Delhi High Court

Disney Enterprises Inc & Anr vs Gurcharan Batra& Ors on 24 October, 2011

Author: Manmohan Singh

*          HIGH COURT OF DELHI: NEW DELHI

+                       C.S.(OS) No.607/2006

                                 Judgment Reserved on: 20.10.2011
%                                 Judgment Pronounced on: 24.10.2011


DISNEY ENTERPRISES INC & ANR                 ....... Plaintiffs
               Through Mr. Pravin Anand , Adv. with
                        Mr. Bhagwati Prasad, Adv.

                        Versus

GURCHARAN BATRA& ORS                                   ....... Defendants
              Through None

CORAM:
HON'BLE MR. JUSTICE MANMOHAN SINGH

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                                 Yes

2. To be referred to Reporter or not?                              Yes

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

MANMOHAN SINGH, J.

1. The plaintiffs have filed the above-mentioned suit on

04.04.2006 for permanent injunction restraining infringement of

trademark, passing off and trade mark dilution, rendition of account of

profits and delivery up the infringing material etc.

2. The plaintiff No.1, namely Disney Enterprises, Inc. is a

Corporation organized and existing under the laws of the State of

Delaware in the United States of America with its principal place of

business at 500 South Buena Vista Street, Burbank, California

91521-6840, USA.

3. The plaintiff No.2, a subsidiary of plaintiff No.1, is a

company incorporated under the Indian Companies Act. The

registered office of plaintiff No.2 is at 4/F, Peninsula Tower-1,

Ganapatrao Kadam Marg, Lower Parel, Mumbai 400013.

4. The plaintiffs‟ business is the merchandising and licensing

of distinctive elements associated with its motion pictures and

television programs, including but not limited to, the world -famous

characters Mickey Mouse, Minnie Mouse, Donald Duck, Daisy

Duck, Goofy, Pluto and Winnie the Pooh, as well as characters from

"DISNEY trademark" animated motion pictures, including "Snow

White and the Seven Dwarfs," "Pinocchio," "The Lion King,"

"Aladdin," "Beauty and the Beast," "The Little Mermaid,"

"Pocahontas," "Hunchback of Notre Dame," "Hercules," "Mulan,"

and "Toy Story", the images of which serve as trademarks and also

constitute copyrighted artwork.

5. The case of the plaintiffs is that plaintiff No.1 through its

subsidiaries and affiliated companies have acquired global reputation

as a leader in the production and marketing of, inter alia, animated

and live action motion pictures, theme parks, publications,

merchandise, artwork and other goods and services featuring the

plaintiffs name and Disney Characters. The plaintiff No.1 has today

established a formidable presence not only in the studio

entertainment sector, but also in the theme parks and resorts, media

networks and consumer products arenas as well. Various cartoon

films originating from the plaintiffs featuring various Disney

characters have been regularly shown on television channels

worldwide, including in India, for decades. These cartoons have

been watched by millions of viewers in their homes.

6. It is alleged that the plaintiffs‟ characters although

generally appearing in movies and cartoons, have found a place in a

variety of goods, including, but not limited to, stationery products,

apparel, toys, books and video games, to name a few.

7. The plaintiffs‟ characters Mickey Mouse, Minnie Mouse,

Donald Duck, Daisy Duck, Goofy and Winnie the Pooh are perhaps

some of the most universally known and loved cartoon characters in

the world. For generations, children and adults alike have been

entertained by Mickey Mouse, Minnie Mouse, Donald Duck, Daisy

Duck, Goofy and Winnie the Pooh, who have appeared in many

animated motion pictures and cartoons, as well as in Disney's theme

parks, television shows, video cassettes, compact disks, toys, comics,

books, art work, and in various other media. The plaintiffs own all

rights, title and interest in and to Disney Enterprises, Inc, and

holds the exclusive rights to market and sell Disney

Enterprises, lnc merchandise. The range of merchandise

includes, but is not limited to, stationery, party hats, decoration

material, clothing, toys displaying the images of the Disney

Characters.

8. The plaintiffs possess both common law trademark

rights to the Disney Devise Marks, as well as trademark registrations

for a number of Disney Device Marks in more than 58 countries the

world over. The list of countries in which the plaintiffs‟ trademarks

are registered has been filed in the present proceedings.

9. The plaintiff No.1 also owns all rights, title and interest in

and to, and holds the exclusive rights to market and sell services and

merchandise in conjunction with the Plaintiffs famous Disney

trademark and family of Disney trademarks and service marks,

including but not limited to "Mickey Mouse," "Winnie the Pooh,"

"Disney", Disney.com, Walt Disney World, and Disneyland. The

plaintiffs have utilized many of the Disney Word Marks in

conjunction with the sale of a wide variety of products and services,

for well over fifty years. Additionally, the plaintiffs possess

numerous registrations with the United States Patent and Trademark

Office for marks, which consist of or include the word mark Dis ney.

10. The plaintiffs are also the registered proprietors of both, a

variety of word marks and device marks in India. The photocopies of

Certificates for use in Legal Proceedings of the Disney Characters

have been filed in the present proceedings. As per plaintiffs, the

aforesaid trademarks are valid and subsisting and are, therefore, in

full legal force conferring on the plaintiffs the full right to their

exclusive use and to restrain use of any identical or deceptively

similar marks by unauthorized persons.

11. It is averred in the plaint that the plaintiffs‟ Trademarks

when used in respect of such things as clothing, stationary, party

decoration material, retail and hotel services, books, records and

tapes, entertainment services, resort services, toys and travel

services, signify to the purchaser that the product or service comes

from the plaintiffs and is of the highest quality. The plaintiffs, either

themselves manufacture or provides a product or service or licence

others to do so, ensure at all times that the products and/or services

bearing their Disney trademarks are of the highest standards.

12. The plaintiffs' licensees are engaged in the manufacturing

and selling of various products bearing the Disney trade mark and/or

the Disney characters. The plaintiffs have advertised the Disney

Characters over the years, and various advertisements bearing

Disney Characters have been published in various newspapers,

magazines and internet etc.

13. It is stated that Disney Characters are widely recognized

symbols of the quality and high standards of the plaintiffs‟ goods

and services alone and the plaintiffs have built up goodwill of

incalculable value in the said characters. So much so that a reputed

authority on brands i.e. World's Greatest Brands published by

Interbrand states that plaintiff No.1 reinvented the business of

character merchandizing, a copy of the relevant extract from the

same has been filed in the present proceedings. According to the

2009 study by Interbrand and Business Week, plaintiff No.1 is

the tenth greatest brand in the world with a brand value of

£28,447 million. According to the 2009 study by Business

Week, the plaintiff No.1 is the tenth greatest brand in the

World.

14. The word and devise marks Mickey Mouse, Minnie

Mouse, Donald Duck, Daisy Duck, Goofy and Winnie the Pooh, inter

alia, when used in relation to goods or services because of the

reputation and goodwill attached to them, are able to distinguish that

class of goods or services from others.

15. The plaintiffs have the exclusive right to use or authorize

the use of the name and physical depiction of the Disney Characters

under the trademark and unfair competition laws.

16. The plaintiff No.1 has set up a joint venture company,

plaintiff No.2, in India under a merchandising programme for

licensing its fictional characters to various business entities for

commercial and promotional purposes.

17. It is stated that in the month of March, 2006, the plaintiffs‟

discovered that the markets in Delhi were flooded with counterfeit

school bags bearing the names and likenesses of the plaintiffs'

characters Mickey Mouse, Minnie Mouse, Goofy, Pluto and

Daisy Duck. Thereafter, the plaintiffs‟ representative visited the

premises of the defendants to collect evidence of the

infringement and found that the defendants wer e engaged in

selling counterfeit bags. The plaintiffs‟ representative

purchased counterfeit bags from defendant No.2 to defendant

No.10. In the month of December 2009, the plaintiffs‟

representative once again visited the premises of defendant

No.9 and found that the defendants are still dealing counterfeit

products bearing the Disney characters. The cash receipt and

photographs of the products purchased from the premises of

defendant No.9 have been filed.

18. The use of the impugned mark by the defendant No.9

in relation to or upon paper articles, printed material, teaching

materials, stationery etc in the course of their business amounts

to an infringement of the plaintiffs‟ registered trademarks and

passing off of their business as one that is authorized by the

plaintiffs.

19. From time to time, there have been efforts made by

various parties to cash in on the reputation of the plaintiffs by

adopting their marks, and appropriate proceedings have been

taken up by the plaintiffs to defend their statutory and common

law rights in the said marks and the Courts in India have

repeatedly passed orders in favour of the plaintiffs.

20. It is stated by the plaintiffs that the adoption of the

identical marks Mickey Mouse, Minnie Mouse, Donald Duck,

Daisy Duck, Goofy and Pluto by the defendants is a mala fide

attempt to pass off their goods as those of the plaintiffs' or to

imply that their goods are connected with or approved by the

plaintiffs in some manner. The use of the Disney characters is

an unauthorized use by the defendants herein. The defendants

have not sought the plaintiff's consent, permission or licence

prior to using the names and depiction of the Disney characters

and have clearly been inspired to adopt the same on account of

goodwill and reputation of the plaintiffs‟ well-known

characters.

21. It is also the case of the plaintiffs that the illegal trade

activities of the defendants have caused incalculable harm and

injury to the business, goodwill and reputation of the plaintiffs.

The plaintiffs have suffered dilution a nd debasement of the

goodwill, reputation and positive associations linked to the

plaintiffs' trademark occasioned by the loss of distinctiveness,

uniqueness and exclusivity attached thereto. All profits earned

by the defendants in pursuance to its illegal activities are the

plaintiffs' losses and amount to unjust enrichment.

22. This Court vide order dated 05.04.2006 granted an ex parte

ad-interim injunction in favour of the plaintiffs and against the defendants

thereby restraining them from selling or manufacturing school bags

containing pictures or likenesses of the Disney characters. The Local

Commissioners were also appointed to visit the premises of the defendants

and seize the infringing products at the premises of the defendants.

23. The matter was decreed qua defendants No.1 to 8, 10 & 11 in

terms of the compromise arrived at between the plaintiffs and the said

defendants.

24. Defendant No.9 failed to appear before the Court despite its

service, hence defendant No.9 was proceeded ex parte vide order dated

28.05.2008.

25. The plaintiffs filed their ex parte evidence by way of affidavit

of Col. Retd. J.K.Sharma, their Constituted Attorney.

26. The present suit has been instituted by Mr. Anand Banerjee, the

previous Constituted Attorney of plaintiff No.1 by virtue of Power of

Attorney dated 16.08.2005 issued in his favour by plaintiff No.1 and the

same has been exhibited as Ex.PW1/4. Mr. Akhil Prasad, the previous

constituted attorney of the plaintiff No.2 has instituted the present suit on

behalf of plaintiff No.2 by virtue of a Power of Attorney dated 16.01.2006

issued by plaintiff No.2 and the same has been exhibited as Mark-C. The

Power of Attorney issued in favour of Mr. Akhil Prasad was signed by

Mr. Rajat Jain who was authorized to issue the said POA vide a Board

Resolution dated 09.12.2005. The said Resolution has been marked as

Ex.PW1/6.

27. Mr. Col. (Retd.) J. K. Sharma is the present Constituted

Attorney of the plaintiffs respectively and Col. (Retd.) Sharma‟s evidence

by way of affidavit has been filed in the present proceedings. Col. (Retd.)

Sharma was authorized by virtue of a Power of Attorney dated 07.07.2008

issued by plaintiff No.1 in his favour, which has been exhibited as

Ex.PW1/1. Plaintiff No.2 also authorized Col. (Retd.) Sharma by virtue of

a Power of Attorney dated 08.07.2008, which has been exhibited as

Ex.PW1/2.

28. The plaintiff No.1 together with its subsidiaries and affiliates is

a diversified international family and media enterprise with four business

segments: media networks, parks and resorts, studio entertainment and

consumer products, Extracts from the internet evidencing that plaintiff

No.1 is engaged in the business of theme parks, movies etc. has been

exhibited as Ex.PW1/8.

29. The Annual reports of plaintiff No.1 are exhibited as

Ex.PW1/9. The plaintiffs‟ characters are used in respect of a variety of

goods, including but not limited to, stationery products, apparel, toys,

books, video games, to name a few. Internet extracts evidencing the same

have been exhibited as Ex.PW1/10.

30. The list of countries in which the Plaintiff‟s trademarks are

registered has been marked as Mark-A. The extracts from the from the

website of the US and UK Trademark Registry evidencing that the

aforesaid marks are registered in favour of plaintiff No.1 have been

exhibited as Ex.PW1/12. The Certificate for use in legal proceedings

evidencing the same has been exhibited as Ex.PW1/13.

31. The extracts from a reputed authority on brands i.e. World‟s

Greatest Brands" published by Interbrand states that plaintiff No.1 has

virtually reinvented the business of „character merchandizing‟ and the said

extract has been exhibited as Ex.PW1/14.

32. An internet extract from www.interbrand.com stating that

plaintiff No.1 is the tenth greatest brand in the world with a brand value of

£28,447 million has been exhibited as Ex.PW1/15. An extract from the

Business Week stating that plaintiff No.1 is the tenth greatest brand in the

world is already exhibited as Ex.PW1/16. Certified copies of orders

passed in favour of the plaintiffs have been exhibited as Ex.PW1/22.

33. The plaintiffs also hold registrations in Class-28 under

Nos.743127, 596850, 516168 respectively which refers to "games,

playthings gymnastic and sporting articles not included in other classes,

decorations of chrismas tree". The certificate for use in legal proceedings

for the plaintiffs‟ trademark registrations in Class-28 has been exhibited as

Ex.PW1/13.

34. In the month of March, 2006 the plaintiffs discovered that the

markets in Delhi were flooded with counterfeit school bags bearing the

plaintiffs‟ Disney characters. Thereafter, the plaintiffs conducted an

investigation of various parties including that of defendant No.9 and

discovered that defendant No.9 is a retailer engaged in selling counterfeit

school bags manufactured by defendant No.2 bearing the Disney

characters. Photographs of said counterfeit bags purchased from the

premises of defendant No.9 have been exhibited as Ex.PW1/18.

35. In the month of December 2009, the plaintiffs‟ representative

once again visited the premises of defendant No.9 and found that the said

defendant is still dealing the counterfeit products bearing the Disney

characters. The cash receipt and photographs of the products purchased

from the premises of defendant No.9 have been exhibited as Ex.PW1/10,

Ex.PW1/20 and Ex.PW1/21.

36. It is submitted by the plaintiffs that they have suffered and are

likely to suffer incalculable harm and injury to the business, goodwill and

reputation on account of passing off of the defendant‟s products as that of

the plaintiffs. Therefore, the plaintiffs are entitled to permanent injunction

and damages against defendant No.9 in the present matter.

37. The learned counsel for the plaintiffs has relied upon the

judgment passed in the case of James Chadwick & Bros. Ltd. vs. The

National Sewing Thread Co. Ltd., reported in AIR (38) 1951 Bombay

147, the relevant paras of which read as under:-

"13. Reliance was placed on June's Case (Seville Perfumery Ld. vs. June Perfect Ld. and F.W. Woolworth & Co. Ltd., (1941) 58 R.P.C. 147). In that case, the distinguishing feature of the registered trade mark & the proposed trade mark was the word "June", & the Master of the Rolls in his judgment at p.162 observes:

"Now the question of resemblance & the likelihood of deception are to be considered by reference not only to the whole mark, but also to its distinguishing or essential features, if any."

The learned Master of the Rolls also says that (p. 162):

"In such cases the mark comes to be remembered by some feature in it which strikes the eye & fixes itself in the recollection. Such a feature is referred to sometimes as the distinguishing feature, sometimes as the essential feature, of the mark."

Therefore, the test we must apply in this case is, what is the feature in the appellants' trade mark which strikes the eye & fixes itself in the recollection, & the only answer to this question is that it is the Eagle which so strikes the eye & fixes itself in the recollection. Then we have the case of C. F. G. E. (In the matter of the Application of the Chemische Fabrik Greisheim Elektron for Registration of a Trade Mark) (1910) 27 R. P. C. 201 & this case was cited before us by the Advocate-General in order to draw our attention to the considerable dissimilarity between the proposed & the registered trade mark. The reason why registration was refused to the proposed trade mark was that the registered trade mark was a representation of primitive Eastern Dye Works & the same idea was conveyed by the proposed trade mark. It was urged before Neville J. that one trade mark was a representation of Japanese Dye Works & the other was Chinese. That argument did not find favour with the learned Judge & he answered it by saying that if orders were sent from the East to agents of either of these firms & they were told to send goods which had obtained popularity in the market by the trade mark representing Eastern Dye Works, goods bearing either

trademark would have answered to the requisition, & the main ground on which the learned Judge refused registration was that the main feature of both the pictures was identical, & according to the learned Judge that concluded the question. Our attention has also been drawn to one case of an Elephant Trade Mark in Upper Assam Tea Co. v. Herbert & Co., (1889) 7 R. P. C. 183 where from the trade marks printed in the report it is clear that the two elephants in the two trademarks look entirely different judging by the way they are represented, & yet, because the goods had been associated with the name of the elephant, injunction was granted to restrain the deft, who also wanted his goods to be sold under a trade mark, the main feature of which was an elephant. There is another case (In the Matter of Farrow's Trade Mark, (1890) 7 R. P. C 260) where we have trademarks of two buffaloes which look entirely dissimilar, & yet, again, as the goods had come to be associated with the buffalo, registration was refused to the subsequent applicant. There is another case also laying down the same principle in In the Matter of the Application of Pomril, Ld., (1901) 18 R. P. C. 181, where the goods in question were cider & the proposed trade mark had the name 'Pormil' written on half cut apple & the opposition came from sellers of cider who had their trade mark also containing an apple with the name "Apple Brand." In one case the name was "Pomril" & in the other case the name was "Apple Brand." Still registration was refused as the apple was considered to be the distinguishing & essential feature.

14. I should like to make it clear that there may be cases where dissimilarity in the object represented may be the deciding factor. If, for instance, this particular class of goods are sold by several dealers, all under different kinds of Eagle trademarks, then the purchaser is expected to know the difference between one trade mark & another, knowing as he does that more than one person sells goods under the same appellation. But when we have a case, as we have in this case, where only the appellants sell this class of goods under the Eagle Brand & their goods are known as Eagle or Eagley, then the position is very different, & any attempt to sell goods under a trade mark which fixes in the mind of the purchaser the association of an Eagle would not be justified."

38. The decision in James Chadwick (supra) was also confirmed

by the Supreme Court in the case titled as The National Sewing Thread

Co. Ltd. vs. James Chadwick & Bros. Ltd., reported in AIR 1953 SC

357.

39. It is the admitted position that the suit against defendants No.1

to 8, 10 & 11 has already been decreed by way of compromise. As far as

the only remaining defendant No.9 is concerned, the evidence adduced by

the plaintiffs has gone unrebutted. There is a sufficient material on record

to show that the plaintiffs are the proprietor of the trademarks in question

which have been infringed by defendant No.9. The said defendant was

also passing off its business as that of the plaintiffs. Therefore, the

plaintiffs are entitled for a decree for permanent injunction. It is held that