Toni & Guy Products Ltd & Anr vs Shyam Sunder Nagpal
2013 Latest Caselaw 5391 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI


+       IA Nos.16394/2012 (O.VII R.11 CPC), 17475/2012 (O.VII R.10
        CPC), 17476/2012 (O.35 R.1 CPC) & 13393/2012 (O.39 R.1 & 2
        CPC) in CS(OS) No. 2224/2012
%                                                          Reserved on: 10th September, 2013
                                                           Decided on: 22nd November, 2013

        TONI & GUY PRODUCTS LTD & ANR           ..... Plaintiffs
                      Through: Mr. Sanjeev Sindhwani, Sr. Advocate
                               with Mr. Manav Kumar, Advocate.

                  versus
    SHYAM SUNDER NAGPAL                     ..... Defendant
                  Through: Mr. Mohan Vidhani and Mr. Arun
                           Jain, Advocates.
Coram:
HON'BLE MS. JUSTICE MUKTA GUPTA
1.

Before adverting to these individual applications it would be appropriate to set the facts which would be common to all the applications and then decide the same in the seriatim noted above.

2. As per the plaint, plaintiff No.1 is a private limited company incorporated under the laws of England engaged in manufacturing and marketing of hair care products under the mark TONI & GUY. The plaintiff No.2 is also a private limited company incorporated under the laws of England and manufacturers, operates saloons and provides other related service under the mark TONI & GUY. The plaintiffs have entered into a cooperation with each other in protecting TONI & GUY mark. The plaintiffs claim that though they had a humble beginning in 1960, however with their hard work they have built a multi-billion company with business

under the brand TONI & GUY. The present suit pertains to the plaintiffs' mark TONI & GUY and the violation thereof by the defendant by adopting a deceptively similar mark TONY & GIRL in respect of cosmetic and hair care products falling in class 3. The mark TONI & GUY was coined and adopted by the predecessor of plaintiff No.2 namely Mascolo PLC in relation to their business of running saloons in United Kingdom in the year 1963. By passage of time the mark TONI & GUY in Class 3 has been assigned in the name of plaintiffs' company and the plaintiffs are continuously and extensively using the mark TONI & GUY in relation to its products and business. Plaintiffs have placed on record, copy of the documents evidencing the assignment of mark TONI & GUY in Class 3 in favour of plaintiff No.1. Plaintiff No.2 through franchisees and joint venture partners runs 400 saloons worldwide under the name TONI & GUY and on an average 60,000-80,000 clients visit these saloons in a week. By way of extensive promotion and recognition of the plaintiffs' brand TONI & GUY, the same is inextricably associated with the plaintiffs companies. TONI & GUY is the only hair dressing brand that has been awarded SUPER BRAND status and has acquired a global recognition. In India, plaintiff No.2 obtained registration of the mark TONI & GUY under No. 1237835 in Class 41 in respect of instruction and training in the field of hairdressing and administration educational services relating to hair and hairdressing, organization and holding of conference and exhibitions relating to hair and hairdressing, demonstrations of hair arrangement and hairdressing production and organization of shows and films and further under No. 1237836 in class 42 in respect of hairdressing services, hairdressing saloon services, beauty saloon services, consultancy etc. relating to hair and

hairdressing apparatus and equipments for beauty saloons and hairdressing saloons etc. Plaintiffs have placed a list of awards granted to the plaintiffs in respect of its products and business. Plaintiff No.2 formally started its first saloon in India in January 2007 and launched its product under the name TONI & GUY as well at the same time. Plaintiff No.1 has spent millions of rupees to popularize its TONI & GUY products in India. Between January 2010 and February 2012 plaintiffs' website received 40,000 visitors from India alone. Thus, the trademark of the plaintiffs' companies has earned significant goodwill and reputation among members of the trade and public who associate the mark TONI & GUY to the plaintiffs and none else. Plaintiff No.1 has valid and subsisting trademark registrations for the mark TONI & GUY worldwide in a number of countries. Plaintiff No.1 has also filed an application for registration of trademark TONI & GUY being application No. 1115300 dated 28th June, 2002 in Class 3 in respect of perfumes, perfume products, essential oils, soaps, cosmetics, eye shadows, lipsticks, skin cleansing products, etc.

3. It is alleged that the defendant is trading under the name and style of SK cosmetics and is controlled by a partnership firm of Nagpal family. The defendant is manufacturing and marketing bleaching preparations, perfumery, cosmetics, creams, hair remover etc. under the mark TONI. In March, 2012 the plaintiffs came across the defendant's mark TONI & GIRL in class 3. It is stated that the defendant has mischievously obtained the said registration. The application by the defendant was filed on 27 th July, 2009 much after the plaintiffs' use and adoption. The defendant had filed a suit for permanent injunction against the plaintiffs in the District Court of Delhi

being suit No. CS No. 1777/2007 on the basis of its right in the mark TONI and contended that TONI & GUY was similar and deceptive to the mark TONI of the defendant. The said suit is still pending and the plaintiffs are contesting the suit. The defendant has also filed an opposition to the plaintiffs' application for registration of the mark TONI & GUY and the same is pending before the Trade Mark Registry. Copies of the plaint, written statement and replication filed in the said suit pending before the District Court have been filed, and thus on the strength of these averments and documents the plaintiffs inter alia seek a decree of permanent injunction restraining the defendant, their directors, principal officers, its agents etc. from manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in perfumes, perfume products, essential oils, soaps, cosmetics, eye shadows, lipsticsks etc. under the trademark TONI & GUY or any other mark similar to the trademark TONI & GUY of the plaintiff or doing any other things so as to cause confusion or deception amounting to passing off the goods and business of the defendants as that of the plaintiffs and damages.

4. In the written statement besides preliminary objections taken, it is stated that the defendant is holding various registration in the marks TONI, TONI & LOVELY, TONI MARKS ERASER, TONI DASHING POWDER, TONI CREAM FOR FAIRNESS HI HANDSOME, TONI & GIRL and TONI DASHING & HAND-SOME in Class 3. The defendant is also holding the registration of copyrights in TONI, TONI TALCUM POWDER and TONI & LOVELY which fact is duly known to the plaintiffs. The defendant has filed opposition against the registration of the trademark TONI

& GUY to the plaintiffs which application is pending. The defendant has also filed further applications for registration of the mark consisting of TONI namely TONI & LOVELY in Class 26 and 21 and TONI in Class 3. The case of the plaintiffs themselves is that the goods of the defendant are not available in the market and thus the defendant has not used the trademark TONI & GIRL. Therefore, no suit for passing off lies against the defendant. Merely getting registration by the defendant cannot give the plaintiffs, the cause of action alleging passing off and thus the present suit is liable to be rejected. The present suit has been filed merely as a counter-blast to the pending suit filed by the defendant. The defendant has been using the impugned mark for several years and even has the registration thereof in his name. The defendant has every right to use mark TONI & GIRL as the mark TONI is the registered mark of the defendant under various classes and has various pending applications. The word GUY in the alleged mark of TONI & GUY of the plaintiffs' does not represent a male person but is claimed to have been derived from the name of GUY BRUNO as claimed by the plaintiffs in its written statement filed in the District Court. However, the word GIRL in the defendant's mark TONI & GIRL represents a female. In any case there is a difference between the word GUY and the word GIRL, as they relate to different genders. These being the facts in nutshell on behalf of both the parties, I would now advert to the applications filed by the parties.

I.A No. 16394/2012 (by defendant u/O VII R 11 CPC)

5. The contention of learned counsel for the defendant for the said application is that no cause of action arises in favour of the plaintiffs as per

the averments made in the plaint itself, because the defendant has still not used the mark and the plaintiffs have not filed the packaging of the defendant. Mere filing of an application cannot be regarded as a cause of action for filing a suit for passing off. Reliance is placed on K. Narayanan and Anr. Vs. S. Murli 2008 (38) PTC 22 (SC); JSR Enterprises Vs. Groversons 2012 (50) PTC 199 (Del); Sun Pharmaceutical Industries Ltd. Vs. Emcure Pharmaceuticals Ltd. 2012 (49) PTC 243 (Bom). Referring to Asia pacific Breweries Ltd. Vs. Superior Industries Ltd. 2006 (32) PTC 275 (Del) it is contended that unless the two competing labels are made available for comparison, it is not possible to return finding of infringement and passing off. Thus, the plaintiff having made out no cause of action in the plaint, the same is liable to be rejected.

6. For deciding an application under Order VII Rule 11 CPC only the averments in the plaint and the documents filed by the plaintiff are to be looked into believing them to be correct and on the basis of the same discerning whether any cause of action exists in favour of the person suing. In the present case the plaint alleges that the defendants have deliberately violated the plaintiffs' right in the mark TONI & GUY and therefore there is a cause of action in favour of the plaintiff and against the defendant. The contention of the defendant that mere registration of the mark TONI & GIRL without any goods being sold there under, does not give any cause of action to the plaintiff is wholly incorrect. The relief of passing off can be based even on an apprehension of threat of the defendant's proposed launch of their products as a Quia timet action. The defendant was fully aware of the plaintiffs' trademark TONI & GUY as he has filed a prior suit against the

plaintiffs in regard to infringement of their trademark TONI by the plaintiffs by using the trademark TONI & GUY.

7. The issue of Quia timet came up for consideration before this Court in Mars Incorporated (supra) wherein it was held:

"1. This is a Quia Timet suit i.e. action against apprehended or threatened invasion.

2. The plaintiff is the proprietor of the Trademark 'MARS'. The said trademark is registered in India and in as many as 170 countries. It is used in respect of chocolates, confectionery, preserved food products and other foodstuffs in India wherein in other countries it is used in respect of snack foods, main meal foods, pet care, electronics and drinks. The plaintiff came into action when it found that defendant had incorporated a Company under the name and style of Mars Food Pvt. Ltd. According to the plaintiff, the object clause of the Company projects the intention to conduct a business in the food sector namely bakery and food items, canned and tinned foods, ready to eat foods, machinery for food processing and food manufacturing and packing. Admittedly the defendant has neither commenced the manufacturing nor commenced the sale of goods.

15. Now the question arises whether incorporation of word 'MARS' by the defendant company with the objective to launch food items and confectionery goods or adopting the word 'MARS' in its Corporate name has rendered the defendant liable for Quia Timet Action or not.

16. Quia Timet is actually a Latin word which means "because he fears or apprehends". In legal terminology it has been defined in Osborne's Concise Law Dictionary (London: Sweet and Maxwell, 8th edn. 1993, Bone and Rutherford) as an action by which a person may obtain an injunction to prevent or restrain some threatened act being done which, if done, would cause him substantial damage, and for which money would be no adequate or sufficient remedy.

17. I am of the view that as in the case of infringement of registered trade mark or passing off action, the intention and object of infringer is mainly to trade or cash upon widespread and invaluable goodwill

and reputation established over the years at huge cost by the plaintiff and in the process there occurs a dilution of the trade mark if goods manufactured and sold by infringer happen to be of poor quality, the underline intention of a person who proposes to adopt either same or deceptively or confusingly similar trade mark or even the Corporate name is to encash and become unjustly rich by trading upon the goodwill and reputation of the plaintiff.

18. Defendants have either the intention of entering into the business of food stuff or to board infringed Corporate name so as to encash it in future by selling or offering to sell at a premium either to the plaintiff or other willing purchaser. This is no firstly because the trade mark MARS has been used in conjunction with the food items and secondly that they have not complied with the requirements of Companies Act, 1956 of having a name board with the corporate name and registered office address at the Registered Office and also by filing annual returns etc.

19. Be that as it may, a party who is under threat of infringement or passing off of its trade name cannot be left remediless or in lurch merely for the reasons that the said treated have not materialised causing damage or loss either in trade or reputation or goodwill whether a party is entitled to injunction to restrain the threatened infringement upon its trade name, there have been varying views. One view is that injunctive relief may be obtained even before defendant actually opens for business, if the threatened act of defendant is imminent and impending as one does not have to await consummation of the threatened injury to obtain preventive relief (Cleveland Opera Co.V. Cleveland Civic Opera Ass'n, 22 OA.400, 5 OL.297. Other view is that before injunction may properly be issued the complaining party must show infringement of its trade mark rights as the right of a proprietor of registered trade mark to protect its mark is confined or limited to the goods specified in registration certificate. According to this view, unless and until the actual damage has been caused or there is likelihood of damage because of confusion or mistake as to the source or origin of the goods on account of deceptively similar mark.

20. In my view if the second view is allowed to prevail then it will be free for all to usurp, and board anybody's trade name and

damage, dilute or dwindle down the strength of the trade mark which has been in prior, long and continuous use and acquired enviable reputation and goodwill without actually opening the business even if the possibility or likelihood of the opening the business may be neither imminent nor impending.

21. To expect the aggrieved party to wait and watch for the opening of business or manufacturing or sale or 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. With the onset of information technology in modern times, registration of a website which is popularly knows as domain name, a party owning a website has a right to protect the same if any person registers the website with a name which is inherently deceptive. In such cases either party is directed to change the name of the site or handover to its owner. On the same pattern and pedestal is the threatened or apprehended invasion of the trade mark or Corporate name.

22. There are two interesting cases on the Quia Timet Action. First is the Direct Line Group Ltd. and Ors. v. Direct Line Estate Agency Ltd. and Ors., Chancery Division 374. In this case The plaintiffs were all members of a group of Companies of which Direct Line Insurance plc was the best known. They brought an action for passing off and trade mark infringement against two individuals who had formed three companies-Direct Line Estate Agency Ltd., Direct Line Will's Ltd. and Direct Line Estate Ltd. and against those Companies, the plaintiffs sought interlocutory relief and alleged that the individual defendants had a track record of taking or being associated with the taking of famous name trade marks belonging to third parties either for the purpose of siphoning off the goodwill belonging to other traders or for the purpose of offering the marks back to their original proprietors for profit.

23. As against this, the defendants took the plea that they have not traded as yet though one of them was trading as Direct Line Estates Limited. The Judged viewed the defense of the defendants in the light of their track record and showed his displeasure by observing "any attempt by traders to embark upon the same trade mark is designed to make illegitimate use of other Companies's trade mark".

24. Injunctive relief was granted by observing that "there will be no great hardship suffered by the defendants if an injunction is granted against them. On the other hand, it seems to me that the illegitimate use by the defendants of a name which will be associated with the plaintiff's business might well cause significant damage to the plaintiffs pending if such a trial takes place".

25. Another case is very well known case of Marks & Spencer reported as Marks & Spencer Plc. v. One in a Million Ltd. and Ors. (1998) FSR 265. It was a case of domain names. The defendants registered a large number of Interest domain names including names comprising the names or trade marks of well known commercial or other enterprises without their consent. Though they admitted that all were either actually or potentially available for sale none were in use as active sites. The plaintiff sought injunction on the ground that registration of such domain names amounted to the creation of instruments of deception and constituted actual or threatened passing of and trade mark infringement. Again defendants had a dubious past history of deliberate practice followed over a substantial period of time of registering domain names which were chosen to resemble the names and marks of other people and were plainly intended to deceive. In view of threat of passing off and trade mark infringement and the likelihood of confusion arising from the infringement of the mark culminated in grant of injunction by way of Quia Timet Action.

26. 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.

27. 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 the 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 and exploit the goodwill, reputation, name and trade mark of the plaintiff. The threat becomes imminent if there is indication in the objects of the memorandum filed at the time of incorporation by the defendant that it will start manufacture and sell the goods under the said trade mark in near future. It is immaterial whether or not there is a real or tangible possibility of starting a business. Such a threat will ever 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 malafide and calculated to deceive the public or would be purchasers as to the connection of the defendants with the plaintiff.

28. As the saying goes, the evil should be nipped in the bud so is the nature of Quia Timet Action where the injury is apprehended and the invasion is threatened though no actual injury or damage has been caused."

8. Thus, the plaintiff is entitled to seek injunction from an apprehended action of the defendant and hence the present suit is not liable to be rejected for want of cause of action. Application is accordingly dismissed.

IA No. 17475/2012 (u/O VII R 10 CPC)

9. By this application the defendant prays for the return of the plaint on the ground that this Court has no pecuniary jurisdiction to entertain and try this suit.

10. It is contended by the learned counsel for the defendant that the reliefs of injunction and delivery up are valued at Rs. 200 each whereas the relief of damages is valued at Rs. 20 lakhs. The defendant has not used the mark. There cannot be any damages caused to the plaintiff. As the relief of damages cannot be granted, the only relief surviving in the present plaint is of injunction and delivery up which has been valued at Rs. 200/- each and thus the present suit is not within the pecuniary jurisdiction of this Court to entertain and try the same. In any case, once the mark of the defendant is registered, the only remedy available with the plaintiff is of filing a cancellation petition before the Trade Marks Authority which remedy has been availed by the plaintiff. Further mere filing of the application or registration of the mark cannot give the right to sue and particularly for damages. Reliance is placed on Archie Comic Publications Inc. Vs. Purple Creations Pvt. Ltd. & Ors. 2008 (37) PTC 279 (Del) and The Indian Performing Right Society Ltd. and Anr.Vs. Mr. R.K. Suresh and Ors. CS(OS) No.(OS) 449/2009 decided by this Court on 6th march, 2009. Relying upon KRBL Ltd. Vs. Ramesh Bansal & Anr. 2009 (41) PTC 114 (Del) it is further contended that there is no question of damages in a suit for Quia timet action.

11. Learned counsel for the plaintiff on the other hand contends that the plaintiffs are entitled to claim the relief of passing off and damages on an apprehension of threat of the defendant's proposed launch of his products under the mark TONI & GIRL as the action is a quia timet action. Reliance is placed on KRBL Ltd. Vs. Ramesh Bansal & Anr. 2009 (41) PTC 114 (Del); Mars Incorporated Vs. Kumar Krishna Mukherjee & Ors. 2003 (26)

PTC 60 (DEL) and Simla Chemicals Pvt. Ltd. Vs. Sun Soap Industries & Ors. 2012 (51) PTC 570 (DEL). There is no bar of law for claiming damages in a suit for injunction. Rather the law permits joining of cause of action under Order II Rule 3 CPC.

12. I have heard learned counsels for the parties. Indubitably even for an apprehended action, the plaintiff is entitled to seek relief by filing a quia timet suit. However, the issue which arises for consideration in this application is not whether the plaintiff would be entitled to an injunction but whether whether the plaintiff would be entitled to damages for quia timet action. Quia timet is actually a Latin word which means "because he fears or apprehends". Thus for an apprehended action of invasion to the right of the plaintiff, the plaintiff would be entitled to file a suit seeking injunction. However, when admittedly the defendant has not used the mark and has not invaded the proprietary rights of the plaintiffs in the trademark by either infringing the same or passing off, the plaintiffs cannot lay an action for damages as neither the invaluable goodwill or reputation of the plaintiffs is lost nor the infringer has passed off his goods as that of the plaintiffs nor has any action taken place by which the defendant has become unjustly rich by trading upon the goodwill and reputation of the plaintiffs. A claim for damages would not be maintainable in a quia timet suit is the consistent view of this Court as held in The Indian Performing Right Society Ltd. and another v. Mr. R.K. Suresh and others (CS(OS) No.449/2009 decided by this Court on 6th March, 2009), KRBL Ltd. v. Ramesh Bansal & another, 2009 (41) PTC 114 (Del.), South African Breweries International (Finance) B.V. and another v. Mohan Goldwater Breweries Ltd. & another, 184(2011) DLT

252, L'oreal (M/S) v. Mr. Dushyant Shah, 2011 VIII AD (Delhi) 630 and Foodworld v. Foodworld Hospitality Pvt. Ltd., 2010 (42) PTC 108 (Del.). Since as per their own admission, the plaintiffs' case is that the defendant has not used the trademark TONY & GIRL, the plaintiffs are not entitled to claim damages. Thus, this Court would not have pecuniary jurisdiction to entertain the present suit as the plaintiffs have valued the relief of injunction and delivery up at Rs.200/- each and only the relief of damages is valued at Rs.20 lakhs. Consequently the plaint is liable to be returned for want of pecuniary jurisdiction. Ordered accordingly.

13. Application is disposed of.

IAs. 17476/2012 & 13393/2012

14. Since this Court is returning the plaint, these applications would be considered by the Court of competent jurisdiction.

CS(OS) No. 2224/2012

15. In view of IA No. 17475/2012 having been allowed, the plaint be returned to the plaintiffs for being filed before the court of competent pecuniary jurisdiction.

(MUKTA GUPTA) JUDGE NOVEMBER 21, 2013 'ga'