark Imperial
Gold which is an imitation of the trademark IMPERIAL BLUE
and IMPERIAL RED and using trade dress which is an imitation
of ROYAL STAG trade dress in respect of colour combination,
get up, shape and design of bottle and ROYAL STAG label". It is
this activity of the Defendants that the Plaintiffs are aggrieved
with.
5. It is next disclosed in the Plaint that the Defendants
Imperial Gold is an imitation of and is structurally, as well as
phonetically, deceptively similar to the Plaintiffs reputed
trademark IMPERIAL BLUE and the registered trademark
IMPERIAL RED. Secondly, the Defendants have imitated the
ROYAL STAG whisky label, both so far as front and the rear
panels are concerned.
_________________________________________________________________________________________________
6. The contention of the Defendants/Appellants is that there
has been a deliberate suppression and concealment of facts in
the Plaint, especially in the context of the contents of paragraph
31 thereof. Therein it has been pleaded that the cause of action
for institution of the present suit arose in the 2nd week of
September 2008 when the plaintiffs‟ field force discovered sale
of Imperial Gold whisky in Hyderabad and Delhi markets.
Emphasis has been laid on the admission in that paragraph that
the plaintiffs had come across the trademark registration
applications when they were advertised in the Trademark
Journal by the Registrar. Although no date is given in this
paragraph, a perusal of paragraph 30 makes it evident that that
incident pertains to February, 2008. It is pleaded that at that
time no goods of the Defendants were found in the market.
7. Mr. Rajiv Nayyar, learned Senior Counsel for the
Appellant/Defendant has contended that the Defendant had
applied under Class-32 in October, 2003 and in class-33 in
January, 2006 and registration was received in April, 2005 and
April, 2006 respectively. An application for Rectification came
to be filed by the Plaintiff as late as in 2008 and the suit was
filed on 3.11.2008. Our attention has also been drawn to the
display of a Notice dated 28.10.2006 by the Excise Department
pertaining to the Defendant‟s Imperial Gold. Letter dated
_________________________________________________________________________________________________
7.3.2006 had been addressed to the Commissioner of
Prohibition & Excise, Hyderabad, by Liquors India Limited
which appears to be the bottlers of the Plaintiff since 2001. The
letter, inter alia, states that it had been noticed "that M/s.
Durga Liquors India (Private) Limited, with Rhizome Distillery
tie up is coming up with a similar label Imperial Gold whisky. If
the label is approved we will be in trouble for our brand in the
market which is similar to our label. In view of the above we
earnestly request you to not to approve the label Imperial Gold
Whisky of M/s. Durga Liquors India (Private) Limited, with
Rhizome Distillery tie up which is imitating our label and
oblige". The letter dated 14.3.2006 of Liquors India Limited
addressed to Commissioner of Prohibition & Excise, Hyderabad
is indeed telling so far as the Plaintiffs are concerned since it
states as follows:-
Sir,
Sub : Withdrawal of objection filed for Label
Registration - Regarding
With reference to the above we have filed an
objection letter for the approval of the Label submitted
by the M/s.Durga Liquors India(P) Ltd., (i.e.) Imperial
Gold Whisky.
We submit that they have submitted us the papers
in which they have obtained the registration Trade
Mark much earlier than us and other relevant papers in
which we have convinced.
_________________________________________________________________________________________________
In this regard we submit that we withdraw the
objection filed and oblige.
It was predicated on these communications that learned Senior
Counsel for the Appellants has imputed full knowledge to the
Respondents of the Appellants‟ brand, ROYAL Imperial Gold as
early as May, 2006. Mr. Sudhir Chandra, learned Senior
Counsel for the Respondents/Plaintiffs, has sought to explain
away these communications on the ground that Liquors India
Ltd. is only their bottler in that region and nothing else. Even if
that is so, it is difficult to believe that Liquors India Ltd. would
not have informed the Respondents of the subject matter of
their Communications since the agency was directly related to
the liquor business. Significantly, a credible response to the
factum of the grant of registration to the Appellant to the
trademark in Class-32 in April, 2005 relating back to October,
2003 is conspicuous by its absence.
8. The second plank of challenge to the case presented by
the Plaintiffs is that they were fully aware of the Defendants‟
action towards any registration of their trademark. In paragraph
31 of the Plaint, it has been averred that the Plaintiffs came
across the trademark registration application filed by Defendant
No.1 for registration of trademarks RHIZOME IMPERIAL
WHITE, RHIZOME IMPERIAL RED and RHIZOME IMPERIAL
_________________________________________________________________________________________________
GREEN towards end of October, 2007 consequent upon their
publication by the Registrar of Trademarks. The Plaintiffs
accordingly opposed all three applications and the outcome of
their opposition is awaited. It is next pleaded that on 16.2.2008
the Plaintiffs came across the application for registration of
RHIZOME Imperial Gold on their publication in the Trademark
Journal. As in the case of other brands, the Plaintiffs‟ case is
that they made enquiries as to whether whisky under the said
trademark RHIZOME Imperial Gold was being sold, as a
consequence of which they gained knowledge of sales in Delhi
and in Hyderabad. It is argued that the Plaintiffs have
deliberately suppressed the Appellants‟ substantial sales of
liquor since 2006. The withdrawal of objections by Liquors India
Limited on 14.3.2006 has been emphasised in this regard. The
contention is that since the Plaintiffs had allowed the Appellants
to build a reputation and substantial sales for its brand, an
injunction ought not to have been granted. Our attention has
been drawn to the grant of a registration from the Registrar of
Trademarks for ROYAL Imperial Gold on 27.4.2005 in Class-33
with effect from 26.12.2002. It also appears that the Deputy
Registrar of Copyright had certified the Appellants‟ label for
RHIZOME Imperial Gold.
_________________________________________________________________________________________________
9. The third ground of attack is that no exclusivity can be
claimed for the use of the word IMPERIAL which is not just to
be found in common parlance, but is also an obvious choice for
whisky etc. because of the laudatory effect it has on the product.
10. Learned counsel for the Appellants has also contended
that the impugned Order tramples upon the statutory power of
the Intellectual Property Appellate Board (IPAB), to which an
Appeal against a registration under the Trade Marks Act, 1999
(„TM Act‟ for short) has been provided for in Section 124.
Section 124 of the TM Act has also been relied upon to canvass
that decision viz.-a-viz. objections pertaining to the invalidity of
such a registration is the preserve of the IPAB. The first sub-
section of Section 124 directs that where there is a plea in a
plaint for invalidating a trademark, in the event that
rectification proceedings are pending, the suit would be stayed
and if no such proceedings are pending and the Court is
satisfied that the plea regarding the invalidity of the registration
of the subject trademark is prima facie tenable, the Court would
raise an issue regarding the same and thereupon adjourn the
case for a period of three months from the framing of the issue
in order to enable the concerned party to apply to the IPAB for
rectification of the registration. The Appellants have buttressed
arguments by referring to Section 28 of the TM Act, the first
_________________________________________________________________________________________________
sub-section of which reposes the right to obtain relief in respect
of infringement of a registered trademark to the person in
whose favour the registration has been granted. Where both
parties have received registration of their respective
trademarks, the third sub-section ordains that neither of them
would be able to setup a case against the other based only on
the registration. It seems to us that it was for these reasons that
the Plaintiffs had given up its challenge predicated on
infringement, and had rested its case for the grant of an
injunction on the common-law relief of passing off. This is
evident from paragraph 12 of the impugned Judgment where it
has been mentioned that though the suit is for infringement of
trademark as well as for passing off, for the purpose of the
interlocutory application, the plaintiffs are pressing for
injunction on account of passing off alone and the relief of
injunction may be granted in favour of the plaintiffs and against
the defendants on account of passing off. It is, therefore, not
permissible to permit Mr. Sudhir Chandra, learned Senior
Counsel for the Respondents, to press the argument that the use
of the word IMPERIAL by the Appellants amounts to
infringement as well as passing off. In these circumstances, it is
significant that the legal opinion, as it presently stands, is that
while the use of IMPERIAL may not be important when
_________________________________________________________________________________________________
considering the relief of infringement, since both adversaries
have received registration for this word, it assumes grave
proportions for the purposes of the relief of passing off.
10. The learned Single Judge has passed a detailed Judgment
after perusing a plethora of precedents cited at the Bar,
returning a finding that the Defendants are clearly guilty of
passing off. The conclusion is based on several considerations,
including that "it is undisputed that the plaintiffs adopted the
trademark IMPERIAL BLUE in the year 1997 and since then the
said trademark has become distinctive of the plaintiffs‟ product;
the plaintiffs have a huge turnover in the sum of Rupees 317
crores in the year 2007; the plaintiffs have registered trademark
for IMPERIAL BLUE and IMPERIAL RED; that the defendants
have either used discarded bottles of the plaintiffs with Seagram
embossed on the bottom of the bottle or have wilfully,
fraudulently and dishonestly manufactured the same". It has
been noted that, on the contrary, the Defendants have emerged
in the market in April, 2006, that is, a decade after the launch of
the Plaintiffs‟ product. As both the parties are manufacturing
and selling whisky in the same area and targeting the same
section of consumers, the learned Single Judge was not
impressed with the aspect of delay and laches for the reason
that the market research disclosed that the Defendants‟ product
_________________________________________________________________________________________________
was not available even in the year 2000 and that it was only in
September, 2008 that the Plaintiffs have come across the
Defendants‟ trademark Imperial Gold. The learned Single Judge
has commented that there is not an iota of evidence on record to
prima facie indicate the launch of the Defendants‟ product in
the year 2006. Reliance has been derived from Midas Hygiene
Industries(P) Ltd.-vs- Sudhir Bhatia, (2004) 3 SCC 90, wherein it
has been opined that "in cases of infringement either of
trademark 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". Most significantly, the learned Single
Judge has held that the argument on behalf of the
Defendants/Appellants is untenable that the word "IMPERIAL"
is a generic term and hence publici juris. In its opinion, the
word IMPERIAL would be "generic only if it is used by a
member of the royal family, but certainly it will be arbitrary
when applied to a whisky and that too, a whisky other than
scotch, and furthermore a whisky in the lower price segment".
The learned Single Judge has found the employment of the
prefix RHIZOME irrelevant, keeping in view the overall trade
dress of the rival bottles. The learned Single Judge has also
_________________________________________________________________________________________________
rejected the argument that Section 124(5) precludes the Court
from granting an injunction, but in view of the specific noting
that the claim for infringement had been given up, this debate,
in our opinion, has become superfluous. The learned Single
Judge voiced the opinion that sub-standard whisky may prove to
be more injurious than a sub-standard medicinal or
pharmaceutical product, and may lead to lethal consequences,
even a wholesale disastrous one. With respect to the learned
Single Judge, this is not the case presented by the Plaintiffs and
may not be factually correct since neither product is injurious to
health due to their respective quality, without prejudice to the
general debate relating to the pernicious nature of alcohol in
general. These observations are indeed a window to the reasons
which pervaded the mind of the learned Single Judge to grant
the injunction.
11. We will first deal with the contentions centring upon the
trade dress of the Plaintiffs ROYAL STAG and the Defendants‟
RHIZOME IMPERIAL BLUE. It seems to us that the similarities
of both labels are such that a customer of modicum memory and
mental capacity would become confused in distinguishing
between them. Learned counsel for the Appellants had
immediately conceded the point, and had offered to change the
label as well as the shape of the bottle. Bottles can be of myriad
_________________________________________________________________________________________________
configuration; they can be round, square, rectangular, flat or
cylindrical bodied, or slim or tall. Bottles can have a long neck
or otherwise, and can be of clear glass or burgundy or green or
any other colour. Learned counsel for the Appellants has stated
that the Appellants are willing to colour their bottles amber and
make them in a short neck shape. Indeed, photographs of the
bottles in which the Appellants are presently marketing its
whisky, have been placed on record and it appears that one of
them is amber with a red cap. So far as the label is concerned,
learned Senior Counsel has filed a variety of samples, one of
which is in gold and amber with RHIZOME Imperial Gold
written in the same font and size on a Shield in contradistinction
to the impugned label in which RHIZOME was in a different
colour and smaller size than Imperial Gold which was also
written in a swirl or ribbon style which was conceivably
confusing with the ROYAL STAG label. Since there is now no
similarity between the ROYAL STAG and RHIZOME Imperial
Gold labelling, we are satisfied that the Defendants can no
longer be accused of passing off so far as these two
marks/labels are concerned.
12. The question still remains whether passing off is possible
predicated on the Plaintiffs‟ other product, viz. IMPERIAL
BLUE, and the fact that the Appellants/Defendants product is
_________________________________________________________________________________________________
RHIZOME Imperial Gold. Although it has not been argued by
Mr. Sudhir Chandra, it is worthy to note that the registration
accorded to the Appellants is Rhizome Imperial Gold (not in
block letters), whereas the Plaintiffs mark is in block letters
IMPERIAL BLUE. We should not be understood to hold that
such a difference would be sufficient to distinguish one product
from another, but when several such features exist, even a
consumer of average intellect may be able to make segregation.
In this light, the Appellants are directed to adhere to the start
case style in contradistinction to block/all uppercase/all capital
style.
13. We are reminded of the decision of the Court of Appeal in
McCain International Limited -vs- Country Fair Foods Limited,
1982 PTC 156. The learned Single Judge had granted
interlocutory relief in a passing off action. The Plaintiff
avowedly was the first to launch „chipped potatoes‟ in the
market which rather than being fried could be baked in the oven
or cooked in a grill. The competing brands were „McCain Oven
Chips‟ and „Country Fair Oven Chips‟. The Court of Appeal was
of the opinion that the case was similar to the term „Flaked
Oatmeal" in Parsons -vs- Gillespie, 1898 AC 239 which was seen
as descriptive. Reference was also made to the use of the word
"slip-on" which was also found to be descriptive; or Hedley‟s
_________________________________________________________________________________________________
Malted Milk as against Horlicks Malted Milk. We think it
noteworthy that it was reiterated that it was essential for a
trader to add a prefix or suffix, preferably showing origins in
order to get any protection in respect of a word which is
descriptive. Reference was also made to Office Cleaning Service
Ltd. -vs- Westminster Window and General Cleaners Ltd.,
(1946) 63 RPC 39 where the rivals were using "Office Cleaning
Services" and "Office Cleaning Association". The opinion was
that where a fancy word has been chosen as a part of the name
and if another trader adopts that fancy name that may be seen
as inviting confusion. Keeping all these precedents in view, the
Court of Appeal concluded that the use of the word „Oven Chips‟
was descriptive and the prefix of „McCain‟, „Country Fair‟ or
„Birds Eye‟ were sufficient to distinguish the products. We are
not faced with the employment of descriptive words but the
underlying rationale is apposite, namely, that if words of
common parlance are used, exclusivity cannot be claimed and
secondly the use of a prefix would invariably result in
distinguishing the rival products.
14. S.M. Dychem Ltd. -vs- Cadbury (India) Ltd., (2000) 5
SCC 573 is pressed into support by learned counsel for the
Defendants. In that case the Plaintiffs used the word „Piknik‟ for
some time and when it discovered that the Defendants was
_________________________________________________________________________________________________
marketing „Cadbury Picnic‟, an injunction was prayed for and
granted. The Division Bench, however, reversed the Order and
this has received the imprimatur of the Supreme Court by a
detailed judgment. The presence of „Cadbury‟ was, in their
Lordships‟ opinion, sufficient reason to decline injunction. The
learned Single Judge has reproduced 54th paragraph of S.M.
Dychem Ltd., but with due respect, had not applied the
Judgment to the extent that it compelled. The said paragraph
reads as follows and is extracted for obvious reasons:-
54. As to scope of a buyer being deceived, in a passing
off action, the following principles have to be borne in
mind. Lord Romer, LJ has said in Payton & Co. v.
Snelling Lampard & Co. (1900) 17 RPC 48 that it is a
misconception to refer to the confusion that can be
created upon an ignorant customer. The kind of
customer that the Courts ought to think of in these
cases is the customer who knows the distinguishing
characteristics of the plaintiff's goods, those
characteristics which distinguish his goods from other
goods in the market so far as relates to general
characteristics. If he does not know that, he is not a
customer whose views can properly be regarded by the
Court. [See the cases quoted in N.S. Thread & Co. v.
Chadwick & Bros. AIR 1948 Mad. 481, which was a
passing off action]. In Schweppes' case, Lord Halsbury
said, if a person is so careless that he does not look and
does not treat the label fairly but takes the bottle
without sufficient consideration and without reading
_________________________________________________________________________________________________
what is written very plainly indeed up the face of the
label, you cannot say he is deceived.
15. Very recently, the Division Bench of this Court in Cadila
HealthCare Ltd. -vs- Gujarat Co-operative Milk Marketing
Federation Ltd., MANU/DE/2282/2009 upheld the decision of a
Single Judge of this Court refusing an injunction against the use
of the word „Sugar Free‟. The Plaintiff is the manufacturer of the
artificial sweetener sugar free, where as the Defendant had
stated that its ice creams were sugar free or free of sugar. It
was held that exclusivity could not be claimed in respect of
ordinary words (or if we may say descriptive words) which are
publici juris. The Division Bench also quoted with the approval
the decision of the High Court of Bombay in Asian Paints
Limited -vs- Home Solutions Retail (India) Ltd., 2007 (35) PTC
697, wherein the learned Single Judge had declined an
injunction holding that the words „Home Solutions‟ are to be
commonly found. Jural opinion, therefore, is an averse to
granting exclusivity to ordinary words. Our esteemed and
learned Brother, Mukul Mudgal, J., had noted that „Sugar Free‟
is neither a coined word nor an unusual juxtaposition of two
English words especially when such expressions are commonly
used. Although the Bench expressed their reservations for the
decision of the European Court of Justice in Proctor & Gamble -
_________________________________________________________________________________________________
vs- Office of Harmonisation in the International Market (OHIM),
(2002) RPC 17 (famously known as "Baby Dry Case"), it was
noted that the proprietary character could be accorded to
expressions which are syntactically unusual. In other words,
there must be something unique to the choice of the word; it
should neither be descriptive nor laudatory since everyone
would be entitled to use such word(s). It would be wise,
therefore, for any trader or manufacturer to use a coined or
unique word if he expects proprietary right over and a
consequent injunction to issue in respect of the user of such
trademarks by rivals. If a new venture dealing in computers
adopts the name „Apple‟, we would expect Courts not to hesitate
to grant an injunction against its user by third parties since the
choice of the word „Apple‟ has no connection whatsoever with
computers. Obviously, if a party adopts the mark „Imperial
Apples‟ in connection with the apple trade, Courts would be
loathe to grant an injunction for either word.
16. It seems to us that the regime which applies to descriptive
words would apply equally to laudatory words. No one can claim
exclusive or proprietary rights over such words. However, this
would not inexorably lead to the consequence of the relief of
passing off not being available. That relief would invariably
depend and be determined by the manner in which both
_________________________________________________________________________________________________
products are being marketed. Learned counsel for the
Appellants has reason to rely on Hiram Walker Inc. -vs- Penn-
Maryland Corporation. Coincidentally, in that case also the word
„Imperial‟ was being used as a trademark for whisky. It was held
that it would be improvident to grant an injunction because the
trademark IMPERIAL could not be registered and secondly
because a secondary meaning had not been established. Very
recently, in Khoday India Ltd. -vs- Scotch Whisky, AIR 2008 SC
2737 their Lordships took note of the difference in the pricing of
the Indian made foreign liquor PETER SCOT and other Scotch
whiskies introduced in the market by the Defendant. This was
one of the grounds on which grant of an injunction was found to
be inappropriate. So far as the case in hand is concerned, in the
Hyderabad region it is the undisputed case that IMPERIAL
BLUE is much higher priced than Imperial Gold.
17. In Madhuban Holiday Inn -vs- Holiday Inn Inc., 100(2002)
DLT 306 the Division Bench, (of which one of us Sen, J. was a
member), had upheld the Order of the learned Single Judge
interdicting the use of the name Madhuban Holiday Inn. Dalveer
Bhandari, J., as his Lordship then was, had opined that the
adoption of the word HOLIDAY INN was ex facie fraudulent and
mala fide; the intention was to "ride on the reputation of the
respondent and derive pecuniary benefit from it". The Bench
_________________________________________________________________________________________________
had been impressed by the fact that HOLIDAY INN had become
a worldwide leader and a household name in the hotel industry.
Drawing on the reasoning in Baby Dry we would venture to say
that HOLIDAY INN is syntactically unusual since the choice
could have also been HOLIDAY HOME, HOLIDAY HOTEL, etc.
In Rich Products Corporation -vs- Indo Nippon Foods Limited,
2007(35) PTC 15, our learned Brother, Badar Durrez Ahmed, J.
declined an injunction in respect of WHIP TOPPING, holding it
to be generic term. The use of the words RICH‟S and BELLS
preceding Whip Topping in his opinion removed any possibility
of similarity or confusion. In Bharat Hotels -vs- Unison Hotels
Ltd., 2004 (28) PTC 404 a learned Single Judge of this Court had
rightly declined to grant an injunction for the use of the word
GRAND, which had been adopted by both the parties for their
hotel business. In similar manner, the learned Single Judge had
held that the prefix PUNJ brought about sufficient dissimilarity
between the two groups and held that no fraud or prima facie
case had been made out in Lloyd Insulations (India) Ltd. -vs-
Punj Lloyd Insulations Pvt. Ltd., 79(1999) DLT 617. We have
already cited the example of APPLE which has become famous
worldwide for computers and to that we may add CATERPILLAR
as has been found in Caterpillar Inc. -vs- Mehtab Ahmed,
_________________________________________________________________________________________________
99(2002) DLT 678 since the product in question is heavy
machinery.
18. Mr. Sudhir Chandra has relied very heavily on Amritdhara
Pharmacy -vs- Satya Deo Gupta, AIR 1963 SC 449 where the lis
pertained to LAXMANDHARA and AMRITDHARA. Their
Lordships observed that LAXMANDHARA was likely to deceive
and confuse persons of the class who generally purchased such
preparations. We have already noted the significant variance in
the price of the two brands - IMPERIAL BLUE and Imperial
Gold, leading to the inference that there is a difference in the
class of customers. This very Judgment, however, is important
for the observations made by their Lordships with regard to
acquiescence. It was held that the proprietors of AMRITDHARA
had stood by and allowed LAXMANDHARA to grow in business,
thereby attracting "special circumstances" contained in Section
10(2) of the TM Act, 1940 which corresponds to Section 12 of
the TM Act, 1999. In Durga Dutt Sharma -vs- Navaratna
Pharmaceutical Laboratories, AIR 1965 SC 980 the dispute
revolved around the words Navaratna Pharmacy and Navaratna
Pharmaceutical Laboratories and reliance has been placed by
Mr. Sudhir Chandra on the following passage:-
28. .... In an action for infringement, the plaintiff must,
no doubt, make out that the use of the defendant‟s
mark is likely to deceive, but where the similarity
_________________________________________________________________________________________________
between the plaintiff‟s and the defendant‟s mark is so
close either visually, phonetically or otherwise and the
court reaches the conclusion that there is an imitation,
no further evidence is required to establish that the
plaintiff‟s rights are violated. Expressed in another
way, if the essential features of the trade mark of the
plaintiff have been adopted by the defendants, the fact
that the get-up, packing and other writing or marks on
the goods or on the packets in which he offers his
goods for sale show marked differences, or indicate
clearly a trade origin different from that of the
registered proprietor of the mark would be immaterial;
whereas in the case of passing off, the defendant may
escape liability if he can show that the added matter is
sufficient to distinguish his goods from those of the
plaintiff".
We are of the view that this precedent does not advance the
case of the Plaintiffs for the reason that Navaratna is not
inherently and essentially connected with pharmaceutical
preparations and is not a common laudatory word.
19. We are also unable to agree with Mr. Sudhir Chandra that
the Appeal before us must be dismissed on the ratio in Heintz
Italia -vs- Dabur India Ltd., (2007) 6 SCC 1 since that case did
not deal with laudatory words, which we firmly believe ought
not to receive proprietary rights. It is worth highlighting that
their Lordships were at pains to observe that both GLUCON-D
and GLUCOSE-D are items containing glucose and are,
_________________________________________________________________________________________________
therefore, generic. Owing to this factor, the packaging had
assumed importance and since it was found to be confusingly
similar, an injunction was granted. The principal argument
raised in the Supreme Court was that the product GLUCON-D
was in the market since 1940, that is, decades before the
Defendant had commenced marketing a similar product. Their
Lordships had referred to Corn Products Refining Co. -vs-
Shangrila Food Products Ltd., AIR 1960 SC 142 where the rival
trademarks were GLUVITA with reference to biscuits and
GLUCOVITA with reference to glucose and it was held that
there was likelihood to cause deception and confusion. Godfrey
Philips India Ltd. -vs- Girnar Food & Beverages (P) Ltd.,
2005(30) PTC 1 dealt with trademarks SUPER CUP and SUPER
TEA. Our learned Brother, Mukul Mudgal, J., speaking for the
Division Bench, came to the conclusion that „Super‟ referred to
the quality of the goods and was, therefore, merely laudatory;
and „Cup‟ alluded to a cup of tea and was, therefore,
descriptive; and accordingly the decision of the learned Single
Judge declining an injunction was upheld. A perusal of the Order
of the Supreme Court makes it clear that the perspicuous
Judgment was set aside on the concession of learned counsel for
both the parties. The Court observed that a descriptive
trademark may be entitled to protection if it has assumed a
_________________________________________________________________________________________________
secondary meaning which identifies it with the particular
product or as being from a particular source. The Remand was
on this question alone. The decision is of no assistance
whatsoever to the Respondents. As has been held in Municipal
Corp. Of Delhi -vs- Gurnam Kaur, AIR 1989 SC 38: (1991) 1 SCC
19, "It is axiomatic that when a direction or order is made by
consent of the parties, the Court does not adjudicate upon the
rights of the parties nor lay any principle."
20. Mr. Sudhir Chandra next contends that Section 28(3) of
the TM Act does not apply to the present dispute and the Civil
Court is competent to grant an injunction by virtue of Section
124(5) of the TM Act. Where the trademark is defective under
Section 11(1)(a), a Civil Court need not await rectification
proceedings since it retains the power to grant an injunction.
Our attention has also been drawn to the presence of the words
„if valid‟ in Section 28 of the TM Act which, according to learned
Senior Counsel, is indicative of the fact that where a prima face
case has been shown to a Civil Court, an injunction can follow.
As we see it, Section 11(a) adumbrates the grounds for refusal
of registration. The proviso to Section 9(1) of the TM Act carves
out an important exception to the absolute ground for refusal of
registration, viz., that a trademark shall not be refused
registration if before the date of application for registration it
_________________________________________________________________________________________________
has acquired a distinctive character as a result of the use made
of it, or that it is a well-known trademark. Section 28(1)
bestows the exclusive right to the use of a trademark to the
party in whose favour the registration has been allowed and
justifiably waters down finality and absoluteness or
conclusiveness of this exclusivity by stating that the trademark
must be valid. We have already seen that sub-section(3) permits
the use of a registered trademark accorded to two parties with
the caveat that neither of them claims exclusivity against the
other merely on the basis of registration. Chapter-V deals with
the power to cancel or vary the registration or to rectify the
registration, and reposes this power either on the IPAB or on
the Registrar. By virtue of Section 28(3) of the TM Act a
registered trademark is not infringed where there are other
trademarks which are identical or nearly resemble the other but
have received registration. In such an impasse the adversaries
must be directed towards the IPAB for rectification of the
registration; and the suit must be stayed.
21. Section 124(5) preserves the power of the Court to make
any interlocutory order including (a) granting an injunction (b)
directing account to be kept, (c) an order appointing a Receiver
or (d) an order attaching any property. Plainly, the parenthesis
in this sub-section is superfluous. The last nine words dispel any
_________________________________________________________________________________________________
doubt as to the power of the Court staying proceedings before it
as it specifically contemplates that interlocutory orders could be
made „during the period of the stay of the suit‟.
22. The legal nodus which still remains to be unravelled is
whether the interlocutory orders postulated in Section 124(5) of
the TM Act would include those flowing from the concept of
infringement. It is our considered opinion that while staying
proceedings in the suit, a Civil Court can pass such orders for a
multitude of reasons. Firstly, it is trite that registration of a
trademark is always susceptible to challenge on the ground of
prior user as is evident from a reading of Section 11 of the TM
Act and a volume of precedents which exists on this aspect of
the law. In this regard, Section 34 would also be of advantage.
Secondly, all other things being largely equal, the party with
prior registration of a trademark would logically be entitled to
claim exclusive use in the case of any litigation as is obvious
from a perusal of Section 11(2)(a) of the TM Act. In saying so,
we are not unmindful of Section 28(3) of the TM Act, which the
Courts seized with the dispute would keep in mind in arriving at
any decision. In other words, unless there are strong reasons in
favour of the Plaintiff, the Court would decline injunctions
predicated on the prayer of infringement. Section 91 of the TM
Act provides for an Appeal to the IPAB to any person aggrieved
_________________________________________________________________________________________________
by an order or decision of the Registrar, which in the context of
the present conflict, is the grant of registration of a trademark
to more than one person. Section 93 of the TM Act contains a
bar on jurisdiction of Courts on matters falling within the
province of IPAB. The intervening Section 92(2) of the TM Act
states that the IPAB shall have, for the purposes of discharging
its functions under the Act, the same powers as are vested in a
Civil Court under the Code of Civil Procedure, 1908 while trying
a suit in respect of the following matters, namely, (a) receiving
evidence, (b) issuing commissions for examination of witnesses,
(c) requisitioning any public record and (d) any other matter
which may be prescribed. The power to grant an injunction is
conspicuous by its absence.
23. The similarities between the case before us and Allied
Blenders and Distillers P. Ltd. -vs- Paul P. John, 2008(38) PTC
568(Del) are indeed remarkable. The dispute related to whisky
marketed under the trademarks OFFICERS CHOICE and
OFFICIAL CHOICE. The former was granted registration on
19.4.2007 under Class-33 albeit with a disclaimer for the word
„Choice‟. We are not a little surprised that no disclaimer was
recorded by the Registrar for IMPERIAL, which would have
resulted in both parties adding something more to this word so
as to create distinction. The Division Bench found delay and
_________________________________________________________________________________________________
acquiescence present since the Defendant therein had built up
significant sales in six years previous to the filing of the suit. On
the second ground of passing off, the Division Bench abjured
delving deep since the IPAB was seized with rectification
proceedings, but on a comparison of the labels found prima
facie sufficient scope for confusion. In Astrazeneca UK Limited
-vs- Orchid Chemicals and Pharmaceuticals Ltd., 2007(34) PTC
469 another Division Bench was called upon to decide the
dispute in the use of the trademarks MEROMER and
MERONEM, in respect of which the learned Single Judge had
vacated the ad interim injunction granted earlier. The Division
Bench observed that MERO was generic in character and
concluded that the suffix in both the rival trademarks were
sufficient to draw a distinction between the two. The Bench
drew support from the LIV-52 and LIV-T litigation to uphold the
refusal of an interim injunction. We can do no better than
reproduce a passage from SBL Limited -vs- Himalaya Drug
Company, 1997 PTC(17) 540 in which Justice R.C. Lahoti, as his
Lordship Chief Justice of India then was, spoke for the Bench in
these words - "Nobody can claim exclusive right to use any
generic word, abbreviation, or acronym which has become
publici jurisdiction. In the trade of drugs it is common practice
to name a drug by the name of the organ or ailment which it
_________________________________________________________________________________________________
treats or the main ingredient of the drug. Such an organ ailment
or ingredient being public jurisdiction or generic cannot be
owned by anyone for use as a trademark". The jural message,
therefore, is clear and unequivocal. If a party chooses to use a
generic, descriptive, laudatory or common word, it must realize
that it will not be accorded exclusivity in the use of such words.
At the most, it may bring a challenge in the nature of passing off
and in such an event the Court would look at the rival
labels/packagings/trade dresses in order to determine whether a
customer possessing a modicum memory and ordinary
intelligence may be so confused as to purchase one product
believing it to be the other.
24. It is our analysis that no exclusive or proprietary rights
can be claimed by either of the parties before us in respect of
the word IMPERIAL which is not only in common parlance to be
found in every dictionary, but also is laudatory in nature as it
alludes to royalty or grandeur. With respect, we are not
convinced that IMPERIAL refers only to royalty, empowering
only such persons to take litigative umbrage. Illusions of royalty
and grandeur are one of the sentiments resulting from imbibing
spirits, and, therefore, IMPERIAL may justifiably be seen as
descriptive.
_________________________________________________________________________________________________
25. We must also reflect on an extremely important facet of
the present case which is that the Appellants were undisputedly
using bottles on the bottom of which SEAGRAM was embossed.
An attempt has been made to explain that bottles manufactured
by the Plaintiffs had been reused by the Appellants. This clearly
is moonshine, which is apposite to the alcohol trade. In the
course of arguments the Appellants had made a firm
commitment that no bottles containing the name SEAGRAM
would be used; and the Plaintiffs have not complained of any
further misuse. Normally, a dishonest or mala fide use of a
trademark is sufficient reason to allow or decline an injunction.
However, no useful purpose would be served in adopting this
approach, as in the present case a fresh action or motion could
be brought by the Defendants, stating that it has discontinued
its dishonest use. Failure to respond to this change would lead
to multiplicity of litigation which should be strenuously stopped.
We think it is unnecessary to say anything more in this regard.
26. We are of the prima facie opinion that the
Plaintiffs/Respondents had adequate knowledge much prior to
the filing of the suit of the resolve of the Defendants to use the
trademark RHIZOME Imperial Gold firstly because the
Defendants had made its intent clear before the Excise
Department, Hyderabad and the Defendants had applied for
_________________________________________________________________________________________________
registration of the trademark in 2002 and secondly because
Plaintiffs‟ bottler had withdrawn its objection before the Excise
Department, Hyderabad. The Plaintiffs idly stood by and
watched the Defendants sales increase manifold. In this period
the Appellants/Defendants had cornered a substantial part of
the market. Delay and acquiescence has thus stepped in to
defeat the Plaintiffs claim for an ad interim injunction.
27. Finally, so far as prayer of passing off is concerned, we
reiterate that the similarity of label/trade dress was with respect
to the Plaintiffs‟ ROYAL STAG and the Defendants‟ Imperial
Gold. Substantial changes have been agreed upon by the
Appellants which upon implementation removes any likelihood
of deception even concerning the cognitive faculties of an
average customer, if not in an inebriated stupor. It may still be
pleaded by the Plaintiffs that the Defendants are guilty of
passing off because of the adoption of the word IMPERIAL. To
this we may clarify that neither party has any exclusive right for
the use of the word IMPERIAL. The two labels, that is
IMPERIAL BLUE and RHIZOME Imperial Gold are totally
dissimilar and if a flat amber bottle is used by the
Defendants/Appellants, no deception is likely to arise. It is also
relevant to mention that the word IMPERIAL is used by several
other manufacturers of alcohol such as IMPERIAL TRIBUTE,
_________________________________________________________________________________________________
IMPERIAL FAMOUS, TETLEY‟S IMPERIAL, IMPERIAL‟S HERO
FIVE WHSKY, CAREW‟S IMPERIAL WHINE WHISKY, OLD
IMPERIAL, SUMMERHILL IMPERIAL, XO IMPERIAL, DON
FULANO IMPERIAL, RON BARCELO IMPERIAL ETC. All these
parties will have to co-exist. In view of the widespread use of the
word IMPERIAL, especially in the alcohol business, it is not
possible to accept the contention of Mr. Chandra that the word
IMPERIAL has attained a secondary meaning which would
justify exclusivity. Moreover, secondary meaning would evolve
over a number of years; in the present case, the Plaintiffs
started marketing its product in 1997 and that is too short a
period to make such an extreme claim. In this regard, it is also
relevant that both the parties have received registration under
the TM Act for their competing brands
28. A number of labels had been presented to us by the
Appellants with the intention of putting to rest the possibility of
a complaint of passing off. The same are shown below:-
_________________________________________________________________________________________________
By way of an interim arrangement we permit the Appellants to
market its product by using Label „A‟. It has Rhizome‟s written
in largest font size; and uses a shield instead of a swirling
_________________________________________________________________________________________________
banner as in Royal Stag; the colour combination is also different
to Royal Stag; the names are in start case. In addition, the
Appellant shall use a round or curved bottle so as to easily
distinguish it from the shape of the Royal Stag Bottle.
29. Our views are prima facie in nature and ought not to
conclusively influence the final decision of any Court, or the
IPAB or Registrar.
30. On the basis of this discussion, we accept the Appeal and
set aside the impugned Order, subject, however, to the
Appellant adopting the trademark RHIZOME Imperial Gold in
the trade dress and corresponding packaging and bottling as
depicted at the beginning.
FAO(OS) 497/2008
31. In view of our decision in FAO (OS).484/2008, this
appeal is also allowed accordingly.
( VIKRAMAJIT SEN )
JUDGE
October 23, 2009 ( V.K. JAIN )
tp JUDGE
_________________________________________________________________________________________________
