Kabushiki Kaisha Toshiba Trading ... vs Mr. S.K.Sil & Anr.
2011 Latest Caselaw 3618 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                    Judgment Pronounced on: 29.07.2011

+           CS(OS) No.1298/2010

KABUSHIKI KAISHA
TOSHIBA TRADING AS TOSHIBA CORP.                .....Plaintiff

                           - versus -

MR. S.K.SIL & ANR.                          .....Defendants

Advocates who appeared in this case:
For the Plaintiff:      Mr. Pravin Anand, Advocate.

For the Defendant:           None.

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

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                 Yes
   in Digest?

V.K. JAIN, J. (ORAL)

1. This is a suit for permanent injunction, damages,

rendition of accounts and delivery up of the infringing

material etc.

2. The plaintiff is a company incorporated in Japan

which was founded in the year 1875. Initially, the plaintiff

company was set up under the name Tanaka Seizo-sho and

the name was changed to Kabushiki Kaisha Toshiba in the

year 1984 trading as Toshiba Corporation. The plaintiff

company is a diversified manufacturer and marketer of

advanced electronic and electrical products, spanning

information and communications equipments and systems,

internet-based solutions and services, electronic

components and materials, power systems, industrial and

social infrastructure systems and household appliances.

The Toshiba Corporation operates globally in a number of

countries including India and it had net sales of Rs.3834.05

billion in the year 2008 with sales of Rs.664 billion in the

Asian region outside Japan alone.

3. The plaintiff company has been selling its

products throughout the world under the trademark

TOSHIBA which it claims to have adopted in the year 1939.

TOSHIBA is stated to be a coined word, by taking the letters

„TO‟ from the word „Tokyo‟ appearing to the name of „Tokyo

Electric Company‟ and the letters „SHIBA‟ having been taken

from Shibaura appearing in the name „Shibaura

Engineering Works‟. It would be pertinent to note here that

Shibaura Seisaku-sho and Tokyo Denki were merged to

form Tokyo Shibaura Electric Company Limited, which

name was later changed first to Tokyo Shibaura Denki

Kabushiki Kaisha and then to Kabushiki Kaisha Toshiba.

4. The case of the plaintiff is that the trademark

TOSHIBA is a well-known trademark recognized all over the

world as a reliable brand of consumer durables. The word

TOSHIBA also forms a key and essential part of the

corporate name and trading style of the majority of

companies in Toshiba Group of Companies. Toshiba

Corporation has been present in India since 1963 and is

involved in manufacturing and selling a large number of

goods, ranging from electric communication system, heavy

electrical apparatus to consumer products. The plaintiff set

up a wholly owned subsidiary named TOSHIBA Private

Limited in India in September, 2001, to provide marketing

and sale support to all TOSHIBA companies as also to

enhance the numbers of Toshiba Corporations in India, Sri

Lanka, Nepal and Bhutan. Toshiba Corporation had sale of

Yen 19,332 million, 18,575 million and 14,246 million in

the year 2006, 2007 and 2008 respectively and it is claimed

that TOSHIBA has now become a household name in India

as well. The plaintiff company holds a number of trademark

registration in India including trademark registration

No.404340 in class 7 in respect of Elevators and Escalators.

The plaintiff company claims to have spent enormous

expenditure on advertising and promoting its trademark

TOSHIBA across the globe, including India and is also

stated to be amongst Fortune 500 companies. It is also

alleged that the plaintiff company was ranked 97 th in the

year 2009 and 91st in the year 2008 and 2007 and was also

ranked as seventh largest company in the world in

electronics and electrical equipment industry, for the years

2009, 2008 and 2007. The brand TOSHIBA is stated to

have been recognized amongst well-known brands, in

several publications. It is also claimed that the mark

TOSHIBA has been held to be a well-known mark by

Supreme Court of India.

5. It is alleged in April, 2010, the plaintiff company

received information that defendant No. 2 Toshiba India

Elevator & Escalator Industries was offering lifts and

escalators under the trademark TOSHIBA, all over India and

the defendants were carrying on business under the trade

name/style of which the word TOSHIBA forms a part. On

investigation, the plaintiff company came to know that

defendant No.2 which was engaged in the business of

providing lifts and escalators was also operating a website

www.toshibaelevator.com

6. It is claimed that the mark TOSHIBA has been

adopted by the defendant with a view to enjoy the benefits

attached to the reputation and goodwill which the mark

TOSHIBA enjoys throughout the world including India and

which is otherwise an invented and highly distinctive mark.

7. The plaintiff has sought an injunction restraining

the defendants from manufacturing, importing, selling,

offering for sale or advertising under the mark TOSHIBA

and/or any other mark which is deceptively similar to the

aforesaid mark. It has also sought injunction restraining

defendant from doing business using the mark TOSHIBA

and passing off their goods as those of the plaintiff. It has

further sought transfer of the domain name

www.toshibaelevator.com to it, besides seeking damages

amounting to Rs.21 lakhs and delivery up of the infringing

stationery material etc.

8. The defendants were served on 25.08.2010 and

vakalatnama on their behalf was filed on 22.09.2010. They,

however, did not file written statement and did not appear.

The defendants were proceeded ex-parte vide order dated

23.02.2011.

9. The plaintiff has filed the affidavit of Mr. Haruhiko

Takigawa, Chief Specialist - Intellectual Property, Legal

Affairs, Intellectual Property Division, by way of ex-parte

evidence. In his affidavit by way of evidence, Mr. Haruhiko

Takigawa has supported on oath the case set out in the

plaint and stated that the plaintiff company which is also

known as TOSHIBA Corporation is engaged in

manufacturing and sale of electronic and electrical goods

bearing the mark TOSHIBA and this company came into

existence in the year 1875. He has further stated that the

plaintiff company operates from a number of company

employing work force of 204000 employees as on

31.03.2010. He has stated that the word TOSHIBA was

adopted in the year 1939 on merger of two predecessors of

the plaintiff company, namely, Shibaura Seisaku-sho and

Tokyo Denki to form Tokyo Electric Company, the letters

„TO‟ having been taken from the word „Tokyo‟ appearing to

the name of „Tokyo Electric Company‟ and the letters

„SHIBA‟ having been taken from Shibaura. He has further

stated that the plaintiff company had sale of Yen 19,332

million, 18,575 million and 14,246 million in the year 2006,

2007 and 2008 respectively. According to him, the

investigation conducted by the plaintiff company revealed

that defendant No.2 was engaged in the business of

providing lifts and escalators throughout the country under

the mark TOSHIBA and the defendants are also having a

website of www.toshibaelevator.com. According to him,

defendant No.1 is the Customer Relationship Officer

working with defendant No.2. He has also stated that

defendant No.3 - Firojuddin Mondal is the proprietor of

defendant No.2.

10. A perusal of the trade mark registration

No.404334 (Ex.PW-1/17) would show that the plaintiff

company is the registered proprietor of the word mark

TOSHIBA in respect of a large number of goods including

elevators and escalators since 16.04.1983 and the

registration is valid till 16.04.2040. Ex.PW-1/28, which is

the brochure of Toshiba India Lifts and Escalators Industry

in respect of lifts and elevators shows that defendant No.2

has been using the word TOSHIBA not only as a part of its

business but also for selling and advertising its products

such as lifts of various nature. The brochure shows that

the elevators are being sold as TOSHIBA elevators. The

word TOSHIBA has also been used on Ex.PW-1/31 which is

the business letter of defendant No.2, whereby quotation

was given by defendant No.1- Mr. S.K.Sil for along with the

trade name of defendant No.2 - Ex.PW-1/29 is a print out

from the website www.toshibaelevator.com which shows

that this website has been got registered by defendant No.2

- Toshiba India Elevator & Escalator Industries which

claims to be providing elevators and escalators for last ten

years. The domain name www.toshibaelevator.com is

registered with Global IP Space as is evident from the print-

out Ex.PW-1/34. The plaintiff thus has been able to prove

that defendant No.2 has been using the word TOSHIBA not

only as a part of its business name and domain name but

also for selling, advertising and promoting lifts of various

kind. Since the plaintiff company is a registered proprietor

of the trademark TOSHIBA in India even in respect of

elevators and escalators, defendant No.3 who is the

proprietor of defendant No.2 has infringed the registered

trademark of the plaintiff company.

11. On account of use of the name TOSHIBA on the

business documents, such as letter heads and business

cards as well as the brochure whereby the products are

advertised by the defendants, coupled with the use of the

domain name www.toshibaelevator.com, a person coming

across the products of the defendants is likely to get

confused and may believe that the products being offered by

them are genuine products of the plaintiff company. The

customer on account of extensive use of the word TOSHIBA

by the defendants may presume that either the products

which the defendants are offering to them have been

manufactured/imported by the plaintiff company or have

been manufactured under licence from it or the defendants

are otherwise associated with Toshiba Corporation of Japan.

It is, therefore, possible for the defendants to pass off their

products to the customer as genuine TOSHIBA product,

thereby taking undue advantage of the reputation and

goodwill which the trademark TOSHIBA enjoys in the

market. The customer, to whom elevators and escalators

which offered by the defendants may also pay the price

which genuine TOSHIBA products command for these

products in the market, in the mistaken belief that these

products come from the stable of TOSHIBA Corporation of

Japan and therefore deserve a premium price. If the quality

of the elevators and escalators sold by the defendants is not

found to be as good as that of the products of the plaintiff

company and/or the maintenance and after sale service

provided by the defendant is not as good as that being

provided by the plaintiff company, that may adversely affect

the reputation and brand equity which the product

TOSHIBA enjoys in the market since the customer on

account of inferior quality of the product or inadequate after

sale service, may presume that the quality of the products

being manufactured and sold by the plaintiff company or

the quality of the after sale service which it was providing to

the predecessors of its products has gone down and is no

more as superior and reliable as it used to be earlier. This

may adversely affect the business of the plaintiff company,

besides eroding the credibility, reputation and

distinctiveness which the trademark TOSHIBA enjoys

throughout the world including India.

12. This is also the case of the plaintiff that on account

of continuous and extensive use of the trademark TOSHIBA

by it for last many years, in a large number of countries

coupled with the extensive promotion and publicity given to

the products bearing the aforesaid mark, it now enjoys an

unparalleled reputation and goodwill and has acquired the

status of a well-known mark.

13. In Tata Sons Ltd. vs. Manoj Dodia & Ors. ,

2011(46) PTC 244 DEL, I had occasion to deal with the

mark TATA, which Tata Sons Limited claimed to be a well-

known mark. During the course of the judgment, this

Court, inter alia, observed as under:-

"5. A well known trademark is a mark which is widely known to the relevant general public and enjoys a comparatively high reputation amongst them. On account of advancement of technology, fast access to information, manifold increase in international business, international travel and advertising/publicity on internet, television, magazines and periodicals, which now are widely available throughout the world, of goods and services during fairs/exhibitions, , more and more persons are coming to know of the trademarks, which are well known in other countries and which on account of the quality of the products being sold under those names and extensive promotional and marketing efforts have come to enjoy trans-border reputation. It is, therefore, being increasingly felt that such trademark needs to be protected not only in the countries in which they are registered but also in the countries where they are otherwise widely known in the relevant circles so that the owners of well known trademarks are encouraged to expand their business activities under those marks to other jurisdictions as well.

The relevant general public in

the case of a well known trademark would mean consumers, manufacturing and business circles and persons involved in the sale of the goods or service carrying such a trademark.

6. The doctrine of dilution, which has recently gained momentus, particularly in respect of well known trademarks emphasizes that use of a well known mark even in respect of goods or services, which are not similar to those provided by the trademark owner, though it may not cause confusion amongst the consumer as to the source of goods or services, may cause damage to the reputation which the well known trademark enjoys by reducing or diluting the trademark‟s power to indicate the source of goods or services.

7. Another reason for growing acceptance of trans-border reputation is that a person using a well known trademark even in respect of goods or services which are not similar tries to take unfair advantage of the trans-border reputation which that brand enjoys in the market and thereby tries to exploit and capitalize on the attraction and reputation which it enjoys amongst the consumers. When a person uses another person‟s well known trademark, he tries to take advantage of the goodwill that well known trademark enjoys and such an act constitutes an unfair competition.

8. The concept of confusion in the mind of consumer is critical in actions for trademark infringement and passing off, as well as in determining the registrability of the trademark but, not all use of identical/similar mark result in

consumer confusion and, therefore, the traditionally principles of likelihood of confusion has been found to be inadequate to protect famous and well known marks. The world is steadily moving towards stronger recognition and protection of well known marks. By doing away with the requirement of showing likelihood of confusion to the consumer, by implementing anti-dilution laws and recognizing trans-border or spill over reputation wherever the use of a mark likely to be detrimental to the distinctive character or reputation of an earlier well known mark. Dilution of a well known trademark occurs when a well known trademark loses its ability to be uniquely and distinctively identify and distinguish as one source and consequent change in perception which reduces the market value or selling power of the product bearing the well known mark. Dilution may also occur when the well known trademark is used in respect of goods or services of inferior quality. If a brand which is well known for the quality of the products sold or services rendered under that name or a mark similar to that mark is used in respect of the products which are not of the quality which the consumer expects in respect of the products sold and/or services provided using that mark, that may evoke uncharitable thoughts in the mind of the consumer about the trademark owner‟s product and he can no more be confident that the product being sold or the service being rendered under that well known brand will prove to be of expected standard or quality.

10. Well known marks and trans-border reputation of brands was recognized by

Courts in India, even before Trade Marks Act, 1999 came into force. In Daimler Benz. Akietgesellschaft v. Hybo Hindustan, AIR 1994 Del 239, the manufacturers of Mercedes Benz sought an injunction against the defendants who were using the famous „three pointed star in the circle‟ and the word „Benz‟. The Court granted injunction against the defendants who were using these marks for selling apparel. Similarly, in Whirlpool Co. & Another v. N.R. Dongre, (1996) PTC 415 (Del.), the plaintiff Whirlpool had not subsequently registered their trademark after the registration of the same in 1977. At the relevant time, the plaintiff had a worldwide reputation and used to sell their machines in the US embassy in India and also advertised in a number of international magazines having circulation in India. However, the defendant started using the mark on its washing machines. After an action was brought against them, the Court held that the plaintiff had an established „transborder reputation‟ in India and hence the defendants were injuncted from using the same for their products. In the Kamal trading Co. vs. Gillette UK Limited,(1998 IPLR 135), injunction was sought against the defendants who were using the mark 7'O Clock on their toothbrushes. This was further reaffirmed by the Bombay High Court, which held that the plaintiff had acquired an extensive reputation in all over the world including India by using the mark 7'O Clock on razors, shaving creams. The use of an identical mark by the defendant would lead to the customer being deceived.

13. Trademarks Act, 1999 does not specify the factors which the Court needs to consider while determining whether a mark is a well known mark or not, though it does contain factors which the Registrar has to consider whether a trademark is a well known mark or not. In determining whether a trademark is a well known mark or not, the Court needs to consider a number of factors including

(i) the extent of knowledge of the mark to, and its recognition by the relevant public;

(ii) the duration of the use of the mark;

(iii) the extent of the products and services in relation to which the mark is being used; (iv) the method, frequency, extent and duration of advertising and promotion of the mark; (v) the geographical extent of the trading area in which the mark is used; (vi) the state of registration of the mark; (vii) the volume of business of the goods or services sold under that mark; (viii) the nature and extent of the use of same or similar mark by other parties; (ix) the extent to which the rights claimed in the mark have been successfully enforced, particularly before the Courts of law and trademark registry and (x) actual or potential number of persons consuming goods or availing services being sold under that brand. A trademark being well known in one country is not necessarily determinative of its being well known and famous in other countries, the controlling requirement being the reputation in the local jurisdiction."

14. The trademark TOSHIBA which was adopted by

the plaintiff in the year 1939 is being used across the globe

and the plaintiff company employed more than two lakhs

persons as on 31.03.2010. The plaintiff company had

worldwide sale of Yen 19,332 million, 18,575 million and

14,246 million in the year 2006, 2007 and 2008

respectively. It is registered proprietor of the trademark

TOSHIBA in many countries including Singapore, USA,

Canada, New Zealand, UK, South Africa, Australia and

India. The plaintiff company holds as many as thirty

registration of the word mark and device TOSHIBA in India

in various classes. The trademark TOSHIBA is also

included in an informal list of well-known marks available

on www.ipindiaonline.gov.in.

15. The plaintiff company had export of Japanese yen

51596000000, 15834000000 and 6136000000 to India in

the year 1993, 1994 and 1995 respectively, as is shown in

Ex.PW-1/11. The right of the plaintiff in the trademark

TOSHIBA was also upheld by Supreme Court in Kabushiki

Kaisha Toshiba vs. Tosiba Appliances Company And

Others, (2008) 10 SCC 766. The plaintiff company is

manufacturing and marketing products of various

categories including home, office, business, education and

entertainment. The plaintiff company claims to have

produced, first waterwheel power generators, first X-Ray

tubes, first radio transmission tubes, first electric washing

machines, first vacuum cleaners, first T.V.Broadcasting

Transmitters, TV Microwave Relay System, first electric rice

cookers, first microwave ovens, first transistorized

televisions. It also claims to have developed world‟s first

colour video phone, first expanded IC color TV, first optical

disc based data filing system and first laptop personal

computer. The plaintiff also claims to have commercialized

the world‟s first HDD and DVD video recorder, world‟s first

networked home appliances and developed 320 slice

Dynamic Volume CT system that can complete images of the

heart or brain in only one rotation. The Indian operations of

the subsidiary of the plaintiff-company comprise PC

business, LCD TVs business, home appliances business,

thermal & hydro power plant system, engineering business,

semi conductor business, multifunctional peripherals and

transmission distribution and industrial systems business.

The plaintiff-company is also included amongst global 500

companies identified by Fortune Magazine and its name

appears at serial No. 89 in the list for the year 2010. The

plaintiff-company had revenues of US$ 68731.2 million in

the year 2010.

16. A well-known mark is accorded a statutory

protection in the Trademarks Act, 1999, irrespective of

whether it is an Indian mark or foreign mark. Section 29(4)

of Trade Marks Act, 1999, which is relevant in this regard,

reads as under:-

29(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person, using by way of permitted use, uses in the course of trade, a mark which-

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

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

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

17. The owner of a well-known mark is entitled in law

to seek injunction against use of that mark irrespective of

whether the use is in relation to identical or similar goods

or services or is in relation to other categories of goods or

services. He may also prevent others from using the well-

known trademark as a part of their corporate

name/business name.

18. For the reason given in the preceding paragraphs,

I hold that the defendants No. 2 and 3 have infringed the

registered and well-known trademark „TOSHIBA‟ of the

plaintiff-company by using it for selling and promoting

elevators and escalators, using it on their

letterheads/business cards, as part of their corporate name

and by using the domain name www.toshibaelevators.com

The plaintiff, therefore, has made out a case for grant of

injunction against defendants No. 2 and 3. As far as

defendant No. 1 is concerned, he being only an employee of

defendant No. 2, who otherwise claims to have

disassociated himself from defendant No. 2, the plaintiff is

not entitled to any injunction against him.

19. Coming to damages, this Court, while dealing with

damages for infringement of well-known mark in the case of

Tata Sons Ltd. (supra), inter alia, observed as under:

"The promotion and building of a Trade Mark, particularly a mark which is used in relation to a variety of good and/or services, requires considerable efforts, skill and expenses. The brands are not built in a day, it takes years to establish a brand in the market. Moreover, brand equity can be earned only if the quality of the product sold and/or services provided

under that name are consistently found to be of superior quality. No amount of marketing efforts and promotional expenditure can build a brand, particularly in the long run, if the quality of the product/service does not commensurate with the marketing efforts. The brands, particularly well known brands, themselves are now becoming highly valuable and in fact are being sold as standalone products. The companies which invest heavily in brand building and back them up by quality products are bound to suffer not only in reputation but also in financial terms, on account of diminution in the value of the brand as well as sale of their products/services, if the brands are not given adequate protection by the Courts, by awarding punitive damages against the infringers. Also, a soft or benevolent approach while dealing with such persons, is also likely to prejudicially affect the interests of the consumer, who may pay the price which a premium product commands in the market, but may get an inferior product on account of such unscrupulous persons using trademarks of others for their own commercial benefit, at the cost not only of the trade mark owner, but also the consumer who purchases their product.

Another purpose behind awarding punitive damages is to deter those who may be waiting in the wings and may be tempted to imitate the trade mark of others, in case those who are sued before the Courts are not made to pay such damages as would really pinch them. Awarding token damages may, therefore, not serve the desired purpose.

Our country is now almost in the league of advanced countries. More and more foreign companies are entering our markets, with latest products. They would be discouraged to enter our country to introduce newer products and make substantial investments here, if the Courts do not grant adequate protection to their intellectual property rights such as patents, trademarks and copyright. Most of the products sold by these companies are branded products, the marks on them having trans-border reputation and enjoying tremendous brand equity. It is, therefore, becoming increasingly necessary to curb such trade mark piracies lest they drive away the huge foreign investment our country is attracting. The Court should not give premium to dishonesty and unfair practices by those who have no compunctions in blatantly using the trademark of others for making unearned profits."

20. The defendants are engaged in a widespread

business of selling, installing and maintaining elevators and

escalators of various sizes and designs. In their brochure,

they claimed to have installed 6754 lifts of various types.

They claim PAN India and international branches with

customer care in Japan, Dubai and India. They claim to be

in this business for 10 years. Considering the nature and

volume of their business defendants No. 2 & 3 must have

earned huge profits using the name „TOSHIBA‟. They do not

claim to be small time traders or small scale manufacturers.

They have not come forward to contest the suit. Hence,

they have chosen to withhold the account books, which

could have revealed their profits. Hence, substantial

punitive damages need to be awarded against them.

21. Considering, (i) the duration for which the

trademark TOSHIBA has been used by the plaintiff, (ii) the

geographical extent of trading area in which this mark is

being used, (iii) the volume of business being carried by the

plaintiff using the mark TOSHIBA on its goods, (iv) the

extent of knowledge of the mark TOSHIBA in India, which

is evident from the business activities of the company in

India and the wide range of the products being sold by it in

India under the brand name TOSHIBA, (v) the extensive

advertisement and promotion of the brand TOSHIBA

throughout the world, including in India the number of

registration which the plaintiff company holds in a large

number of countries, including India in respect of the

trademark TOSHIBA and (vi) the number of consumers

buying goods being sold under this brand name, I have no

hesitation in holding that the TOSHIBA is a well-known

brand in India, brand TOSHIBA enjoys a trans border

reputation and has acquired the status of a well-known

brand in India.

22. For the reason given in the preceding paragraphs,

a decree for injunction with costs is passed in favour of the

plaintiff restraining defendants No. 2 and 3 from

manufacturing, selling, promoting, advertising or offering for

sale any product using the word „TOSHIBA‟ or a deceptively

similar word for the purpose. They are also restrained from

using the word „TOSHIBA‟ as a part of their business name

or on their business documents, such as letterheads and

business cards, etc. Defendants 2 and 3 are also directed to

get the domain name www.toshibaelevators.com de-

registered within four weeks. They are further directed to

pay Rs 5 lac as punitive damages to the plaintiff. The suit

against defendant No.1 is dismissed without orders as to

costs.

Decree sheet be drawn accordingly.

(V.K. JAIN) JUDGE

JULY 29, 2011 'sn'/'bg'