Delhi High Court

M/S. Fastrack Communications ... vs Manish Singhal on 15 March, 2012

Author: Kailash Gambhir

$~
*     IN THE HIGH COURT OF DELHI AT NEW DELHI


+     CS(OS) 2484/2010


M/S FASTRACK COMMUNICATIONS PVT LTD               ..... Plaintiff
                 Through Mr. Vijay Pal Dalmia with Mr. Vikas
                           Mishra and Mr. P. Singh Katoch,
                           Advs.

                        versus


      MANISH SINGHAL              ..... Defendant
                   Through Mr. M.K. Miglani and Mr. Kapil
                             Kumar Giri, Advs.


      CORAM:
      HON'BLE MR. JUSTICE KAILASH GAMBHIR


                   ORDER

% 15.03.2012

1. The plaintiff has filed the present suit for permanent injunction

to restrain the defendant from using, manufacturing, importing and

marketing mobile phone, mobile spare parts and accessories under the

trademark „LEMON‟ or any other deceptively similar trademark. The

plaintiff has also claimed damages for a sum of Rs. 20 lakhs.

2. Brief facts of the case are that the plaintiff company was

incorporated in the year 2008 and since then has been manufacturing and

marketing mobile phones, mobile spare parts and accessories etc. under the

trademark "LEMON". It is also the case of the plaintiff that due to the

continuous and uninterrupted use of the said trademark "LEMON", the

plaintiff has acquired goodwill and reputation with respect to its product

under the trademark „LEMON‟ and has spent considerable amount on

advertisement and marketing of its product under the trademark "LEMON"

and sale figures of the said product being sold by the plaintiff has gone

multifold during the last two years. It is also stated by the plaintiff that it

has applied for registration of its trademark "LEMON" vide application No.

1791271 and 1823094 in Class 9. It is also the case of the plaintiff that on

21st July, 2010 for the first time it got to know through the trademark

journal that the defendant had also applied for registration of the same

trademark "LEMON" in Class 9 and that it has already filed opposition

against the said application of the defendant. It is also the case of the

plaintiff that the Registrar of Trademarks has wrongly accepted the

application for registration of the defendant although the application moved

by the plaintiff was prior in time. The plaintiff has further stated that on 23rd

November, 2010 it had received information from market sources that the

defendant was planning to launch mobile phones under the trademark

"LEMON" in the market. The plaintiff has thus claimed that since the

plaintiff is using the said trademark prior in time and, therefore, any

attempt made by the defendant to use the said trademark would lead to

passing off the right of the plaintiff in the said trademark.

3. Along with the present suit, the plaintiff had also filed

application under order 39 rule 1 & 2 for grant of stay which was taken up

by this Court on 18th January, 2011 and the defendant through its counsel

stated that he will not use the trademark "LEMON" in respect of mobile

phones and mobile accessories unless and until the registration application

filed by the defendant before the Registrar of Trade Marks and the

opposition filed by the plaintiff are decided in favour of the defendant.

Based on the said submission of counsel for the defendant, the stay

application was accordingly disposed of without passing any further

direction. The said submission was again reiterated by the counsel for the

defendant on 2nd March, 2012 and submitted that the suit filed by the

plaintiff is premature in the view of the said submission made by the

defendant the counsel for the plaintiff took time to take instructions as to

whether to continue the present suit or not.

4. Counsel for the plaintiff before this court today instead of

withdrawing the present suit based on the said submission of the defendant

has laid stress on the continuation of the present suit and stated that the

rights of the plaintiff can only be determined through the present suit and

not before Registrar of Trademarks where the parties have filed their

application for registration of the same trademark "LEMON". It is also

submitted that plaintiff had applied for the registration of the trade mark

"LEMON" vide its applications No. 1791271 and 1823094 and on the other

hand, the defendant had applied to seek registration of the same Trademark

vide application no.1797433 . Counsel submits that since the plaintiff had

learnt that defendant has also applied to seek registration of the same

trademark, therefore, the plaintiff has every right to file the present suit

seeking injunction against the defendant. It is also submitted that in the

present suit, the plaintiff is seeking restraint order against the defendant as

the plaintiff is prior user of the said trademark "LEMON" and the

defendant, on the other hand, is yet to use the said trademark for which

already the defendant has given confirmation by seeking registration of the

same with the Registrar of the Trademarks. Counsel for the plaintiff also

submits that in any case, order of this Court cannot be made subject to the

order of the Trademark authority.

5. On the other hand, counsel for defendant has submitted that the

plaintiff‟s submission that the application of the defendant has been

accepted by the Registrar of Trademarks is false as the application filed by

the defendant has merely been advertised in the Trademark journal before

acceptance and the plaintiff has already filed opposition to the said

application moved by the defendant. Counsel also submitted that both the

said applications filed by the respective parties are pending consideration

before the Registrar of Trademarks prior to the filing of the present suit.

Counsel has also submitted that the defendant has already taken a stand

that there are no goods of the defendant in the market and, therefore, the

plaintiff cannot maintain the present suit against the defendant and that the

same is set out in the plaint itself by the plaintiff.

6. It is not in dispute between the parties that the application of

the defendant for the registration of the trademark "LEMON" is pending

consideration before the Registrar of Trademarks and an opposition to the

said application has been filed by the plaintiff. However, it is the stand of

the plaintiff that the defendant is planning to launch the mobile phone

under the trademark "LEMON" in the market, which would clearly mean

that on the date of the filing of the suit the defendant was yet to bring out

his product under the said trademark "LEMON". It would be worthwhile to

reproduce paras 23,25, 27 and 29 of the same as under:-

"23. That recently on 23rd November, 2010, the Plaintiff received information from some market sources that the Defendant is planning to launch mobile phones under the trademark "LEMON" in the market to take undue and illegal advantage and further to trade upon the exceptional goodwill, reputation, proprietary and common law rights of the Plaintiff in the said Trade Mark, as presently the demand for mobile phones in the market is huge, which will enable the Defendant to make quick money out of the goodwill and reputation of the Plaintiff. This information has prompted the plaintiff to file the present suit immediately. The Plaintiff apprehends that the Defendant, in all probabilities, may import and market mobile phones under the impugned Trademark "LEMON" and start marketing the same in Delhi

and other places in India, out of positive greed with a view to take advantage and to trade upon the established goodwill, reputation, proprietary and common law rights of the Plaintiff in the said Trade Mark.

24. xxxx xxxxx xxxx

25. It is submitted that there is actual apprehension and potential danger that if the defendant succeeds in his nefarious plans to pass off his products under the trademark "LEMON" as those of the Plaintiff, there is every likelihood of mass level deception, cheating and fraud which may be played upon the customers and the Plaintiff, besides damaging the prospects of further growth and expansion of the Plaintiff's business as the Plaintiff have plans to enter into other allied and cognate business activities.

26. xxxx xxxxx xxxx

27. The acts of the Defendant has caused unfair and irreparable loss, injury and damage to the Plaintiff as it has resulted in dilution of the brand/Trade Mark as well as goodwill and reputation of the Plaintiff's business and violation of common law rights. The Defendant's threatened use would cause irreparable harm to the Plaintiff's reputation and name by poaching the customer base of the Plaintiff resulting in deceiving the purchasing public and the trade."

It is evident from above that the present suit is in the nature of a

quia timet action which aims to nip the evil in the bud and is resorted to

when there is an apprehension of threat of infringement or passing off. The

plaintiff has the right to file a suit in the said circumstances as he cannot be

allowed to actually be aggrieved and then approach the court for relief and

if that is allowed to happen, the purpose of a qua timet action will be

defeated.

7. However, without disputing the right of the plaintiff to approach

this Court, the plaintiff cannot sustain the present suit after the categorical

stand taken by the defendant that he is not going to use the said tradename

till the time his application is not decided by the Registrar of Trademark. It

is quite apparent from the stand taken by the defendant in the written

statement and as recorded by this Court in the order dated 18th January,

2011 and 2nd March, 2012 that the defendant has yet to launch its products

of mobile phone and mobile accessories etc under the said tradename

„LEMON‟. In fact the defendant is waiting for the registration of the said

trademark „LEMON‟ in its favour and till such registration is granted by the

Registrar of the Trademarks after having considered the opposition of the

plaintiff, the defendant has categorically taken a stand that it will not use