Rtc Restaurants (India) Limited vs Ruby Tuesday Inc And Anr
2014 Latest Caselaw 5030 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                     Pronounced on: 10th October, 2014
+       IA No.1047/2012 (O.XXXIX Rules 1 & 2 CPC) and
        IA No.7360/2012 (O.XXXIX Rules 1 & 2 CPC) in
        CS(OS) 137/2012

        RTC RESTAURANTS (INDIA) LIMITED               ..... Plaintiff
                    Through: Mr. Pravir K. Jain, Adv.

                                versus

        RUBY TUESDAY INC AND ANR                  ..... Defendants
                    Through: Mr. H.L. Tikku, Senior counsel with
                              Mr. P.N. Sewak, Adv. &
                              Ms. Shefali Sewak, Adv.
        CORAM:
        HON'BLE MR. JUSTICE G.P. MITTAL

1.      The competing claims of the parties have led to the filing of these

        applications.        In IA No.1047/2012, the Plaintiff seeks interim

        injunction, inter alia,:-

                "a. An order for temporary injunction restraining the
                Defendant/s, their servants, agents, dealers, distributors,
                stockiest, representatives, retailers and all other persons
                acting on their behalf from illegally making groundless
                threats to the applicant with respect to the alleged
                infringement of and/or passing off the trade mark of the
                Defendant/s:

                b.     An order for temporary injunction restraining the
                Defendant/s, their servants, agents, dealers, distributors,
                stockiest, representatives, retailers and all other persons
                acting on their behalf from causing an illegal
                interference in the course of normal business activities of
                the Applicant;

I.A.s No. 1047/2012 & 7360/2012 in CS (OS) No.137/2012               Page 1 of 19
                 c.      xxxxxxxxxxxxxx

                d.      xxxxxxxxxxxxxx"

2.      In IA No.7360/2012 filed by the Defendants, the interim injunction

        sought extracted from the prayer clause in para 40 of the application

        are as under:-

                "(a) The Respondent, its directors, managers,

employees, servants, agents and distributors be restrained by an order of interim injunction from infringing the Applicant No.2‟s trade mark RUBY TUESDAY, registered under numbers 1239953, 780189, 884247, 884256, 884253, 884249, 1239955, 884255 and 884250, by restraining them from using the name „Ruby‟s‟ as a part of the trade mark/trading style, Ruby‟s Bar & Grill, or any other trade mark deceptively similar thereto which infringes the Applicant No.2‟s said registered trade marks.

(b) The Respondent, its directors, managers, employees, servants, agents and distributors be restrained by an order of interim injunction from passing off their business and product by restraining them from offering goods and services under the impugned mark Ruby‟s Bar & Grill.

(c) The Respondent, its directors, managers, employees, servants, agents and distributors be restrained by an interim order directing the Respondent to hand over to the Applicants or their representatives all outdoor signages, nameplates, stocks of menu cards, paper napkins, take-away boxes, pamphlets, promotional materials and business cards bearing the mark Ruby‟s Bar & Grill, and to remove the impugned mark from the Respondent‟s website and the Ruby‟s Bar & Grill Facebook page.

(d) No such prayer is there.

(e) xxxxxxxxxxxxxxxx

(f) xxxxxxxxxxxxxxxxx"

3. Before coming to these applications, it will be appropriate to have an

insight into the pleadings of the parties to understand as to why these

applications have been filed.

4. Defendant no.1 Ruby Tuesday, Inc. is a company incorporated and

established in the year 1996 in the United State of America (USA) and

is claimed to be a world renowned proprietor of Restaurant and Bar

Services. Defendant no.1 devised and adopted the distinctive trade

and service mark „Ruby Tuesday‟ in respect of Restaurant and Bar

Services in USA in 1972 and the company was incorporated in USA

in the year 1996. Defendant no.2 RTBD, Inc. is its subsidiary

established and incorporated in USA in the year 2002.

5. The Plaintiff (formerly known as Round-The Clock Stores Limited) is

a company incorporated in India. The Plaintiff claims to be one of

India‟s most leading restaurant companies which has developed and is

operating more than thirty restaurants in various parts of India

including some leading international restaurant brands such as Sbarro

and HaagenDazs and numerous homegrown restaurant concepts such

as Mandarin Trail, The Cosmopolitan, Mandarin Express, Indian

Express, Indus Grill and Mircheez etc.

6. It is stated that over a period of last ten years, the Plaintiff has

acquired unmatchable reputation and huge goodwill associated to its

services.

7. The Plaintiff and Defendant no.1 entered into an „International

Development Agreement‟ on 31.08.1999 and several subsequent

„International Operating Agreements‟ including an Agreement dated

15.09.1999. In terms of the earlier said agreements, the Plaintiff ran

several restaurants with the name of „RUBY TUESDAY‟. The

relationship between the Plaintiff and Defendant no.1 came to an end

(after a period of over ten years for which the agreement was initially

envisaged), by a Mutual Separation Agreement, which was entered

into between the parties on 27.04.2011.

8. According to the Plaintiff by virtue of Separation Agreement „Post-

Term Obligations‟ as detailed under Section XVII of the International

Operating Agreement were waived off with full awareness and mutual

consent of both Plaintiff and Defendant no.1. The terms „De-Brand‟ in

the Separation Agreement are as under:-

" "Debrand" shall mean the removal of all Ruby Tuesday signage and logos from the restaurants and cessation of use of all Ruby Tuesday menus, uniforms and marketing materials as well. Both parties agree to waive off all Post-Term Obligations covered under

Section XVII in the International Operating Agreements and under Section IX in the International Development Agreement, with the only Post-Termination ongoing covenant being the covenant between the parties not to disparage each other."

9. According to the Plaintiff in terms of Separation Agreement, the Post-

Term Obligation were limited to non-use of any signage and logos of

Defendant no.1‟s mark „Ruby Tuesday‟. The Plaintiff was therefore,

free to use the word „RUBY‟ which is otherwise a generic word. The

Plaintiff, therefore, started a restaurant in the name and style of

„RUBY‟s BAR & GRILL‟ in August, 2011 and its outlets are spread

across NCR region, Chandigarh and Bangalore.

10. The Plaintiff also applied for registration of the trade mark „RUBY‟s

BAR & GRILL‟ in classes 29,30,31, 32, 33, 34 and 42 in India as per

the details mentioned in para 18 of the plaint.

11. It is the case of the Plaintiff that the trade marks RUBY, RUBY RED

Family Restro (with device), RUBY SEMIYA (device), RUBY TEA

(device), RED RUBY, etc. have been got registered by various

persons from time to time in India and abroad. Thus, there was

nothing unusual for the Plaintiff to have applied for registration of its

trade mark „RUBY‟s BAR & GRILL‟ in different shapes, designs for

various goods and services as earlier stated.

12. According to the Plaintiff on 15.12.2011, the Plaintiff received a letter

from Defendant no.2 purporting to be the lawful user and proprietor of

the trade mark „RUBY TUESDAY‟ for providing restaurant and bar

services in several countries including India. Defendant no.2

cautioned the Plaintiff against its use of name „RUBY‟s BAR &

GRILL‟ for its restaurant claiming to have proprietary rights in the

word „RUBY‟ and threatening the Plaintiff with legal consequences

unless it desist from using the mark „RUBY‟s BAR & GRILL‟.

13. It is the case of the Plaintiff that the Plaintiff‟s use of its mark

„RUBY‟s BAR & GRILL‟ does not amount to trade mark

infringement or passing off since Separation Agreement dated

27.04.2011 has categorically removed any restriction on the Plaintiff‟s

use of mark RUBY per se or in combination with any other word and

required only the removal of all Ruby Tuesday signage and logos from

the restaurants and cessation of use of all Ruby Tuesday menus,

uniforms and marketing material.

14. The Defendants have filed a counter claim-cum-written statement to

the suit of the Plaintiff.

15. The sum and substance of the defence and the counter claim set up by

the Defendants is that the Plaintiff claims to fame emanates from the

International Development Agreement dated 31.08.1999 and

International Operating Agreement dated 15.09.1999 between the

parties as the Plaintiff claims to have acquired the reputation only

during the last ten years whereas Agreement with the Defendants was

entered into as far back as in 1999, that is more than ten years before

the filing of the suit.

16. The Defendants have averred that if clause A, B and D of Section 17

of the Operating Agreement dated 15.09.1999 are read together, it

will clearly constitute a complete embargo against the Plaintiff from

using the trade and service mark „RUBY TUESDAY‟ or any

reproduction, counterfeit, copy or colourable imitation, including the

word/trade mark RUBY.

17. The Defendants have admitted that the parties had agreed to „waive

off‟ all Post-Term Obligations etc. with the only post-termination

ongoing covenant being that the parties would not „disparage one

another.‟ According to the Defendants that however, did not mean that

the Defendants had given up its proprietary rights in the trade mark

„RUBY TUESDAY‟ or any part therein. According to the

Defendants, the intention of the parties from the Separation

Agreement was clear to the effect that the Plaintiff was obligated to

altogether divest its rights of use of the trade mark RUBY or RUBY

TUESDAY or any deceptively similar word/trade mark within a time

bound frame in relation to its restaurant business.

18. According to the Defendants, Defendant no.1 have devised and

adopted distinctive trade and service mark comprising the word

„RUBY TUESDAY‟ in respect of restaurant and bar services in USA

in 1972. Since then, it has licensee rights for operation of „RUBY

TUESDAY‟ restaurant in over 25 countries under this trade name. In

India, the Defendants commenced use of this trade and service mark in

the year 2000.

19. According to the Defendants, Defendant no.1 was desirous of

launching restaurant and bar services in India in the trade and service

mark „RUBY TUESDAY‟ and therefore entered into various

agreements with the Plaintiff in the year 1999. Defendant no.2 got

registration of the mark „RUBY TUESDAY‟ in class 42, 29, 32, 16,

25, 30 and 33 since the year 1997 as detailed in para 47 of the counter

claim-cum-written statement.

20. It is the case of the Defendants that the Plaintiff‟s act of filing

application for registration of trade mark RUBY‟s BAR & GRILL in

relation to food and drink, alcoholic beverages vide applications as

mentioned in para 18 of the plaint is dishonest and mala fide as the

Plaintiff was well aware that it had no rights in the RUBY‟s in

congestion with the words BAR & GRILL. According to the

Defendants, the Plaintiff appears to have filed applications for

registration of the impugned mark after receiving Defendant no.2‟s

seize and desist notice.

21. The Defendants have given the generation of annual revenue and

expenses in paras 52 and 53 of the counter claim wherein it was

averred that the Defendants revenue in the year 2006-07

$1,410,227,000 rose to $1,265,162,000 in the year 2010-11 and

advertisement expenditure in the year 2006-07 $49,104,000 rose to

total $173,454,000 in the year 2010-11. It is averred that the Plaintiff

is operating at least five restaurants under the impugned mark at the

same location where they formerly operated restaurant as an

infringement of RUBY TUESDAY details whereof were mentioned in

para 60 of the counter claim. The Defendants, therefore, have sought

injunction which have been earlier extracted in para 2 of this order.

22. The crux of the Plaintiff‟s case is that RUBY is a generic word in

respect of which the Defendants cannot have any proprietary rights; in

terms of the Separation Agreement the post-time obligation were

limited to non-use of any signage and logos of the Defendants‟ mark

RUBY TUESDAY and that the Plaintiff is not using the mark RUBY

TUESDAY but RUBY‟s BAR & GRILL and that the Plaintiff has not

infringed the Defendants‟ trademark by using the mark RUBY‟s BAR

& GRILL in different shapes in respect of which various applications

have also been filed by the Plaintiff.

23. On the other hand, Mr. H.L. Tikku, learned Senior Counsel for the

Defendants have urged that the mark RUBY is not generic in relation

to restaurant; adoption of the mark RUBY‟s BAR & GRILL by the

Plaintiff is dishonest and mere addition of the word BAR & GRILL

will not allow the Plaintiff to infringe the Defendants mark

particularly in relation to the hospitality/restaurant services and more

particularly when the business is being carried out by the Plaintiff

from the same premises as was being carried out by it(the Plaintiff) as

a licensee of the Defendants.

24. As per the averments made in the plaint, the Plaintiff claims to have

acquired the unmatched reputation and usage goodwill associated to

the restaurant services during the last ten years. It is important to note

that several International Operating Agreements including the

agreement dated 15.09.1999 were entered into between the Plaintiff

and Defendant no.1. Thus, it is not in dispute that the Plaintiff earned

the reputation and goodwill when the Operating Agreements were

entered into between the parties and the Plaintiff started running

restaurant as a licensee with the name of RUBY TUESDAY.

25. As per the averments made in the plaint (para 19), the Plaintiff applied

for registration of the trade mark RUBY‟s BAR & GRILL sometime

in August, 2011 mostly in relation to food beverages and restaurant

services. At this juncture, it will be appropriate to notice some of the

judgments of this Court relied upon by the learned Senior Counsel for

the Defendants wherein it was laid down that if a party itself applies

for registration of a mark, it is not permissible for the said party to

raise a plea that the mark is generic and is incapable of being

registered or owned by a particular person. In Anchor Health and

Beauty Care Pvt. Ltd. v. Procter & Gamble Manufacturing (TIANJIN)

Co. Ltd. & Ors., 2014 (59) PTC 105 (Del), while dealing with

I.A.11461/2013 in CS(OS)1431/2013, a plea raised by the Defendant

that the mark "ALL-AROUND PROTECTION" was a generic word

was rejected as Defendant itself had applied for registration of the

mark "ALL-ROUNDER". The learned Senior Counsel referred to

Rajneesh Kumar Singhal v. The State (National Capital Territory of

Delhi), 89 (2001) DLT 511 and Automatic Electric v. R.K. Dhawan &

Anr. 1999(19) PTC 81, wherein it was held as under:

"11. I will first deal with the submission of the defendant, namely, that the mark of the plaintiff is descriptive. Reliance is placed on Section 30(2) (a) read with Section 35 of the Trade Marks Act to claim that a registered trademark is not infringed with the use of the mark in relation to goods which indicate the kind and quality or other characteristics of the goods. It has been urged that the plaintiff has procured the registration on false information and that the defendants have already been advised to seek rectification of the

alleged trademark. The defendants have not denied that they have moved an application for registration of their mark "ALLROUNDER". They have also not denied that they have obtained registration of the mark "ALL-AROUND PROTECTION" in the United States. They have, however, urged that the term "ALLROUNDER" is a product neutral expression. Further regarding registration of the mark in United States it is urged that the said registration in United States is inconsequential to the present proceedings as the Trade Marks Act applies only to the jurisdiction of India. It is further urged that a descriptive word will not change its character merely by an act of the defendant.

12. What is the effect of these background facts i.e. that the defendants have themselves applied for registration of the mark "ALLROUNDER" and have also obtained registration of the mark "ALL-AROUND PROTECTION" in USA. In my view it is not permissible for the defendant to approbate and reprobate. Reference in this context may be had to the judgment of the Full Bench of this Court in Rajneesh Kumar Singhal vs. The State (National Capital Territory of Delhi), 89 (2001) DLT 511. In paragraph 6 the Court held as follows:-

6. The submission of the learned senior counsel overlooks the fact that a party cannot normally be allowed to approbate and reprobate. If a party has taken up a specific stand at a particular stage of the court proceedings it should not be open for him to take a contrary position at a subsequent stage of litigation or in different proceedings. The principle serves well as it does not allow a litigant to blow hot and cold at successive stages of the same litigation, or another litigation. The doctrine is well illustrated in Dwijendra Narain v. Joges Chandra 39 C.L.J. 40 where it was held as follows:-

"It is an elementary rule that a party litigant cannot be permitted to assume inconsistent positions in Court, to play fast and loose, to blow hot and cold, to approbate

and reprobate, to the detriment of his opponent. This wholesome doctrine applies not only to the successive stages of the same suit, but also to another suit than the one in which the position was taken up, provided that the second suit grows out of the judgment in the first."

13. Reference may also be had to the judgment of this Court in the case of Automatic Electric vs. R.K.Dhawan, (supra). That was a case which pertained to a suit for injunction filed by the plaintiff for its registered trademark DIMMERSTAT. The defendant in that case is said to have adopted the trademark DIMMER DOT. The defendants in that case took the stand in the said matter that the word DIMMER being a generic word is incapable of serving a trademark function. It was urged that the said word signifies an auto variable transformer and no trader could monopolize its use. The defendants in that case had got their trademark DIMMER DOT registered in Australia. In those facts this Court did not accept the contention of the defendant in that case that DIMMER is a generic expression. In paragraph 16 this Court held as follows:-

"16. The defendants got their trade mark "DIMMER DOT" registered in Australia. The fact that the defendant itself has sought to claim trade proprietary right and monopoly in "DIMMER DOT", it does not lie in their mouth to say that the word "DIMMER" is a generic expression."

14. In view of the said legal position I do not wish to go into the submission of the defendant as to whether the word "ALLROUND" or "ALLROUND PROTECTION" is a generic word. It clearly does not lie for the defendant to raise the said submission in the given facts. Their submission about the mark being generic has to be rejected."

26. Similar sentiments were echoed by a learned Single Judge of this

Court in Dabur India Ltd. v. Real Drinks Pvt. Ltd. and Anr.(CS(OS)

1812/2012) and in Ozone Spa Pvt. Ltd. v. M/s. Ozone Club, (CS(OS)

No.1528/2009).

27. The cases relied upon by the learned Senior Counsel for the

Defendants apply on all fours to the facts of the present case.

Moreover, it has to be borne in mind that the Plaintiff was permitted to

use the mark RUBY TUESDAY and running same business in the

same premises with similar and deceptively similar trade mark will

have to be construed as dishonest and mala fide.

28. Although, it cannot be lost sight of that RUBY TUESDAY became

popular with the younger generation. The contention of the learned

counsel for the Plaintiff that the most of the Plaintiff‟s clients middle

class cannot be brushed aside. However, I am not in agreement with

this contention of the learned counsel for the Plaintiff that simply

because the projected consumers/customers were educated or

belonged to middle class they would readily distinguish the Plaintiff‟s

mark with the Defendants‟ mark. The general principles which have

been repeatedly followed are that the Court has to approach the two

marks from the point of view of a man of average intelligence and

imperfect recollection. Even to the literate class the words/marks

RUBY TUESDAY and RUBY‟s BAR & GRILL may be taken to be

originating from the same person. In Atlas Cycle Industries Ltd. v.

Hind Cycles Limited, (1973) ILR 1 Delhi 393, a Division Bench of

this Court had the occasion to examine the trademark "EASTERN

STAR" belonging to the Plaintiff/Appellant with the mark "ROYAL

STAR" of the Defendants(Respondents) and the Division Bench after

examining a plethora of precedents opined that the mark "ROYAL

STAR" shall be treated as deceptively similar to the mark "EASTERN

STAR".

29. While referring to Atlas Cycle Industries Ltd. v. Hind Cycles Limited,

ILR (1973) I Delhi, the Supreme Court held as under:

".....In an action for an alleged infringement of a registered trade mark, it has first to be seen whether the impugned mark of the defendant is identical with the registered mark of the plaintiff. It the mark is found to be identical, no further question arises, and it has to be held that there was infringement. If the mark of the defendant is not identical, it has to be seen whether the mark of the defendant is deceptively similar in sense that it is likely to deceive or cause confusion in relation to goods in respect of which the plaintiff got his mark registered. For that purpose, the two marks have to be compared, "not by placing them side by side, but by asking itself whether having due regard to relevant surrounding circumstances, the defendant‟s mark as used is similar to the plaintiff‟s mark as it would be remembered by persons possessed of an average memory with its usual imperfections", and it has then to be determined whether the defendant‟s mark is likely to deceive or cause confusion. For such determination, the distinguishing or essential features ( ant not every detail) of the two marks and the main idea, if any, underlying the two marks which a purchaser of

average intelligence and imperfect memory would retain in his mind after seeking the marks, have to be noticed. It has then to be seen whether they are broadly the same or there is an overall similarity or resemblance, and whether the resemblance or similarity is such that there is a reasonable probability of deception or confusion. In doing so, the approach has to be from the point of view of purchaser of average intelligence and imperfect memory or recollection, and not an ignorant, thoughtless and incautious purchaser...."

30. Admittedly, the International Operating Agreement between the

Plaintiff and the Defendant no.1 had come to an end vide a mutual

Separation Agreement dated 27.04.2011.

31. In Morgardshammar India Limited & Ors. v. Morgardshammar AB

193 (2012) DLT 238, the Respondent had obtained registration of the

trademark "MORGARDSHAMMAR". The Appellant was using the

trademark "MORGARDSHAMMAR" in terms of an agreement

between the parties which had been validly terminated. It was held by

a Division Bench of this Court that after termination agreement, the

Appellant cannot be considered to be a permitted user.

32. RUBY TUESDAY or for that matter the mark RUBY in relation to

food and beverages cannot be said to be a generic mark. Rather, the

same is an arbitrary and fanciful mark. Fanciful marks consist of

coined words that have been invented and selected for the sole

purpose of functioning as a trade mark. The Plaintiff in para 12 of the

plaint has averred that the mark RUBY is not the exclusive mark of

Defendant no.1 as it has been registered in respect of various

businesses all over the world including hospitality and various

applications which have been registered or are pending registration in

India and abroad. This plea will not help the Plaintiff at this stage

because the Plaintiff itself used the mark RUBY TUESDAY in

pursuance of an agreement between the Plaintiff and Defendant no.1.

Thus, the Plaintiff was permitted to use the name in terms of the

International Operating Agreement. The use of the mark RUBY‟s

BAR & GRILL in respect of the same goods and services at the same

place which was where the Plaintiff was running RUBY TUESDAY

will, prima facie, will not only be infringement but also dishonest,

mala fide and in order to pass on the goods and services of the

Plaintiff as those of the Defendants.

33. The learned Senior Counsel for the Defendants has taken pains to refer

to the menu card being used by the Plaintiff while running its

restaurant in the name of RUBY‟s BAR & GRILL where food articles

RUBY‟s Classic Chicken Burger, RUBY‟s Burger etc., etc. formed

part of the Defendants‟ menu. This, by itself, may not be sufficient to

show that the Plaintiff is infringing the Defendants trade mark but user

of the mark RUBY‟s BAR & GRILL in respect of the same services at

the same time and place coupled with some of the similar articles in

the menu card speak volume of Plaintiff‟s dishonesty in using a

deceptively similar trade mark to ride on the Defendants reputation

and to pass on the Plaintiff‟s goods as that of the Defendants. In fact,

filing of the instant suit with an application for interim injunction

(IA.1047/2012) seeking restraint against the Defendants shows that

the Plaintiff was aware of the infringement of the Defendants mark by

it and came to this Court apprehending action by the Defendants.

34. In my view, the Defendants have been prima facie able to establish

that the adoption of the mark RUBY‟s BAR & GRILL by the Plaintiff,

in the circumstances of the case, amounts to infringement of the

Defendants mark RUBY TUESDAY. The Plaintiff was a licensee to

use the trade mark RUBY TUESDAY under International Operating

Agreement and the agreement having come to an end, the user of the

mark RUBY‟s BAR & GRILL by the Plaintiff will result in

irreparable loss and injury not only in money but also in Defendants

reputation. It will also amount to dilution of the Defendants mark

RUBY TUESDAY by the Plaintiff who was a licensee to use the mark

RUBY TUESDAY during currency of the International Agreement.

Thus, the balance of convenience also tilts in favour of the

Defendants.

35. In view of the foregoing discussion, I.A. 1047/2012 preferred by the

Plaintiff merits dismissal; the same is accordingly dismissed.

36. I.A.7360/2012 filed by the Defendants is allowed in terms of prayer

clauses (a) (b) and (c).

37. In order to avoid any inconvenience to the Plaintiff, the Plaintiff is

directed to remove the trademark RUBY‟s BAR & GRILL or any

other trade mark deceptively similar to the mark RUBY TUESDAY of

the Defendants within a period of one week from the date of this

order.

38. Needless to say the observations made above are only tentative and

have been made on prima facie view of the matter and shall not be

deemed to be an expression of this Court‟s opinion on the merits of

the case.

39. The applications are disposed of in above terms.

CS(OS) 137/2012

List before the Joint Registrar for admission/denial of documents on

22.12.2014.

(G.P. MITTAL) JUDGE OCTOBER 10, 2014 vk/pst