Lt Foods Limited And Another vs Sulson Overseas Pvt Ltd
2012 Latest Caselaw 3752 Del

*            HIGH COURT OF DELHI: NEW DELHI

%                                           Order decided on: 02.07.2012

+            I.A. No.7955/2011 in CS (OS) No.1190/2011


LT FOODS LIMITED AND ANOTHER                     ..... Plaintiffs
                Through: Mr. J. Sai Deepak, Adv.

                        Versus

SULSON OVERSEAS PVT LTD                       ..... Defendant
              Through: Mr. Samir Sagar Vasistha, Adv. with
                       Mr. Devender Singh Thakur, Adv.

CORAM:
HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. By this order, I propose to dispose of the pending application filed by the plaintiffs under Order XXXIX, Rules 1 & 2 CPC, being I.A. No.7955/2011 in the above-mentioned suit for permanent injunction restraining the infringement of trade mark, passing off, rendition of accounts of profits/damages, delivery up, acts of unfair competition etc.

2. The case of the plaintiffs is that plaintiff No.1 earlier known as LT Overseas Limited, was incorporated in the year 1990. The plaintiff No.1 is in the business, inter-alia of processing, marketing and exporting rice. It is a Rupees 700 crore company and is one of the leaders in the food products business. The plaintiff and its group companies own 5 state of art ultra modern rice plants. The plaintiff No.1 is ranked among the top 10 food processing companies in Northern India, and among the

top 50 companies by Dun and Bradstreet 8 th Edition of India's Top 500 Companies, 2007.

3. It is submitted that the plaintiff No.1 has also made inroads into 43 countries across the globe including markets, like USA, Canada, UK and EU. In order to strengthen its presence in the global market, the plaintiff No.1 acquired Kusha Inc in 2007; Kusha Inc has a 42% share in the US market, giving plaintiff No.1 a combined share of 52% of the US rice market. This was also the first by an Indian Rice Company.

4. It is further submitted that out of the various well-known trademarks adopted by the plaintiff, one trademark is "SONA" which was adopted by plaintiff No.1's predecessor, namely, M/s Lal Chand Tirath Ram Mills since the year 1987. The said trademark SONA was duly registered under No.497518 as on 08.09.1988 in class 30 in respect of rice. The said firm was continuously using this trade mark SONA till 1999 and on 26th March, 1999 the plaintiff No.1 took over M/s Lal Chand Tirath Ram Mills as a going concern along with all its trademarks including the trademark SONA. Pursuant to the execution of the said agreement, with effect from 1st April, 1999, the entire business of M/s Lal Chand Tirath Ram Mills stood transferred in the name of the plaintiff No.1 along with all the trademarks including the trademark SONA. Thereafter, a separate Deed of Assignment dated 25.07.2003 was executed for the affirmation of transferring of all the trademarks of the said predecessor of plaintiff No.1 including the trademark SONA. The request on Form TRADE MARK-24 dated 07.06.2004 for recording the name of plaintiff No.1 as the subsequent proprietor of the aforesaid trademark SONA has already been filed with the office of the Trade Marks Registry and the same is pending disposal.

5. It is also submitted that plaintiff No.1 also sold rice under the trademark SONA processed by M/s Lal Chand Tirath Ram Mills before the execution of the aforementioned agreement dated 26.03.1999. Since the year 1999, the goods under the trademark SONA are being sold by the plaintiffs' sole selling distributor M/s Raghunath Agro Industries, Amritsar, plaintiff No.2 under the Trade Mark License Agreement dated 16.10.2007 which recorded the mutual understanding reached in the year 1999.

6. The plaintiffs have given the statement of annual sales, domestic as well as international market, in respect of rice under the trademark SONA in para-11 of the plaint from the year 1986-87 onward up to 2010-11. Similarly, in para-12 of the plaint, the plaintiffs have given the statement of advertisement and promotional expenses of plaintiff No.1 from the year 1994-95 till 2010-11. It appears from the said statement of sale figures as well as that of advertisement and promotional expenses that the plaintiffs have been carrying on business under the said trademark for hundreds of crores of rupees till date.

7. The allegations against the defendant are that the defendant was engaged in the business of marketing rice under the trade mark GANGA and suddenly, it adopted the trademark SONA which is identical to the plaintiff No.1's registered trademark SONA. The plaintiff has opposed the defendant's application for registration of the mark SULSON SONA under No.1951222 dated 16.04.2010 which was published in journal 1460 dated 29.11.2010, made available to the public on 29.11.2010, under opposition No.777099 dated 19.01.2011. It is stated in the plaint that by the use of the trademark SONA or SULSON SONA by the defendant, it is guilty of infringement of trademark as well

as passing of its goods as that of the plaintiff. therefore, the suit was filed before this Court which was listed first time before the Court on 13.05.2011 and the Court passed the interim orders restraining the defendant, their directors, distributor and dealers from processing, selling, exporting, marketing, advertising, offering for sale, rice or any other cereals under the trademark SONA or any other trademark which is deceptively similar with the plaintiff's trademark. The said interim order was continued from time to time till the hearing of the injunction application.

8. The defendant has filed the written statement and raised the following defences:-

(a) That the defendant is using the trademark SULSON SONA in respect of rice. The plaintiff is using the trademark SONA and the two trademarks of the parties are not deceptively similar, hence no infringement and passing off.

(b) That the suit of the plaintiff is barred by limitation, as the defendant has filed the application for registration on 20.03.2007 bearing the mark SULSON SONA.

(c) The defendant was incorporated in the year 2009 and is carrying on business of production, export and import of various agro products and earlier to the incorporation of the defendant-company, Mr. Rajesh Kumar, one of the Directors of the defendant-company was running a proprietorship concern, namely, Sulson Overseas since the year 2005. The trademarks SULSON SONA and SULSON GANGA were being used by the defendant, which was exporting the basmati

rice to various countries all over the world, i.e. Germany, Mauritius and other European countries. The defendant has never used the trademark SONA independently. The plaintiff has started exporting the goods only from 2008 onwards. Therefore, in order to harass the defendant, the present suit has been filed, as the defendant was earlier exporting the goods than the plaintiff, bearing the trademark SONA.

9. Both the parties have referred their respective documents. From the facts and circumstances, it has to be examined as to whether two marks used by the plaintiff SONA and SULSON SONA by the defendant are deceptively similar or not.

10. The expression "deceptively similar" has been defined in Section 2(h) of the Trade Marks Act, 1999, as follows:-

"A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles the other mark as to be likely to deceive or cause confusion."

11. Mr. Rajesh Kumar, who is the Director of the defendant- company earlier applied the trade mark SULSON SONA bearing Application No.01541452 dated 20.03.2007 as a proprietor of M/s Sulson Overseas. The scanned copy of the representation is shown as under:-

12. The law relating to infringement of a registered trademark has been envisaged u/S 29 of the Trade Marks Act, 1999 and exclusive rights granted by virtue of registration under Section 28 which reads as under:-

"29. Infringement of registered trade marks - "Infringement of registered trade marks.- (1) 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 is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.

(2) 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 because of-

(a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or

(b) its similarity to the registered trade mark and the identity or

similarity of the goods or services covered by such registered trade mark; or

(c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark. (3) In any case falling under clause (c) of sub- section (2), the court shall presume that it is likely to cause confusion on the part of the public.

(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. ......"

"28. Rights conferred by registration -

(1) Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act. (2) The exclusive right to the use of a trade mark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.

(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those person as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor."

By mere reading of these provisions, it is clear that a registered trademark is infringed by a person who not being a registered proprietor, uses in the course of trade a mark which is identical or deceptively similar in relation to the goods or services which are identical or similar to that in respect of which the trademark is registered without the permission of the trademark owner.

13. Therefore, in case the aforesaid requirement made out by the plaintiff by showing that the defendant's mark is identical with or so nearly resembles the plaintiff's mark either visually, phonetically or otherwise that it is likely to deceive or cause confusion in relation to the goods in respect of which the plaintiff got his mark registered. Further, if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that there are additional features in the defendant's mark, the same is immaterial in case the essential features have been copied. Then action for infringement is made out as by virtue of registration, the party gets exclusive and statutory rights under Section 28 of the Act and the registration granted is to be taken as prima facie evidence of validity.

14. In the case of Kedar Nath vs. Monga Perfumery & Flour Mills, Delhi-6, reported in AIR 1974 Delhi 12, under the similar circumstances, the Court held that the case of infringement of the trademark is made out. The two rival trademarks in the said case were SUDERSHAN and VIJAY SUDERSHAN. The relevant paras-13, 14 & 15 of the said judgment read as under:-

"13. The certificate of registration of the trademark is Prima facie evidence of the validity thereof under Section 31 of the Act. The registration of the trade mark, if valid, elves to the registered proprietor of the trade mark under Section 28 of the Act the exclusive right to its use in relation to the goods in respect of which it is registered and further to obtain relief in respect of its infringement in the manner provided by the Act. Under Section 29(1) of the Act:

"29. (1) A registered trade mark is infringed by a person who not being the registered proprietor of the trade mark or a registered user thereof using by way of permitted use uses in the course of trade a mark which is identical with, or deceptively similar to the trade mark, in relation to any goods in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark."

14. xxxxxxxxxxxxx

On an ocular examination it appears that there is close similarity and identity in the essential features of the two cartons. In my opinion the carton, mark and the label etc. of the defendant constitute a clear infringement of the plaintiff's registered trademark and of his statutory right to its exclusive use. The infringement of the registered trademark of the plaintiff committed by the defendant, being contrary to the provisions of Section 28, is illegal and defendant cannot be allowed to continue in its illegal activity. The balance of convenience is in favor of the plaintiff. The defendant has

several other brands of dhoop and he can carry on his business of selling dhoop-batti in the other brands. As the defendant has failed to place material facts before the Court from which it can be inferred that the defendant has been using his trade mark since 1952, 1 have not considered it necessary to put the plaintiff on terms. The plaintiff ' has a statutory right to the exclusive use of the trademark. He complains of infringement. To protect his right in the property, far trademark is a property; an injunction should be issued in his favor.

15. I would, therefore, accept the application, I. A. 1032 of 1972 and grant a temporary injunction to the, Petitioner restraining the respondent, its servants, agents, representatives from manufacturing, selling or offering for sale or otherwise dealing in dhoop bearing the trade mark Sudershan with or without any prefix or suffix and from printing reproducing, using wrappers and cartons as are identical or deceptively similar to the wrappers and cartons of the petitioner."

15. For answering the defence raised by the defendant in the present case as to whether the mark used by the defendant is deceptively similar, the Division Bench of this court in the case of M/s. Atlas Cycle Industries Ltd. Vs. Hind Cycles Limited, reported in ILR 1973 Delhi 393 has examined the similar question very thoroughly while dealing with the two rival trademarks Royal Star and Eastern Star of the parties and has come to the conclusion that the trade mark adopted and used by the defendant Royal Star is similar to plaintiff's trade mark Eastern Star.

16. The Division Bench has discussed a catena of decisions in this regard. Some of them are as follows:

(a) In Messrs Modi Sugar Mills Limited v. Tata Oil Mills Ltd. Co., reported in A.I.R. 1943 Lahore 196, Tek Chand

and Sale JJ pointed out at page 202 that "what has to be seen is not that there is a possibility of confusion, but that the resemblance is such that there is a reasonable probability of deception". The learned Judges, relying on the observation of the Privy Council in Thomas Bear and Sons (India) Ltd. v. Pravag Narain, Air 1940 Privy Council 86, approving the test laid down by Niamat Ullah J. in Thomas Bear and Sons (India) Ltd. v. Pravag Narain, Air 1935 Allahabad 7, observed that "in the judging of the probability of deception, the test is not whether the ignorant, the thoughtless, or the incautious purchaser is likely to be misled, but we have to consider the average purchaser buying with ordinary caution.

(b) In James Chadwick & Bros. Ltd. v. The National Sewing Thread Co. Ltd, reported in AIR 1951 Bombay, Chagla CJ and Bhagwati; referring to the words "likely to deceive or cause confusion" in section 10 of the Trade Marks Act, 1940, observed at page 152 as follows :-

"Now in deciding whether a particular trade mark is likely to deceive or cause confusion, it is not sufficient merely to compare it with the trade mark which is already registered and whose proprietor is offering opposition to the registration of the former trade mark. What is important is to find out what is the distinguishing or essential feature of the trade mark already registered and what is the main feature or the main idea underlying that trade mark, and if it is found that the trade mark whose registration is sought contains the same distinguishing or essential feature or conveys the same idea, then ordinarily the Registrar would be right if he came to the conclusion that the trade

mark should not be registered. The real question is as to how a purchaser, who must be looked upon as an average man of ordinary intelligence, would react to a particular trade mark, what association he would form by looking at the trade mark, and in what respect he would connect the trade mark with the goods which he would be purchasing. It is impossible to accept that a man looking at a trade mark would take in every single feature of the trade mark. The question would be, what would he normally retain in his mind after looking at the trade mark? What would be the salient feature of the trade mark which in future would lead him to associate the particular goods with that trade mark?"

(c) In Amritdhara Pharmacy v. Satya Deo Gupta, reported in AIR 1963 SC 449, the question was whether the trade name "Lakshmandhara" was likely to deceive the public or cause confusion to trade in view of the trade name "Amritdhara" which had already been registered, as a trade name.

17. In view of the settled law as referred above, it is clear that the plaintiffs have been able to make out a strong prima-facie case for infringement of the trademark, as the two trademarks are deceptively similar.

18. There is no force in the submission of the learned counsel for the defendant that the defendant can take the advantage of the export of its rice bearing the trademark SONA in earlier point of time than the plaintiff, as alleged. Admittedly, in the present case, the plaintiff No.1 and its predecessors M/s Lal Chand Tirath Ram Mills have been using the trademark SONA since the year 1987. The said trademark was

registered in favour of the predecessor of plaintiff No.1-firm which was taken over by plaintiff No.1 in the year 1999. The registration date is 08.09.1988. The sales figures and advertisement figures show that the plaintiffs have been carrying out their business bearing the trademark SONA in hundred crores of rupees. As far as the international business is concerned, the plaintiff has given the separate annual sales figures of international market since the year 2002-03 onwards in para-11 of the plaint when the defendant was not carrying on any business in India or export its goods.

19. Assuming the statement of the learned counsel for the defendant is correct, even otherwise, under Section 56 of the Trade Marks Act, 1999, no benefit can be derived to the defendant on account of the earlier export of goods under the trademark, if any. Section 56 of the Act reads as under:-

"56. Use of trade mark for export trade and use when form of trade connection changes. - (1) The application in India of trade mark to goods to be exported from India or in relation to services for use outside India and any other act done in India in relation to goods to be so exported or services so rendered outside India which, if done in relation to goods to be sold or services provided or otherwise traded in within India would constitute use of a trade mark therein, shall be deemed to constitute use of the trade mark in relation to those goods or services for any purpose for which such use is material under this Act or any other law.

(2) The use of a registered trade mark in relation to goods or services between which and the person using the mark any form of connection in the course of trade subsists shall not be deemed to be likely to cause deception or confusion on the ground only that the mark has been or is used in relation to goods or services between which and the said person or a predecessor in title of that person a different

form of connection in the course of trade subsisted or subsists."

20. The learned counsel for the defendant has argued that there is a delay on the part of the plaintiffs in bringing the action before this court. In the case of Midas Hygiene Industries Pvt. Ltd. vs. Sudhir Bhatia and others, 2004 (Vol.28) PTC 121, relevant para-5 of the said judgment is as under:

"5. The law on the subject is well settled. In cases of infringement either of Trade Mark 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."

21. It is settled law that the foundation of the law of infringement of the trade mark and copyright and of passing off is honesty. No one shall be permitted to enrich himself on the goodwill and reputation built up or earned by anyone else.

22. In the case of Swarn Singh vs. Usha Industries (India) and Anr., AIR 1986 Delhi Page No.343 (DB) it was held as under :

"There is then the question of delay. Learned counsel for the respondents had urged that the delay is fatal to the grant of an injunction. We are not so satisfied. A delay in the matter of seeking an injunction may be aground for refusing an injunction in certain circumstances. In the present case, we are dealing with a statutory right based on the provisions of the trade and Merchandise Marks Act, 1958. An exclusive right is granted by the registration to the holder of a registered trade mark. We do not think statutory rights can be lost by delay. The effect of a registered mark is so clearly defined in the statute as to be not capable of being misunderstood. Even if there is some delay, the exclusive

right cannot be lost. The registered mark cannot be reduced to a nullity....."

23. In the case of Hindustan Pencils Pvt. Ltd. Vs. M/s India Stationery Products Co., AIR 1990 DELHI 19 it was held as under :

"................. It was observed by Romer, J. in the matter of an application brought by J.R. Parkingnon and Co. Ltd., (1946) 63 RPC 171 at page 181 that "in my judgment, the circumstances which attend the adoption of a trade mark in the first instance are of considerable importance when one comes to consider whether the use of that mark has or has not been a honest user. If the user in its inception was tainted it would be difficult in most cases to purify it subsequently". It was further noted by the learned Judge in that case that he could not regard the discreditable origin of the user as cleansed by the subsequent history."

24. In the case of M/s. Bengal Waterproof Lim. Vs. M/s. Bombay Waterproof Manufacturing Co. AIR 1997 SC 1398 it was held as under:

"20.........It is now well settled that an action for passing off is a common law remedy being an action in substance of deceit under the Law of Torts. Wherever and whenever fresh deceitful act is committed the person deceived would naturally have a fresh cause of action in his favour. Thus every time when a person passes off his goods as those of another he commits the act of such deceit. Similarly whenever and wherever a person commits breach of a registered trade mark of another he commits a recurring act of breach or infringement of such trade mark giving a recurring and fresh cause of action at each time of such infringement to the party aggrieved. It is difficult to agree how in such a case when in historical past earlier suit was disposed of as technically not maintainable in absence of proper relief, for all times to come in future defendant of such a suit should be armed with a license to go on committing fresh acts of infringement and passing off with

impunity without being subjected to any legal action against such future acts."

25. Under these circumstances, it appears that on the date of adoption of the trade mark SONA, the conduct of the defendant was dishonest. It must be aware about the trade mark of the plaintiff and its goodwill and reputation. The defendant has taken the entire trademark of the plaintiff without any justification.

26. In my opinion, the plaintiffs have made out a prima facie case of infringement of their trade mark and copyright by the defendant. The balance of convenience also lies in favour of the plaintiffs and against the defendant. If the defendant is permitted to accomplish and perpetuate its action and pass off their goods as plaintiffs, the plaintiffs are likely to suffer grave injury.

27. Having regard to all these circumstances, the present application is allowed. Thus, till the disposal of the present suit, the defendant is hereby restrained from processing, selling, exporting, marketing, advertising, offering for sale of rice or any other cereals under the trade mark SONA or any other trade mark which may be identical with and/or deceptively similar to the plaintiffs' trade mark SONA which results in infringement of plaintiff No.1's registered trade mark No.497518 or acts of passing off. The application is accordingly disposed of.

28. However, the defendant is granted three months' time to dispose of the existing material, if any, bearing the trademark SONA.

29. The findings given herein are tentative which shall not have bearing in any manner when the matter would be considered by the Court after the trial.

CS(OS) No.1190/2011

List on 13th August, 2012 before the Joint Registrar for further proceedings.

MANMOHAN SINGH, J.

JULY 02, 2012