Smithkline Beecham Plc. & Anr. vs Sunil Sarmalkar & Ors.
2012 Latest Caselaw 5985 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI


+                           CS(OS) No.1181/2003


%                                                   5th October, 2012

         SMITHKLINE BEECHAM PLC. & ANR.          ...... Plaintiffs
                      Through: Mr. Saif Khan and
                               Mr. Raunaq Kamath, Advs.



                            VERSUS



         SUNIL SARMALKAR & ORS.                          ...... Defendants
                     Through:



CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?   Yes.


VALMIKI J. MEHTA, J (ORAL)



1.             The subject suit has been filed by the plaintiffs seeking the

reliefs of injunction, rendition of accounts, etc. with respect to two trade

marks namely PARAMAX and PANAMAX which are stated to be used by
CS(OS) No.1181/2003                                         Page 1 of 14
 the plaintiffs for paracetamol tablets. The defendants are stated to be using

the mark „Effer-PARAMAX‟ for dissolvable paracetamol tablets.


2.           The suit so far as the reliefs qua the trade mark PANAMAX is

concerned is based on the registration of the trade mark in India. The

registration certificate has been filed and proved on record as Ex.PW1/2. So

far as the relief qua the trade mark PARAMAX is concerned, the suit is

based on the ground of passing off inasmuch as there is no registration of the

said trade mark in India.


3.           Defendants initially appeared and filed a joint written

statement. They thereafter stopped appearing and were proceeded exparte.

The defendants were restrained by the exparte order dated 28.5.2003 from

manufacturing and selling paracetamol tablets under the trademarks of the

plaintiffs and which order has been confirmed. The defendants it appears

have thus stopped manufacturing and selling and may be therefore not

interested in contesting the suit.


4.           The following issues were framed in this case on 02.02.2006:


      "(i)   Whether the plaintiff is prior adopted user and registered
             owner of the trademark „Panamax‟and „Paramax‟? OPP
CS(OS) No.1181/2003                                         Page 2 of 14
       (ii)    Whether the plaintiff is the copyright owner for the Swirl
              device adopted for „Crocin‟ tablets and syrup? OPP
      (iii)   Whether by adoption of trade mark „Paramax‟ in respect of
              identical goods by the defendants amounts to infringement
              of plaintiff‟s mark „Panamax‟? OPP
      (iv)    Whether the defendants have infringed the copyright of
              plaintiff by substantially reproducing the „Swirl device of
              the plaintiff? OPP
      (v)     Whether the defendant is honest user of trade mark "Effer
              Paramax‟? OPD
      (vi)    Whether this court has no territorial jurisdiction? OPD
      (vii) Whether the plaint is not properly instituted, signed and
            verified by the authorized person? OPD
      (viii) Whether the present suit is liable to the dismissed for no
             cause of action? OPD
      (ix)    Whether the present suit is liable to be dismissed for non-
              joinder/misjoinder of parties? OPD
      (x)     Whether the defendants have passed off their goods as that
              of the plaintiff? OPP
      (xi)    Whether plaintiff is entitled to any relief as prayed in
              paragraph 25 of the plaint? OPP
      (xii) Relief."
5.            It is settled law that in order to establish the entitlement of a

person to the reliefs of infringement or passing off, it is necessary that

although the defendants are exparte plaintiffs must also prove their case. It

has been held by the Supreme Court in the case of Balraj Taneja & Anr. vs.

CS(OS) No.1181/2003                                          Page 3 of 14
 Sunil Madan, 1999 (8) SCC 396 that even where there is no defence of a

defendant, and the facts as stated in the plaint are such that the same required

to be proved, the plaintiff is not automatically entitled to a judgment unless

the plaintiff proves his/its case. Paras 42 and 45 of the said judgment are

relevant and are reproduced below:-


             "42. Judgment" as defined in Section 2(9) of the CPC
             means the statement given by the Judge of the grounds for a
             decree or order. What a judgment should contain is indicated
             in Order 20, Rule 4(2) which says that a judgment:

             "shall contain a concise statement of the case, the points for
             determination, the decision thereon and the reasons for such
             decision.

             It should be a self-contained document from which it should
             appear as to what were the facts of the case and what was
             the controversy which was tried to be settled by the Court
             and in what manner. The process of reasoning by which
             the Court came to the ultimate conclusion and decreed
             the suit should be reflected clearly in the judgment.

             45. Learned Counsel for respondent No. 1 contended that the

provisions of Order 20, Rule 1(2) would apply only to contested cases as it is only in those cases that "the points for determination" as mentioned in this Rule will have to be indicated, and not in a case in which the Written Statement has not been filed by the defendants and the facts set out in the plaint are deemed to have been admitted. We do not agree. Whether it is a case which is contested by the defendants by filing a Written Statement, or a case which proceeds ex-parte and is ultimately decided as an ex-

parte case, or is a case in which the Written Statement is not filed and the case is decided under Order 8 Rule 10, the Court has to write a judgment which must be in conformity with the provisions of the Code or at least set out the reasoning by which the controversy is resolved."

6. Let me now examine whether the plaintiffs have proved their

case for entitlement of the reliefs individually qua the trade marks

PANAMAX and PARAMAX. Let me first take the case so far as the trade

mark PANAMAX is concerned.

7. So far as the fact that the trade mark PANAMAX is registered

in favour of the plaintiffs is concerned, the same cannot be disputed,

however mere registration of a trade mark cannot confer a right unless goods

have been sold under the said trade mark. The entire issue of distinctiveness

qua the trade mark is necessarily with reference to sales made under a trade

mark. If there are no sales there cannot be distinctiveness. A Division

Bench of this Court in the judgment reported as Fedders Lloyd Corporation

Ltd. & Anr. Vs. Fedders Corporation & Anr., 119 (2005) DLT 410 has

observed in para 23 as under:-

"23. Though the object of the Trade Marks Act is to protect the proprietary rights of a registered trademark holder, at

the same time the object is not to facilitate any monopoly of such registered trade mark holder, despite non use of the trademark by him as contemplated by the Act. A trademark has no meaning, even if it is registered, unless it is used in relation to goods and/or services. A Trademark which drops out of the use, dies when there are no goods offered for sale as there is no use of the trademark. The mark can lose its distinctiveness by non use, where non use is on the part of registered trade mark holder but not on account of external factors beyond the control of such registered trade mark holder." (underlining added)

8. A reading of the aforesaid paragraph makes it more than clear

that though the object of the Trade Marks Act is to protect the proprietary

rights of a registered trade mark holder, at the same time the object is not to

facilitate any monopoly of such trade mark holder despite non-use of the

trade mark by him. The Division Bench has clearly said that the trade mark

has no meaning, even if it is registered, unless it is used in relation to goods

and/or services. The Division Bench has further observed that the trade

mark which drops out of the use, dies when there are no goods which are

offered for sale as there is no use of the trade mark. Finally, the Division

Bench observed that a mark looses its distinctiveness by non-use.

9. Another Division Bench judgment of this Court in the case of

Virumal Praveen Kumar vs. Needle Industries (India) Ltd. & Anr., 2001

(93) DLT 600 has made similar observations in paras 24, 26 and 29 and

which read as under:

"24. In view of the aforesaid factual position what has to be considered is whether the factum of the registration of the trademark in the name of appellant is sufficient to grant relief in favor of the respondents or whether something more is required. This has to be considered in view of the submission of learned counsel for the appellant that the trademark cannot exist in vacuum and in view of their being a non-user of trademark since 1981, the respondents are not entitled to any protection.

26. Though delay be itself would not be a defense but if there was a non-user for a long period of time the mark would lose its distinctiveness or the mark is then permitted to die for non-user. The Bombay High Court observed "It is well settled that lapse of time may bring about a change in the state of things in such a manner that to grant injunction in favor of the plaintiff's would be harsh and it may cause irreparable damage or harm to the rights of the defendants." Thus the Bombay High Court was of the view that non-use of trademark does have a bearing in action for infringement specially at the interlocutory stage and equities would have to be balanced in such a situation. The Bombay High Court had further laid down certain principles in this behalf which have been reproduced in the impugned judgment. In point

(f) of the order dated 28th March, 2000 it is stated that the object of the Act is to protect the right and not be a source of monopoly. In point (j) it has been observed that a mark can lose its distinctiveness by non-user. Thus the enforcement of the right of exclusive use of a trade mark will depend on continuous use of the mark by the proprietor. In point (k) it has been observed that the court shall not protect the right of

proprietor unless there is sale of the articles to which trade mark is attached or related.

29. We are in agreement with the view of the learned Single Judge of the Bombay High Court that if there is non-user for a long period of time then by mere registration of the mark continuing the respondents would not be entitled to any injunction. this view is further reinforced by the judgment in Imperial Group's case (supra) wherein it was held that where there is no trading to give rise to a goodwill there is no interest to be protected by a trademark and such a trademark cannot exist in vacuum." (underlining added)

10. In the above case, counsel for the plaintiffs states that no

documents whatsoever have been filed and proved with respect to sale of the

paracetamol tablets by the plaintiff no.1 in India under the trade mark

PANAMAX. Therefore, once there are no sales of the goods under the trade

mark PANAMAX, it cannot be said that the plaintiffs have proved their

distinctiveness qua the trade mark PANAMAX. The object of the trade

mark law is that a person should not be allowed to squat on a trade mark,

without actually using the same. Since there is no proof whatsoever filed by

the plaintiffs of actual user of the trade mark PANAMAX in India, i.e since

it is not shown that sales have been made under the trade mark PANAMAX

in India, the plaintiffs are not entitled to reliefs as prayed. Once there are no

sales, the plaintiffs are not entitled to any relief although the trade mark is

registered, in view of the observations of the Division Bench in the cases of

Fedders Lloyd Corporation Ltd. (supra) and Virumal Praveen Kumar

(supra).

11. So far as the alternative case of passing off with respect to the

trade mark PANAMAX is concerned, even that right with respect to passing

off has to be established by prior use of the trade mark PANAMAX by the

plaintiffs as compared to the defendants. Actual use, as already stated

above, is only by showing sales in the market. Sales admittedly have not

been proved and established on record. A self-serving statement in an

affidavit by way of evidence cannot be a substitute for actual discharge of

onus of proof which is required to be done by leading credible evidence and

which surely could have been done in this case inasmuch as if the plaintiff

no.1 has huge sales it was not difficult at all for the plaintiff no. 1 to prove

the sales of the paracetamol tablets under the trade mark PANAMAX.

12. I therefore hold that the plaintiffs have miserably failed to prove

their case either with respect to infringement or passing off with respect to

the trade mark PANAMAX.

13. So far as the trade mark PARAMAX is concerned, admittedly,

the suit is only a suit for passing off and not for infringement, inasmuch as,

so far as India is concerned, neither of the plaintiffs has any registration of

the said trade mark PARAMAX in India. The plaintiffs only have set up a

case of transborder reputation on the basis of sale of the paracetamol tablets

under the trade mark PARAMAX in countries abroad such as U.K., New

Zealand, Bangladesh. Once again, a mere self-serving averment is not

discharge of onus of proof. A self-serving statement in an affidavit by way

of evidence cannot be the discharge of proof with respect to a vital issue of

transborder reputation. Transborder reputation or spill over reputation has

two elements, one of actual sales abroad prior to the use of the trade mark by

the defendants and secondly of the fact that there is a spill over reputation of

such marks in India. Both these aspects have to be established to the

satisfaction of the Court. This surely could have been very easily

established by the plaintiffs by filing the documents of the sales abroad, and

to show how knowledge of the sales of the paracetamol tablets under the

trade mark PARAMAX also exists in India. The plaintiffs having failed to

file any documents whatsoever, the plaintiffs have failed to discharge their

onus of proof.

14. No doubt, in terms of the various provisions of the Trade Marks

Act, the plaintiffs will have a right to file a suit for infringement, however,

filing a suit and proving of a case are two totally different aspects. Mere

self-serving averments in the pleadings and thereafter in the affidavit by way

of evidence, in cases such as the present, cannot without credible evidence

lead to discharge of onus of proof which was upon the plaintiffs.

15. Learned counsel for the plaintiffs has placed reliance upon two

judgments of the Supreme Court, first in the case of Cadila Health Care

Ltd. vs. Cadila Pharmaceuticals Ltd., AIR 2001 SC 1952 and second in the

case of N.R.Dongre vs. Whirlpool Corporation, 1996 PTC (16). These

judgments have been relied upon in support of the proposition of the

entitlement to the relief of infringement on the ground of registration and the

entitlement to the relief on the ground of passing off on the basis of prior

use. All I have to say is that propositions of laws stated in these judgments

cannot be disputed, however, to apply the law, it is necessary that the

plaintiff at the stage of final arguments has proved the case as stated in the

plaint. If the plaintiff fails to prove the case, I fail to understand that how

reference to the judgments stating a legal position can in any manner help

the plaintiffs.

Issue nos.1, 3, 8 & 10

16. In view of the aforesaid discussion, issue nos. 1, 3, 8 and 10 are

decided against the plaintiffs and it is held that the plaintiffs have no right to

seek the reliefs of infringement and passing off with respect to the trade

marks PANAMAX and PARAMAX.

17. So far as the issue nos. 5, 6, 7 and 9 are concerned, the same are

decided in favour of the plaintiffs and against the defendants inasmuch as

onus of proof of these issues was on the defendants who have failed to

appear and lead evidence. These issues are therefore decided in favour of the

plaintiffs.

Issue nos.2 & 4

18. So far as the issue nos. 2 and 4 are concerned, the same pertain

to the claim of the plaintiffs with respect to a swirl device i.e. an elliptical

sign put on the packets of the plaintiffs. A copyright is granted with respect

to an original work in terms of Section 13(1)(a) of the Copyright Act, 1957.

In the present case the stand of the plaintiffs with respect to copyright is a

copyright in an artistic work. A swirl device in my opinion cannot be said to

be such an original artistic work that copyright in the same should subsist.

An elliptical design or swirl pattern at best would be for distinguishing

goods of the plaintiffs from those of others, and in fact normally would be

treated as necessary to decide the issue of passing off in the facts of a

particular case. The object of granting of copyright under the Copyright Act

is only if there exists original literary, artistic, musical, and

cinematographical work. Copyright claim in certain patterns or designs or

shapes etc which are well known are really in the nature of a trade mark used

with respect to goods and not with respect to an issue of originality in a work

for granting of copyright in the same unless the same is really an original

work entitling grant of copyright. Since in the present case as already stated

above plaintiffs have miserably failed to prove their case of sales even this

relief based on copyright claim cannot be granted to the plaintiffs, assuming

the issue is taken only from the standpoint of passing off and not from the

point of copyright.

Issue nos. 11 and 12(relief)

19. In view of the aforesaid discussion, plaintiffs have failed to

prove their case. Plaintiffs will therefore not be entitled to the relief of

injunction or rendition of accounts or other reliefs as claimed in the plaint.

20. The suit is accordingly dismissed, leaving the parties to bear

their own costs.

VALMIKI J. MEHTA, J OCTOBER 05, 2012 ak