M/S. L???Oreal vs Mr. Dushyant Shah
2011 Latest Caselaw 4840 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                    Judgment Pronounced on: 28.09.2011

+ CS(OS) 600/2007

M/S. L'OREAL                                      ..... Plaintiff
                        Through: Mr. S.K. Bansal, Mr Pankaj
                        Kumar and Mr. Vikas Khera, Advs.

                     versus


Mr. DUSHYANT SHAH                                ..... Defendant
                Through: 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 injunction, rendition of accounts

and delivery up of the infringing material. The plaintiff is a

Company incorporated in France and is engaged in the

business of manufacturing, distribution and sale of a wide

range of hair care, skin care toiletries and beauty products

including perfumery preparations, essential oils, cosmetics,

preparations for colouring and bleaching the hair, hair dyes,

hair dyes and tints, shampoos etc. The word/mark

L'OREAL was adopted by the plaintiff Company in the first

decade of 1900 and is being used since about 1910-1915, in

relation to its goods and businesses. The plaintiff is selling

its goods under the trademark L'OREAL in about 130

countries throughout the world. The trademark L'OREAL is

also registered in India in Class 3, in relation to

perfumery/soaps, non-medicated toilet preparations

shampoos hair dyes etc. This is also the case of the plaintiff

that its trademark L'OREAL enjoys an enviable goodwill and

reputation in the market and has become

associated/identified with the goods and business of the

plaintiff company. The products of the plaintiff company

are available in or above 300 towns and cities in India. The

plaintiff has manufacturing plant in Chakan, near Pune in

Maharashtra and employs for 400 persons. The plaintiff

claims to be spending huge amount on advertisement and

promotion of its product sold under the name L'OREAL.

This is also the claim of the plaintiff that members of the

trade and industry as well as the consumers and general

public at large throughout world, including India, being well

aware of the trademark of the plaintiff, it is also a well

known trademark within the meaning of Section 2(1)(zg) of

the Trademarks Act.

2. The defendant filed an application for registration

of the trademark INSTITUTE TORREAL in Class 3 in

relation to bleaching preparations and other substances for

laundry use, cleaning, polishing, scouring and abrasive

preparations, soaps, perfumery, essential oils, cosmetics,

hair lotions, dentifrices, deodorants etc. which was

published in trademark journal on 21st September, 2002. It

is alleged that the trademark published in the trademark

journal is deceptively similar to the trademark L'OREAL of

the plaintiff, phonetically, visually as well as structurally

and use of the aforesaid mark would link the goods of the

defendant with that of the plaintiff company and give a

wrong impression to the customers with respect to the

source and origin of the goods. It is also alleged that in

February, 2007 plaintiff came to know that the defendant

was in the process of commercial launching of its goods

under the impugned trademark and was soliciting inquires

for dealership/distributorship in Delhi. The plaintiff has

sought injunction restraining the defendants from using the

impugned trademark INSTITUTE TORREAL or any other

mark which is identical and/or deceptively similar to

plaintiff's trademark L'OREAL. The plaintiff has also sought

delivery up of all material with impugned trademark and

damages amounting to Rs.20,01,000/-.

The defendant was proceeded ex parte vide order

dated 7th October, 2009.

3. The plaintiff has filed affidavits of two witnesses

viz. Ms. Akansha Bansal and Ms. Surbhi Bansal by way of

evidence. In her affidavit by way of evidence Ms. Akansha

Bansal has stated that the trademark L'OREAL (word mark),

L'OREAL (Label), L'OREAL LES TECHNICARES (word mark),

L'OREAL PROGRESS (word mark) & L'OREAL PLENTITUDE

(word mark) are registered in the name of the plaintiff in

Class 3 vide registration Nos. 165778, 473298, 557907,

499858 & 477223 respectively. She has further stated that

the plaintiff is doing business worth millions of dollars

under the trademark L'OREAL and has been regularly and

continuously promoting the aforesaid mark, spending

enormous amount on its promotion. She has claimed that

the mark L'OREAL of the plaintiff has acquired an enviable

and enduring goodwill and reputation in International

Market including India has become distinctive and

associated with the plaintiff company and its business. She

has further stated that the goods of the plaintiff are freely

available in India in more than 300 towns and cities and the

plaintiff company also has a plant at Chakan, Pune,

Maharashtra. According to her the members of the trade

and industry as also the consumer and general public at

large all over the world including India are well aware of

plaintiff's trademark L'OREAL. Mrs. Surbhi Bansal has

corroborated the testimony of first witness Ms. Akansha

Bansal.

4. Since the defendant is a resident of Ahmedabad

and is carrying business there, the first question which

comes up for consideration is as to whether this Court has

territorial jurisdiction to try the present suit. This is a suit

for infringement of the registered trademarks of the plaintiff.

Section 134(2) of Trademarks Act, 1999, to the extent it is

relevant provides that notwithstanding the provisions

contained in the Code of Civil Procedure, the Court within

the local limits of whose jurisdiction the person instituting

the suit resides or carries on business or personally works

for gain, at the time of the institution of the suit, would have

jurisdiction to try a suit for infringement of a registered

trademark. It is alleged in para 29 of the plaint that the

plaintiff is carrying on its business under the trademark

L'OREAL in Delhi where its goods are sold and are available.

In her additional affidavit Ms. Surbhi Bansal, constituted

attorney of the plaintiff has stated that at the time of filing

of the suit, the plaintiff-company had a subordinate office

and a technical centre within the jurisdiction of this Court

at 313, 3rd Floor, Saket District Centre, New Delhi and at

present, the office of the plaintiff-company is situated at C-

33, First Floor, opposite PVR Plaza, Connaught Place, New

Delhi. Along with an affidavit, she has filed a copy of the

lease deed dated 10th October, 2006, executed by Kavita

Laroia, owner of shop/commercial space No. 313,

admeasuring 1245.80 square feet, situated on the third

floor or Rectangle One, Saket District Centre, New Delhi in

favour of L'OREAL India Private Limited which is stated to

be the wholly owned subsidiary of the plaintiff in India. A

perusal of this document would show that the above-

referred premises in Saket, District Centre, Delhi was let out

to the plaintiff-company for commercial purposes w.e.f. 10th

October, 2006. Thus, the plaintiff-company did have an

office in Delhi when this suit was filed.

In para 31 of her affidavit, Ms. Akansha Bansal,

constituted attorney of the plaintiff company has stated that

one of the offices of Clearing and Forwarding Agencies of the

plaintiff company namely Navbharat Enterprises is situated

at Khasra No.70, Village Saidullajab, Near Gyan Jyoti Vidya

Niketan, SAidullajab, New Delhi, and as many as five

dealers/agencies of the plaintiff company namely Anand

Enterprises, Kwality Enterprises, Kapoor Agency, Pankaj

Store and GROP Enterprises have their offices in Delhi. She

has further stated that plaintiff is carrying on business in

Delhi, using the trademark/label L'OREAL and the goods

are sold through various special agents. It would thus be

seen that the plaintiff company had an office in Delhi when

the suit was instituted and continues to have an office in

Delhi, though it shifted to a new premises, it has special

agents in Delhi and is selling goods under the brand name

L'OREAL, in Delhi, through its special agents. The plaintiff

has also placed on record the invoice which would show

that L'OREAL India Pvt. Ltd., which is the fully owned

Indian Subsidy by the plaintiff company has been issuing

invoice to dealers from its Delhi office.

5. In Shree Rajmoti Industries vs. Rajmoti Oil Mill

Pvt. Ltd & Anr. 2005 (30) PTC 38 (Del), the plaintiff had

averred in the plaint that it was carrying on business in

Delhi and for this purpose it had referred to two of its

distributors. This was held to be a sufficient compliance

under Section 62(2) of the Copyright Act and Section 134(2)

of the Trademarks Act. In Ford Motor Company & Anr vs.

C.R. Borman & Anr. 2008 (38) PTC 76 (Del.) (DB), it was

alleged in the plaint that the plaintiff had service stations,

showrooms, authorized dealers and sales of its products

within the territorial jurisdiction of this Court. Prima facie

this was held to be sufficient to confer jurisdiction on Delhi

Courts.

6. The purpose behind Section 134(2) of Trademarks

Act, 1999 is to ensure that the proprietor of a registered

trademark does not have to face the inconvenience and lost

that is involved in suing the infringers at the place of their

residence/business when he happens to reside/carry

business at a place different from the place of the person

who owns the trademark. It was realized that suing the

infringer at the place of his residence/business is likely to

discourage legal action against infringement, particularly if

the infringers happen to be more than one and at different

places. I am in agreement with the learned counsel for the

plaintiff that considering the purpose behind enactment of

Section 134(2) of Trademarks Act, this provision needs to be

given a liberal construction and, therefore, the expression

"carries on business", used in the sub-Section needs to be

given a wider amplitude as compared to the scope to be

given to this expression in the context of Section 20 of the

Code of Civil Procedure. Moreover, if a company has an

office even if that to be a subordinate office within the

jurisdiction of a Court, it would be difficult to dispute that

the company carried on its business at that place as well. A

company may carry on business at more than one places

and one of those places may be where it has a subordinate

office. Establishing and maintaining a subordinate office

being a part of running the business of a corporation, it

would be difficult to say that a company does not carry out

a business at a place where it has a subordinate or a

subsidiary office. The plaintiff company not only had an

office in Delhi at the time this suit was filed, issue of

invoices from Delhi office of its subsidiary clearly shows that

it is actually carrying business from its Delhi office as well. I

need not examine the implication of the company doing

business in Delhi through its Delhi based

dealers/distributors.

In Varehouse Infotech Ceebros Arcade & Anr.

vs. SAP Aktiengesellschaft & Ors. 2010 (42) PTC 650 (Del.)

(DB), it was alleged in the plaint that plaintiff No.2 was

carrying business within the jurisdiction of this Court since

his branch office situated at 2nd Floor, Gesco Centre, 70,

Nehru Place, New Delhi. It was also alleged that training

services in SAP software were being offered by the

authorized partners of the plaintiff Siemens Information

Systems Limited in Delhi. Though it was also alleged that

the defendants were residing and carrying business in Delhi

that was disputed by the defendants when they appeared in

the Court. Referring to the decision of Supreme Court in

Dodha House vs. S.K. Maingi (2006) 9 SCC 41, with

respect to interpretation of the expression "carrying on

business", this Court was of the view that this expression is

rather expansive and included an interest in business at a

particular place. It was held that since the plaintiff was not

only having a branch office but was also imparting training

services through its authorized partners in Delhi, it was

carrying on business within the meaning of Section 62(2) of

Copyright Act. In the case before this Court also not only

the plaintiff had an office in Delhi at the time of institution

of the suit, it also claims to be carrying business in Delhi

through its special dealers. I, therefore, hold that this Court

does have territorial jurisdiction to try the present suit.

7. A perusal of the advertisement published in

September 21, 2002 issue of Trademark Journal would

show that defendant Dushyant applied for registration of

the trademark INSTITUTE TORREAL in respect of bleaching

preparations and other substances for laundry use,

cleaning, polishing, scouring and abrasive preparations,

soaps, perfumery, essential oils, cosmetics, hair lotions,

dentifrices, deodorants, for personal use sanitary

preparations being toiletries. There was a disclaimer on the

advertisement that the registration shall give no right to

exclusive use of the word INSTITUTE. This would mean

that essentially the defendant had applied for registration of

the trademark TORREAL in respect of various cosmetics

preparations, soaps, etc.

The next question which comes up for

consideration is whether mere applying for registration of a

trademark, which is identical with or deceptively similar to

the registered trademark of the plaintiff would give a cause

of action to the plaintiff to seek an injunction against

infringement of its registered trademark.

8. In Jawahar Engineering Company and Other vs.

Jawahar Engineers Private Limited, (1983) PTC 207, a

preliminary issue was framed as regards territorial

jurisdiction of the Court to try the suit. The defendants in

that suit had applied for registration of the trade mark

'Jawahar' in Delhi and the application was advertised in

Trade Mark Journal. On evidence, it was found that there

was no sale of the products of the defendants in Delhi and

the defendants had not advertised their products in Delhi.

There was an advertisement of the products of the

defendant in Journal published in Ludhiana. The learned

Single Judge of this Court held that the advertisement was

not sufficient to confer jurisdiction on the Courts in Delhi.

He, however, held that since there had been an

advertisement in the Trade Marks Journals published at

Delhi, that conferred jurisdiction on the Courts at Delhi.

The Division Bench held that the real point which gave

Delhi Court jurisdiction was the fact that the trade mark

was sought for sale in Delhi, amongst other places. The

Division Bench was of the view that when an injunction is

sought, it is not necessary that the threat should have

become the reality before the injunction and it can even be

sought for a threat, which is yet to materialize. It was

further held that since the plaintiffs had learnt that the

defendants had applied for registration of trade mark in

Delhi, they could claim for injunction to prevent any sale of

the infringing products in Delhi and in that case, Delhi

Courts would have jurisdiction, whether any sale in Delhi

has taken place or not.

9. This issue again came to be considered by this

Court in the case of Pfizer Product Inc. vs. Rajesh

Chopra, 2006 (32) PT 30, where the Court considered the

decision of Dodha House & Patel Field Marshal Industries

(supra). This Court was of the view that the decision in

Jawahar Engineering (supra), was not disapproved by

Supreme Court in Dodha House (supra). In taking this

view, this Court took note of the fact that in the case of

Dodha House (supra), Supreme Court had noted that that

no application had been filed for registration of the trade

mark whereas in the case of P.M.Diesels, the parties were

residents of Rajkot and the application for registration had

been field in Bombay. This Court, therefore, concluded that

this was not the ratio of Supreme Court decision in Dhodha

House (supra) that the filing of an application with the

Registrar of Trade Marks, at a particular place would not

clothe the courts at that place with territorial jurisdiction to

entertain the matter. The ratio of the Supreme Court

decision in Dhodha House (supra), in the opinion of this

Court, was that an advertisement by itself in a Trade Mark

Journal would not confer jurisdiction on a Court within

whose territorial limit the advertisement is published or is

seen. In the opinion of this Court, if an application for

registration of the impugned trade mark is made in the

territorial jurisdiction of a Court that Court would have

jurisdiction to try the suit relating to the particular trade

mark. Since defendants applied for registration of the trade

mark to the Registrar of Trade Marks at Delhi, as is evident

from the advertisement, this Court would have jurisdiction

to try the present suit.

10. In Mars Incorporated vs. Kumar Krishna

Mukerjee & Ors. 2003 (26) PTC 60 (Del), the defendant

sought to incorporate a company named MARS FOODS PVT

LTD, though mark was the registered trademark of the

plaintiff company. The question which came up for

consideration before this Court was as to whether a person

who has not suffered any damage in respect of trade either

due to competition or due to deceptive or confusing

similarities of the trademark adopted by the defendant has

any right to challenge the act of the defendant in seeking to

incorporate a company under a name which included the

name of the registered trademark of the plaintiff company.

The defendant in that case had been incorporated as a

company but had not commenced operations by

manufacture of sale of goods. Upholding the right of the

plaintiff to maintain cause of action on account of

apprehension of infringement of its trademark, this Court

inter alia observed as under:-

To expect the aggrieved party to wait and watch for the opening of business or manufacturing or sale of goods under the apprehended infringement of trade mark is too much. A stitch in time always saves nine and that is what is the essence of Quia Timet Action...

...Let us assume that infringer has no past history of either squatting or hoarding the domain name, trade name and comes out with advertisement for the first time for registering its Corporate name by adopting the similar name or deceptively or confusingly similar name without

immediate intention to start its business. Whether or not the plaintiff whose name is sought to be infringed has a remedy to forestall the defendant from adopting its name or from opening up of the business under the plaintiff's trade name. the answer in any eventuality is in affirmative.

The plaintiff has the same degree of right to protect its trade name from infringement as it has against infringement of registered name or in an action of passing off in respect of manufacturing or selling or offering to sell the goods by the defendants under the plaintiff's trade name. The genesis is the underneath intention which is not difficult to fathom. Why one should choose or pick up the name or mark which has already become famous and well known and whose reputation and goodwill is all pervading and is obviously hard earned. The only intention or object is to thrive upon the goodwill and reputation and confuse the purchasers of his goods into believing that the defendants' goods or business in one way or other is connected with the plaintiff. Obvious object is to cash on exploit the goodwill, reputation, name and trade mark of the plaintiff...

...It is immaterial whether or not there is a real or tangible possibility of starting a business. Such a threat will even loom large over the head of the plaintiff and therefore entitle him to resort to Quia Timet Action as the intentions are bad, designs are dubious. There is no other object of such a defendant than to hoard the trade mark and black mail the plaintiff in order to use it in future. Thus, in both the cases, the action and proposed activities are manifestly mala fide and calculated to deceive the public or would be purchasers

as to the connection of the defendants with the plaintiff.

As the saying goes, the evil should be nipped in the bud so is the nature of Quia Timet Action where the injury or damage has been caused.

In KRBL Limited vs. Ramesh Bansal & Anr. 2009

(41) PTC 114 (Del), the plaintiff was registered proprietor of

the trademark/label "India Gate", which it was using for

selling rice. The defendant applied for registration of the

same mark in respect of salt. The right of the plaintiff to

maintain a quia timet action was upheld by this Court.

11. It is difficult to dispute the apprehension of the

plaintiff that the ultimately purpose of seeking registration

of the trademark TORREAL, under the same Class and in

respect of the same goods for which the mark L'OREAL is

being registered by the plaintiff is to launch similar

products in various marks, under the brand name

TORREAL. Therefore, I am in agreement with the learned

counsel for the plaintiff that seeking registration of the

trademark INSTITUTE TORREAL with a disclaimer in

respect of the word INSTITUTE gave sufficient cause of

action to the plaintiff company to seek injunction against

infringement of its registered trademark L'OREAL by the

defendant.

12. To constitute an infringement, a person need not

adopt and use the whole of the mark of the plaintiff and it is

sufficient if the mark used or proposed to be used by him is

identical with or deceptively similar to the mark of the

plaintiff. The similarity between the two marks can be

phonetic, visual, structural or otherwise. In fact any clever

person seeking to encash upon the reputation and goodwill

of an established brand would not adopt that mark in toto

and would make some changes here and there so that in the

event of his mark being challenged in the Court, he may

take the plea that the mark adopted by him is not identical

to the mark of the plaintiff. Hence, what the Court is called

upon to examine is whether the trademark used or

proposed to be used by the defendant is visually,

phonetically, structurally or otherwise so similar to the

trademark of the plaintiff that it can be said to be

deceptively similar mark. It is difficult to dispute that

phonetically and structurally, the mark L'OREAL and

TORREAL are similar. The first difference in the two marks

are that the first letter in the mark of the defendant is "T" as

against "L" in the mark of the plaintiff and the defendant

has used two "R" in the word TORREAL whereas the

plaintiff has used only one "R" in L'OREAL. Another

dissimilarity is that (') has been used by the plaintiff after

the letter "L" in the mark L'OREAL whereas the defendant

has used it after letter "T" in the mark TORREAL. These

dissimilarities, to my mind, are rather insignificant and

trivial in nature, when weighed against the striking phonetic

and structural similarities between the marks L'OREAL and

TORREAL. Therefore, in my view, use of the mark

TORREAL by the defendant, for sale of the similar products

which the plaintiff company is selling under the brand name

L'OREAL would constitute infringement and, therefore, the

plaintiff is entitled to an injunction restraining the

defendant from using the aforesaid mark.

13. For the reasons given in the preceding paragraphs,

the defendant is restrained from using the mark TORREAL/

INSTITUTE TORREAL or any other mark identical with

deceptively similar to the registered mark L'OREAL of the

plaintiff in respect of the products which the plaintiff

company is selling under its trademark L'OREAL.

Considering the fact that there is no evidence of the

defendant having actually sold any goods under the

trademark TORREAL/INSTITUTE TORREAL, this is not a fit

case for awarding any damage to the plaintiff. In the facts

and circumstances of the case, there shall be no order as to

costs.

Decree sheet be prepared accordingly.

(V.K. JAIN) JUDGE SEPTEMBER 28, 2011 'sn'/vn/bg/ag