Staples Inc & Anr vs Staples Paper Converters Pvt Ltd
2014 Latest Caselaw 5220 Del

           *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                          Date of decision: 17th October, 2014

+      CS(OS) 1879/2009, I.As. No.12835/2009 (u/O 39 R-1&2 CPC) &
       4196/2013 (u/O 7 R-14 CPC) & Crl.M.A. No.5766/2011 (u/S 340
       Cr.P.C.)

       STAPLES INC & ANR                                       ..... Plaintiffs
                    Through:               Mr. Sai Krishna Rajagopal, Ms.
                                           Shikha Sachdev, Mr. Karan Bajaj
                                           and Ms. Julien George, Advs.

                                      Versus

    STAPLES PAPER CONVERTERS PVT LTD ..... Defendant
                  Through: Mr. Sanjay Jain, Sr. Adv. with Mr.
                           Y.N. Bhardwaj, Ms. Ruchi Jain,
                           Mr. Sarfaraz Ahmad, Ms. Rajul
                           Jain and Ms. Aastha Jain, Advs.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

IA No.12835/2009 (of the plaintiffs under Order XXXIX Rules 1&2
CPC)

1.

The application of the plaintiffs for interim injunction, in this suit

for the reliefs of injunction restraining, infringement of trademark

„STAPLES‟ and / or the defendant by use thereof passing off its goods

and services as that of the plaintiffs, and for ancillary reliefs, is for

consideration.

2. The plaintiffs instituted the suit, pleading:

(a) that the plaintiff no.1 Staples, Inc. is a company incorporated

under the laws of the State of Delaware, USA;

(b) that the plaintiff no.2 Staples Future Office Products Pvt.

Ltd. is a joint venture of the plaintiff no.1 and Pantaloon

Retail (India) Ltd.; the plaintiff no.1 is thus carrying on

business in India through the plaintiff no.2;

(c) that the plaintiff no.2 is also a licensee of the plaintiff no.1

for the trademark „STAPLES‟;

(d) that the plaintiff no.1 is the worldwide proprietor and owner

of the well known and famous trademark „STAPLES‟ since

the year 1986 and is the largest office products company in

the world providing a wide range of office products and

supplies such as binders and accessories, boards & easels,

breakroom supplies, calendars & planners, computer bags &

cases, drafting & school supplies, envelopes, forms &

stamps, file folders & accessories, janitorial & cleaning

supplies, labels & label makers, mailroom & shipping

supplies, paper & pads, pens, writing & correction, post-its,

stickers & flags, staplers, punches, trimmers, storage & desk

organizers, store supplies & signs, tape, clips & rubber bands

etc.;

(e) that the plaintiff no.1 conceived and adopted the mark

„STAPLES‟ in 1986 and as on the date of institution of the

suit had sales amounting to US$ 23 billion throughout the

world;

(f) that the trademark „STAPLES‟ enjoys immense popularity

worldwide;

(g) that the plaintiff no.1 in the year 2008 was ranked 128 th in

the list of Fortune 500 Companies;

(h) that the plaintiff no.1 is the registered proprietor of the

trademark „STAPLES‟ since the year 2003 in Class 42 (of

the Fourth Schedule to The trade Mark Rules, 2002) and has

also applied for registration of the trademark „STAPLES‟ in

Classes 35, 16, 2, 3, 9, 18, 20 & 21;

(i) that the plaintiff no.1 is also the registered proprietor of the

trademark „STAPLES‟ in USA, Argentina, Canada,

Germany, Bulgaria commencing from the year 1987

onwards;

       (j)     that the plaintiff no.1 also does extensive business on the

               internet      through      the   domain   name     /    website

„www.staples.com‟; the plaintiff no.2 also carries on

business through its website „www.staplesfuture.com‟;

(k) that the defendant is engaged in the business of manufacture

and trading of paper since the year 2000 and is trading its

goods under the trademark „STAPLES‟ which is identical as

a whole to the plaintiffs‟ well known and famous trademark;

(l) that the defendant vide legal notice dated 14 th January, 2008

to the plaintiff no.2 claimed proprietorship over the

trademark „STAPLES‟ in Class 16 and also claimed to have

opposed the trademark application of the plaintiff no.1 in

Class 35;

(m) that though the plaintiff no.1 replied on 7th March, 2009 to

the aforesaid legal notice claiming rights to the said

trademark but the defendant instituted a suit in the District

Court of Ghaziabad against the plaintiff no.2 alleging

infringement and passing off by the plaintiff no.2 of the

trademark „STAPLES‟;

(n) that the plaintiffs filed an application before the Intellectual

Property Appellate Board (IPAB) for rectification / removal

of the registration of the mark „STAPLES‟ in the name of

the defendant in Class 16;

(o) that the adoption by the defendant of the trademark

„STAPLES‟ is dishonest and mala fide.

3. Summons of the suit and notice of the application for interim relief

were issued to the defendant. The defendant has contested the suit, by

filing a written statement, on the grounds:-

(i) that the defendant has been using the trademark „STAPLES‟

in respect of its goods in Class 16, since the year 2000 and

was granted registration on 4th December, 2003; thus the

defendant is the prior user and proprietor of the trademark

„STAPLES‟;

(ii) that the plaintiff no.2 neither has any registration of the

trademark „STAPLES‟ in its favour nor has any valid

assignment from the plaintiff no.1 and thus has no locus

standi to maintain the suit;

(iii) that the plaintiff no.1 admittedly has no user of the

trademark „STAPLES‟ in relation to the goods in question in

India notwithstanding registration in Class 42 since 22nd

October, 2003, which is a service mark registration and does

not relate to any tangible goods;

(iv) that the plaintiff no.1 had sought registration in Class 42, on

"proposed to be used" basis and confined to "retail stores

services";

(v) that the plaintiff no.1 cannot claim user in India through the

plaintiff no.2 since there is no Registered User Agreement

between the plaintiff no.1 and the plaintiff no.2 and the so-

called Licence Agreement does not confer any right on the

plaintiff no.2 to claim statutory rights of restraining the

defendant from infringement;

(vi) that the defendant being the registered owner of the

trademark „STAPLES‟ cannot otherwise also be restrained

for infringement;

(vii) that the suit thus has to be decided on the parameters of

passing off;

(viii) that since the plaintiff no.1 has no direct or indirect actual

user of the trademark „STAPLES‟ in India, it cannot

maintain an action for passing off;

(ix) that even the plaintiff no.2 cannot maintain an action for

passing off since the defendant is the prior user of the mark;

the plaintiff no.2 has also not opened any retail store in New

Delhi for which the plaintiff no.1 had obtained registration

on proposed use basis;

(x) that this Court does not have territorial jurisdiction to

entertain the suit;

(xi) that the plaintiff no.1 has applied for registration of the

trademark „STAPLES‟ in Class 16, only on 27th August,

2008 when the defendant has registration in the said Class

since the year 2003;

(xii) denying that the plaintiff no.2 has any interactive or active

website in India;

(xiii) that the plaintiff is guilty of laches and delay inasmuch as

though the defendant had served a notice dated 14 th January,

2008 on the plaintiff no.2, the plaintiffs replied thereto only

on 7th March, 2009.

4. I may record that the defendant had also filed an application under

Order VII Rule 11 of the CPC (IA No.15872/2009) but the same was

withdrawn on 25th May, 2011 and an application under Section 10 of the

CPC which was dismissed as withdrawn on 25th May, 2011. The plaintiff

no.1 has filed a replication to the written statement but the need to advert

thereto at this stage is not felt.

5. Issues were framed in the suit on 24th April, 2012 and a Court

Commissioner appointed to record the evidence. However recording of

the evidence has not begun as yet owing to the parties having been

referred to the Mediation Cell of this Court and which has remained

unsuccessful. The counsels for the parties have been heard.

6. The counsel for the plaintiffs has informed / argued:-

(a) that the suit filed by the defendant against the plaintiff no.2

in the Courts at Ghaziabad stands dismissed as withdrawn;

(b) that the defendant in the said suit had admitted the

possibility of confusion / deception owing to the trademark

of the defendant and of the plaintiffs being identical and thus

the only question for adjudication is whether the plaintiffs or

the defendant are the rightful proprietors of the mark;

(c) that the plaintiffs, besides on the ground of infringement,

have also sued on the ground of passing off;

(d) that while the registration of the plaintiff no.1 in Class 42 for

"retail stores services" is dated 22nd October, 2003, the

registration in favour of the defendant in Class 16 is dated 4th

December, 2003;

(e) that the plaintiff no.1 entered into the Indian market through

plaintiff no.2 in the year 2007 with a STAPLES Store in

Bangalore and at present has seven STAPLES Stores in

India;

(f) that though defendant has registration in Class 16 but is

carrying on business of retailing, falling under Class 42, as is

apparent from the bills and purchase orders of the defendant

of supply of „JK Copier‟ paper; the defendant is not

manufacturing and selling paper under the STAPLES brand

though is manufacturing pads etc. under the STAPLES brand

and which is use in Class 16;

(g) that since the defendant does not have a Class 42

registration, the defence of Section 28(3) of the Trade Marks

Act, 1999 is not available to the defendant;

(h) that even if the plaintiffs are second in entering the market in

India, being the first in the world market and which

reputation spilled over in India owing to foreign publications

containing advertisements of plaintiff no.1 having circulation

in India, are the proprietor of the said mark;

       (i)     Reliance is placed on:


               (I)     Milmet Oftho Industries Vs. Allergan Inc. (2004) 12

SCC 624 to contend that the mere fact that the mark

has not been used in India would be irrelevant if the

plaintiff is the first in the world market;

(II) Lowenbrau AG Vs. Jagpin Breweries Ltd. 157 (2009)

DLT 791 to contend that the question of prior use

cannot be agitated on the basis of use in India alone

and that national and manmade boundaries and

borders are getting diluted and the world has to be

viewed as one common market;

(III) N.R. Dongre Vs. Whirlpool Corporation AIR 1995

Delhi 300 (DB) to contend that from prima facie

evidence of advertisements in international

publications and sale of products bearing the

Whirlpool trademark in various geographical regions

of the world and inspite of sales in India limited to the

US Embassy and the US Aid Office in Delhi,

injunction was issued in this case.

(j) that the defendant has not given any explanation for adoption

of the trademark „STAPLES‟; the father of the Director of

the defendant and under whose guidance defendant has been

incorporated is a well known and eminent personality in the

paper industry since the year 1979 and is thus deemed to be

aware of the trademark „STAPLES‟ of the plaintiffs; a list of

international publications containing advertisements of the

worldwide registrations of the plaintiff was handed over;

(k) reliance in this regard is placed on Metropol India (P) Ltd.

Vs. Praveen Industries India (Regd.) 1997 PTC (17) (DB),

Polson Vs. Polson Dairy Ltd. 1996 (16) PTC 709 (Del)and

on Alfred Dunhill Ltd. Vs. Kartar Singh Makkar

MANU/DE/0639/1999;

(l) reference is made to the written note of arguments along

with copies of the judgments filed;

(m) with respect to the pendency of the rectification application

before the IPAB and Section 124(1)(b)(i) of the Trade Marks

Act, 1999 requiring the suit pending the final disposal of

such proceedings, to be stayed, it is contended that the same

does not come in the way of the application for interim relief

being decided; reliance in this regard is placed on Clinique

Laboratories LLC Vs. Gufic Ltd. 2009 (41) PTC 41 (Del)

and it is contended that though the same was reversed by the

Division Bench in Gufic Ltd. Vs. Clinique Laboratories

LLC 2010 (43) PTC 788 (Del) but not on the said aspect; it

is further stated that the view as taken in Clinique

Laboratories LLC (supra) was also followed in Rajnish

Aggarwal Vs. Anantam 2010 (43) PTC 442 (Del).

7. Per contra, the senior counsel for the defendant has argued:

(i) that while the registration dated 4th December, 2003 in

favour of the defendant is on the basis of user since the year

2000, the registration in favour of the plaintiff no.1 is on

proposed to be used basis and which is indicative of the

plaintiff not using the trademark in India at least till the year

2003;

(ii) that the plaintiff no.1 has not pleaded any date of coming to

India and / or of the use of the trademark in India and

therefore cannot restrain the defendant for infringement and

can claim injunction only on the principle of passing off;

(iii) that as per Section 124(1)(b)(i) of the Act, the suit is liable to

be stayed and if the Civil Court cannot proceed with the suit,

it cannot decide the interim injunction also;

(iv) that though Section 124(5) permits making of interlocutory

orders but only where no claim for injunction on the basis of

passing off is claimed; if the claim for injunction on the

ground of infringement is also accompanied with a claim for

injunction on the ground of passing off, the test to be applied

for granting injunction has only to be on the principle of

passing off and not infringement;

(v) that the plaintiff‟s registration is for service mark and not for

any product;

(vi) that for injunction on the ground of infringement under

Section 29(4) of the Act to be granted, it has to be first

established that the trademark is a well known trademark and

has a reputation in India; the trademark of the plaintiff is not

registered as a well known trademark;

(vii) that the plaintiffs have not even pleaded that in the year 2000

when the defendant commenced using the said mark, the

plaintiff had trans border reputation;

(viii) that the plaintiffs have not disputed use by the defendant of

the trademark since the year 2000;

(ix) there can be no trans classification reputation;

(x) that for Section 29(4) to apply, it is essential to establish

reputation in India on the date of commencement of user of

the trademark by the defendant;

(xi) that the plaintiff no.1 claims to have commenced use of the

trademark in India only in the year 2007 and in the short

time between 2007 and institution of the suit in the year

2009, could not have acquired any reputation;

(xii) that the defendant has been using the mark for nine years i.e.

since the year 2000, prior to the institution of the suit in the

year 2009;

(xiii) that the plaintiff no.1 even while applying for registration in

the year 2003 did not claim user in India or reputation in

India; the plaintiff had no presence in India prior to 2007;

(xiv) there is no plea in the plaint of trans border reputation;

(xv) that the plaintiff no.1 by mere grant of licence to the plaintiff

no.2 to use the trademark cannot avail of the benefit of

Section 48(2) of the Act;

(xvi) relief on the basis of passing off can be availed only by

plaintiff no.2 and not by plaintiff no.1;

(xvii) that even in the cause of action paragraph in the plaint, no

plea of trans border reputation has been taken;

(xviii) none of the documents filed by the plaintiff no.1 also show

any trans border reputation;

(xix) the journals containing the advertisements of the plaintiffs

are not freely available in India;

(xx) in the year 2000, when the defendant commenced / used its

trademark, the internet was not so commonly prevalent;

(xxi) that even now the plea is only of having STAPLES Stores

and not use of the trademark „STAPLES‟ qua any product;

(xxii) that the plaintiffs, even after knowledge from the notice

dated 14th January, 2008 of use and registration of the

trademark by the defendant, filed the suit only on 6th

October, 2009 and are not entitled to any discretionary relief

on the ground of laches;

(xxiii) that the balance of convenience is in favour of the defendant

who is using the mark since the year 2000;

(xxiv) the plaintiffs have not pleaded products qua which the

trademark „STAPLES‟ is being used;

(xxv) that the plaintiffs by not taking any action against the

defendant from the year 2000 to 2008 have allowed the

business of the defendant to grow and cannot now object;

(xxvi) reliance is placed on the judgment of a Single Judge of this

Court in Whirlpool Co. Vs. N.R. Dongre 1996 PTC (16) 415

to contend that in that case the trademark „Whirlpool‟ had

been found to be frequently advertised in international magazines

having circulation in India from prior to the commencement

of the use of the same trademark by the defendant and which

is not the case here.

8. The counsel for the plaintiff in rejoinder has drawn attention /

argued,

(a) to paras 4,7 and 15 of the plaint to contend that the plaintiffs

have pleaded the products qua which they are using the

trademark and their advertisements and promotion of

trademark in international magazines having circulation in

India;

(b) that the defendant in the suit filed by it, having admitted

possibility of confusion, cannot today be heard to contend

that owing to registration in a different class there can be no

case for infringement;

(c) that the plaintiff no.1 is entitled to injunction even on the

principles, enshrined in Section 29(1) of the Act and, of dilution

of the trademark; that the use by the defendant of the trademark

„STAPLES‟ results in dilution of the plaintiffs‟ trademark

registered in several countries; and,

(d) that the delay of about one year in instituting the suit from the

date of knowledge of the mark of the defendant is not such so

as to deprive the plaintiff of the interim relief.

9. I have perused the pleadings, documents as well as the written

arguments of the plaintiffs on record and considered the rival contentions.

10. The plaintiffs, prior to the institution of this suit, having instituted the

proceedings for rectification of the register in relation to the defendant‟s

trademark and which proceedings are still pending before the IPAB and it

being the case of the plaintiffs that the registration of the defendant‟s

trademark is invalid, neither counsel controverted that Section 124(1)(b)(i)

of the Act is attracted and the proceedings in the present suit are liable to be

stayed pending the disposal of such rectification proceedings. The only

question for consideration is whether till then, the defendant, by an interim

injunction, should be restrained from using the trademark „STAPLES‟ of

which it has a registration in Class 16 and of the artwork in which it has a

registration dated 22nd February, 2008 as a copyright, as the documents filed

disclose. I am unable to accept the contention of the senior counsel for the

defendant that owing to the plaintiffs having applied for the relief of

injunction, besides on the ground of infringement of trademark, also on the

ground of passing off, the grant or non-grant of interim injunction is to be

tested only on the anvil of passing off and not on the anvil of infringement.

The law permits a plaintiff to file a composite suit for the relief of injunction

on the basis of infringement as well as passing off. Rather I have in Nippon

Soda Co. Ltd. Vs. V.P. Goyal 2014 (58) PTC 386 (Del), following order

dated 21st August, 2013 in CS(OS) No.1172/2008 titled Mount Everest

Mineral Water Ltd. Vs. Kadir Khan held that if the suit for injunction on

the basis of infringement is required to be stayed under Section 124 of the

Act, the continuation of the suit on the basis of passing off would lead to

splitting up cause of action and duplicity and the suit for injunction on the

basis of passing off is thus also required to be stayed. Moreover, Section

124(5) expressly permits the Court to, while so staying the proceedings in

the suit for injunction on the ground of infringement, deal with the

application for interim relief. The same is the view taken by this Court in

Clinique Laboratories LLC and in Rajnish Aggarwal (supra).

11. The trademark of both the plaintiff no.1 and the defendant are

identical, so much so that even the manner of writing the same, of both is

nearly identical with both writing the alphabets of the word „STAPLES‟ in

bold, uppercase in Times New Roman font of nearly the same size. However

while the registration in favour of the plaintiff no.1 is in Class 42 with the

description "retail store services included in Class 42", the registration in

favour of the defendant is in Class 16 with the goods description of "Paper

and Paper Articles, Cardboard and Cardboard Articles, Printed Matter,

Newspapers and Periodicals, Books, Book Binding Material, Photographs,

Stationery and Stationery Materials, Adhesive Materials, Typewriters and

Office Requisites, Instructional and Teaching Material, Playing Cards and

all type of stationery Items". The question for adjudication at this interim

stage is whether owing to the registration being under different classes it can

be said that no interim relief is to be granted.

12. The registration in favour of the plaintiff no.1 is not in a class or with

respect to any goods but in a class pertaining to services and as described in

the certificate of registration in favour of the plaintiff no.1, in relation to

retail store services included in Class 42. Class 42, as it existed at the time of

registration in favour of the plaintiff no.1, was as under:-

"providing of food and drink; temporary accommodation; medical, hygienic and beauty care; veterinary and agricultural services, legal services, scientific and industrial research; computer programming; services that cannot be classified in other classes."

It has not been argued by the defendant that retail of the products in

which the plaintiffs are dealing is provided for in any other class and would

thus not fall in Class 42.

13. What I understand from the aforesaid is that the plaintiffs have a

registration dated 22nd October, 2003 to set up retail stores in the name and

style of „STAPLES‟; however the same does not provide as to what will be

retailed / sold therefrom. This is in consonance with the business worldwide

of the plaintiff no.1, of operating retail stores in the name and style of

„STAPLES‟. However the business worldwide carried on by the plaintiff

no.1 in the said retail stores is of the sale of the same goods as provided for

in Class 16, in which the defendant holds registration.

14. The counsel for the plaintiffs in written arguments has contended that

the plaintiffs, owing to holding registration in Class 42, have exclusive right

to retail the said goods and the defendant, even though holding registration

in Class 42 with respect to the said goods, are not entitled to retail the same.

In my view it would be incongruous and lead to absurd results, to hold that

the defendant, named Staples Paper Converters Pvt. Ltd., though would be

entitled to manufacture the goods under the trademark „STAPLES‟ would

not be entitled to retail the same under the name „STAPLES‟ or to set up

shop in the name of „STAPLES‟ and the plaintiffs, though would be entitled

to open shop in the name of „STAPLES‟, would not be entitled to sell goods

therefrom with the mark „STAPLES‟.

15. Section 28, while describing the rights conferred by registration, in

Sub-Section (3) thereof provides that such rights do not extend against

another person also registered as proprietor of identical or nearly resembling

mark. Similarly, Section 30(2)(e) provides that a registered trademark is not

infringed where the use of the registered trademark, being one of two

trademarks registered under the Act, which are identical, is in exercise of

rights under such registration. The same is the position in the instant case.

The two marks, as aforesaid, are identical, both being registered, neither can

claim infringement by other.

16. Thus, the grant of interim relief, has to be tested only on the anvil of

"passing off".

17. The defendant has not disputed / controverted the plaintiff no.1 being

first in the world market with the use of the said trademark. However as far

as India is concerned, though the registration in favour of the plaintiff no.1 is

of about one month and ten days prior to the registration in favour of the

defendant, we have to at this stage, in view of the admitted position that

while the plaintiff no.1 had sought registration on „proposed to be used‟

basis and the defendant had sought registration on the basis of user since the

year 2000, proceed on the premise of the defendant commencing user of the

trademark at least seven years prior to the plaintiff no.1.

18. The plaintiff has based its claim for interim injunction largely on the

law as laid down in Milmet Oftho Industries and in Whirlpool Corporation

(supra). The defendant has sought to distinguish Whirlpool Corporation by

contending that while the mark „Whirlpool‟ was found by the Court to be

frequently advertised in international magazines having circulation in India,

from prior to the commencement of the use of the mark by the defendant in

that case i.e. N.R. Dongre, the same cannot be said of the mark „STAPLES‟

of the plaintiff no.1 and it is not borne out from the documents also that the

international magazines in which the said mark of the plaintiff no.1 was

advertised, were having circulation in India.

19. In Milmet Oftho Industries supra the Supreme Court was concerned

with the trademark "OCUFLOX" in respect of an eye care product and

which was found to being used by Allergan Inc. worldwide, though Milmet

Oftho Industries was the first to use it in India. A two Judge bench of the

Supreme Court, besides on N.R. Dongre Vs. Whirlpool Corporation (1996)

5 SCC 714, relied also on Cadila Healthcare Limited Vs. Cadila

Pharmaceuticals Limited (2001) 5 SCC 73 and held, (i) that nowadays the

field of medicine is of an international character; the Court has to keep in

mind the possibility that with the passage of time, some conflict may occur

between the use of the mark by the Milmet Oftho Industries in India and the

user thereof by Allergan Inc. overseas; that the Court must ensure that public

interest is in no way imperiled; (ii) that nowadays goods are widely

advertised in newspapers, periodicals, magazines and other media which is

available in the country and which results in a product acquiring a

worldwide reputation; (iii) that if a mark in respect of a drug is associated

with Allergan Inc. worldwide, it would lead to an anomalous situation if an

identical mark in respect of a similar drug is allowed to be used in India; (iv)

however multinational corporations, which have no intention of coming to India or introducing their

product in India should not be allowed to throttle an Indian Company by not permitting it to

sell a product in India, if the Indian Company has genuinely adopted the

mark and developed the product and is first in the market; (v) that the

ultimate test should be who is first in the market; and, (vi) that the mere fact

that Allergan Inc. had not been using the mark in India would be irrelevant if

they were first in the world market.

20. As far as the distinction sought to be made by the senior counsel for

the defendant, of the mark „STAPLES‟ not having reputation in India and

having not been advertised in any magazines having circulation in India is

concerned, though the plaintiffs have filed before this Court a plethora of

articles published in international magazines pertaining to the plaintiff no.1

as well as extracts from the internet relating to the products with the

trademark „STAPLES‟ of the plaintiff no.1 as well as the copies of the

trademark registrations of the trademark „STAPLES‟ in favour of the

plaintiff no.1 in different countries across the world but I do not feel the

need to foray into the question of circulation of the said magazines in India,

being of the view that though the injunction in Whirlpool Corporation

(supra) may have been on the said premise but the injunction in Milmet

Oftho Industries was de hors the same and merely on the test of who is first

in the world market. Unlike the plaintiffs here, who at least before institution

of the suit had commenced business under the said trademark in India and

which had led the defendant to institute the suit in Ghaziabad Court,

Allergan Inc. which was the plaintiff in Milmet Oftho Industries supra, as it

transpires from the judgment, had till then not even commenced any

business in India under the said trademark. The injunction was granted

merely on the principle of the international boundaries disappearing and the

world shrinking and the anomaly likely to arise from use of the same

trademark relating to the same product by different persons domestically and

internationally. Applying the said principles, the plaintiffs are also entitled to

the relief of interim injunction.

21. In my view, there is no such delay in institution of the suit which

would disentitle the plaintiffs to the relief. The documents filed disclose

correspondence between the counsels for the parties between 14 th January,

2008 and 7th March, 2009 and there is nothing to show acquiescence on the

part of the plaintiffs.

22. Having found prima facie case in favour of the plaintiffs, I proceed to

consider the ingredients of balance of convenience and irreparable

injury, particularly in the context of the defendant having been in

business since the year 2000 i.e. for nearly nine years prior to the institution

of the present suit. The factum, of nearly five years having now elapsed

since the institution of the suit, would have no relevance as held by this

Court in Fedders North AmericanVs. Show Line (2006) 32 PTC 573.

23. The defendant has filed copies of its balance sheets from the year

2001-2002 till the year ending 31st March, 2011 before this Court. As per the

said balance sheets, the sales of the defendant have risen from

Rs.38,07,420/- in the year 2001-2002 to Rs.10,11,83,551/- (inclusive of

other income) in the year 2010-2011. The copies of bills / cash memos /

invoices filed by the defendant show the defendant to, besides in the

business of manufacture and sale of goods under the trademark „STAPLES‟,

being also engaged in the business of sale of „JK Copier‟ Paper and which

perhaps explains the column of commission received in the Balance Sheet

for the year 2001-2002 and the other income in the Balance Sheet for the

year 2010-2011. However the defendant has not explained as to, of the total

income in the year 2010-2011 of Rs.10,11,83,551/-, how much is from the

sale of goods under the trademark „STAPLES‟ and how much is from the

commission received on sale of „JK Copier‟ paper. To gauge as to how

much of the said sales value of the defendant is from sale of „JK Copier‟

Paper and which sale does not entail use of the subject trademark

„STAPLES‟ except for the invoice thereof being in the name of the

defendant and how much from the sale of goods under the trademark

„STAPLES‟ and of which samples in the form of Writing Pads and Long

Exercise and King Size Book have been filed before this Court, I proceeded

to see the expenditure column in the balance sheet for the year 2010-2011.

The same shows the cost of goods sold i.e. cost of acquisition thereof as

Rs.3,98,85,637/- and manufacturing expenses as Rs.3,05,12,845/- with a

resultant profit before tax of Rs.72,83,489/- The same in my view is

indicative of nearly 1/3rd of the gross income of the defendant for the year

2010-2011 being from business other than under the trademark „STAPLES‟

(save for being in the name of the defendant which itself contains the word

„STAPLES‟). The explanation, for manufacturing expenses of

Rs.3,05,12,845/- which is nearly half of the gross sales other than of „JK

Copier‟ paper is also perhaps owing to purchase of paper used in the Writing

Pads and Exercise Books sold under the trademark „STAPLES‟. All this

leads me to the conclusion that the scale of business carried on by the

defendant under the trademark „STAPLES‟ is not relatively voluminous.

24. A perusal of the sample goods under the trademark „STAPLES‟ filed

by the defendant reveals another interesting aspect. One of the Exercise

Books filed, on the cover thereof shows the picture of the Golden Gate

Bridge, San Francisco, United States. The possibility of the defendant, by

not showing an Indian picture, showing the picture of an American landmark

on the cover of its Notebooks sold under the trademark „STAPLES‟,

conveying a connection with the plaintiff no.1, an American Company, and

thereby attempting to take advantage of the reputation of the plaintiff no.1,

cannot be ruled out.

25. The written statement of the defendant, surprisingly, is bereft of any

explanation as to the adoption of the mark „STAPLES‟ by the defendant. I

have in fact wondered as to what could be the reason for the defendant to

adopt the said mark. The word „Staple‟ with plural „staples‟ is a noun,

meaning a piece of thin wire with two short right-angled end pieces which

are driven by a stapler through sheets of paper to fasten them together. I

have wondered as to why anyone would want a noun as a trademark and

which may not enjoy such protection as may be available to coined words

and which, really speaking neither describes the proprietors of the business

nor the business in the Indian context. In fact an ordinary person is likely to

consider the defendant as dealing only in staples, instead of in paper

products as claimed. The only plausible explanation is that the said name

and trademark having international recognition, was adopted for the same

trade / business with a view to take advantage thereof in the event of the

plaintiff no.1 foraying into India.

26. There is nothing on record to show that the business of the defendant

is dependent upon the use of the mark „STAPLES‟. Per contra, the injury to

the plaintiff no.1, which has long used the said trademark internationally and

has now also commenced operations in India, is obvious.

27. I am, in reaching the conclusion that the plaintiffs are entitled to

interim injunction also guided by the consideration that today India is

putting full thrust to developing its economy and to transition from a

developing to a developed nation status. The present as well as the previous

government have in this regard been making attempts to invite multinational

and other foreign corporations to invest in the country. In fact recently a

campaign of "Make in India" has been lodged internationally with the Prime

Minister himself meeting CEOs of large multinational corporations and

inviting them to set up manufacturing / service base in this country.

Multinational companies as the plaintiff no.1 would be reluctant to invest in

India if it were at the cost of losing protection of the trademark established

by them over the past several decades. The Courts in my view, in the

exercise of discretion and in the application of the principle of public interest

which has become the fourth ingredient in the matter of grant of interim

injunction, have to act in tandem and not at loggerheads with the prevalent

Government policies, else, the three organs of the State working in different

directions would lead to a chaos.

28. Before parting, I may also notice that the Supreme Court in Whirlpool

Corporation, while considering the ingredient of balance of convenience

held that injunction is a relief in equity, based on equitable principles and

equity required that an injunction be granted in favour of Whirlpool

Corporation as refusal of injunction would cause irreparable injury to the

reputation of Whirlpool Corporation while grant of injunction would cause

no significant injury to N.R. Dongre who could sell his washing machines

merely by removing the small metallic strip bearing the offensive trademark

/ name. The same applies squarely to the defendant as well.

29. Accordingly, the application is allowed. The defendant, till the

disposal of the suit, is restrained from using the trademark „STAPLES‟ and /

or from passing off its goods and services as that of the plaintiffs, by

desisting from selling, offering for sale, advertising, services or goods of

any description bearing the trademark and / or trade name „STAPLES‟ or

any other mark similar or deceptively similar thereto. However since the

defendant has been carrying on business under the said name for nearly

fourteen years now and since compliance of this order would also entail the

defendant applying to the Registrar of Companies and having its name

changed so as to remove the word „staples‟ therefrom, I make this order

effective w.e.f. 1st December, 2014.

The application is disposed of.

No cost.

RAJIV SAHAI ENDLAW, J

OCTOBER 17, 2014 „gsr‟/pp..