Delhi High Court
Nirog Pharma Pvt Ltd vs Umesh Gupta & Anr on 21 October, 2016
$~15.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 2517/2015
% Judgment dated 21st October, 2016
NIROG PHARMA PVT LTD ..... Plaintiff
Through Mr. Manish Biala and Mr. Shobhit
Agarwal, Advocates
versus
UMESH GUPTA & ANR .... Defendants
Through None
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
G.S. SISTANI, J (ORAL)
1. None for the defendants. Written Statement has also not been filed;
despite summons having been issued as far back as 24.08.2015, service
effected on 05.12.2015 and vakalatnama filed on behalf of the
defendants on 19.01.2016. The counsel for the plaintiff prays that the
present case may be decreed by invoking the provisions of Order VIII
Rule 10 of the Code of Civil Procedure. He further submits that there
are sufficient documents on record and also the fact that the plaint is
supported by an affidavit of the plaintiff, thus, it is not necessary to lead
evidence.
2. The plaintiff has instituted the present suit praying inter alia for
permanent injunction against the defendants restraining them from
infringing its trademark, copyright, passing off, rendition of accounts,
delivery up, damages etc.
3. As per the plaint, the p laintiff company has been engaged in the
business of manufacturing and selling ayurvedic medicines, non-
CS(OS) 2517/2015 Page 1 of 17
medicinal products, confectionary etc. since 1985 through its
predecessor M/s Nirog Pharmacy, a sole proprietorship of Mr. Anil
Kumar Jain. Subsequently, Mr. Jain incorporated a Company under the
name and style of Tapovan Ayur Pharma Pvt. Ltd. in 1995 and brought
the business of M/s Nirog Pharmacy under the same. The name of the
company was later changed to its present form, i.e. Nirog Pharma Pvt.
Ltd., in the year 2000.
4. The plaintiff claims to be the proprietor and owner of the trade marks
„Harigola‟ and „Taravat‟. The trademark „Harigola‟ was originally
coined and adopted by Mr. Jain under his proprietorship concern M/s
Nirog Pharmacy in the year 1985 and has been continuously and
extensively used openly in the market since then. Similarly, the
trademark „Taravat‟ was coined and adopted by Mr. Jain in the year
1991 and has been extensively and continuously used since then. The
trademarks „Harigola‟ and „Taravat‟ along with their variants are
registered trademarks which are valid and subsisting. The details of the
said trademark registrations are as follows:
S. No. Trademark Class Regn. No. Date of Regn.
1. Harigola 05 521217 13.12.1989
2. Harigola
(Device 05 454127 14.05.1986
Label)
3. Harigola-S 05 624270 04.04.1994
4. Taravat 30 1065215 06.12.2001
5. Taravat
Jalzeera 30 1946849 06.04.2010
(Label)
5. The plaintiff submits that of the aforegoing marks, the marks in serial
nos. 1, 2, 3 and 4 were initially filed by Mr. Jain and have been
CS(OS) 2517/2015 Page 2 of 17
subsequently assigned in favour of the plaintiff company vide
Assignment Deed dated 04.12.2001. The same have also been recorded
by the Trade Mark Registry.
6. The plaintiff claims that the trademarks „Harigola‟ and „Taravat‟ along
with their packaging including get up, lay out, colour combination are
well-known as a result of the plaintiff‟s market leadership and
reputation. Therefore, the plaintiff enjoys statutory rights by virtue of
the trade mark registrations and common law proprietary rights arising
from the goodwill and reputation associated with its trademarks as well
as priority of adoption, long, continuous and extensive use of
trademarks. The plaintiff has also detailed its sales figures under both
the marks in paragraph 8 of the plaint.
7. The plaintiff also claims to be the proprietor of the artistic work in the
„Harigola‟ and „Taravat‟ packaging/labels which bear unique and
fanciful styles and are original artistic work within the meaning of
section 2(c) of the Copyright Act 1957.
8. The facts leading to the filing of the present case are that the plaintiff,
in the year 2010, learnt that certain goods, similar to that of the
plaintiff, are being sold in the market bearing a similar mark as that of
„Taravat‟. Goods were being marketed by the defendant no. 2 under the
label „Taravati‟. Accordingly, the plaintiff had sent a cease and desist
notice on 12.04.2010 as well as a reminder notice dated 25.05.2010.
No response was received for the said notices; but at the same time, the
infringing products were no longer available in the market.
9. Thereafter, in June - July, 2015 the plaintiff was informed by its
distributors that the defendants are manufacturing and selling products
using marks/labels not just „Taravati‟ but another deceptively similar
mark and label „Harbola - X‟, which are similar to the Plaintiff‟s
CS(OS) 2517/2015 Page 3 of 17
trademarks „Taravat‟ and „Harigola‟/ „Harigola - S‟ respectively.
Upon investigation, the plaintiff also claims to have learnt that the
packaging of the defendants‟ products was also a slavish imitation of
the goods of the plaintiff.
10. Aggrieved, the plaintiff has filed the present suit. Notice in the present
suit was issued on 24.08.2015. By means of the same order, a local
commissioner was also appointed to seize the goods of the defendants
being sold under the infringing marks. Service was effected on
05.12.2015. On the next date of hearing, i.e. 20.01.2016, the counsel
for the defendants had entered appearance and sought two weeks time
to file written statement. Thereafter, on 08.03.2016, 04.05.2016 and
16.05.2016, no written statement was filed by the defendants on one
pretext or the other. On 16.05.2016, the matter was adjourned for
today for considering the passing of a decree under Order VIII Rule 10
CPC.
11. Order VIII Rule 10 has been inserted by the legislature to expedite the
process of justice. The courts can invoke its provisions to curb dilatory
tactic, often resorted to by defendants, by not filing the written
statement by pronouncing judgment against it. At the same time, the
courts must be cautious and judge the contents of the plaint and
documents on record as being of an unimpeachable character, not
requiring any evidence to be led to prove its contents. The Supreme
Court in C.N Ramappa Gowda v. C.C. Chandregowda, (2012) 5 SCC
265 had held as under:
"25. We find sufficient assistance from the apt observations of
this Court extracted hereinabove which has held that the effect
[Ed.: It would seem that it is the purpose of the procedure
contemplated under Order 8 Rule 10 CPC upon non-filing of
the written statement to expedite the trial and not penalise the
defendant.] of non-filing of the written statement and
CS(OS) 2517/2015 Page 4 of 17
proceeding to try the suit is clearly to expedite the disposal of
the suit and is not penal in nature wherein the defendant has to
be penalised for non-filing of the written statement by trying
the suit in a mechanical manner by passing a decree. We wish
to reiterate that in a case where written statement has not been
filed, the court should be a little more cautious in proceeding
under Order 8 Rule 10 CPC and before passing a judgment, it
must ensure that even if the facts set out in the plaint are
treated to have been admitted, a judgment and decree could
not possibly be passed without requiring him to prove the facts
pleaded in the plaint.
26. It is only when the court for recorded reasons is fully
satisfied that there is no fact which needs to be proved at the
instance of the plaintiff in view of the deemed admission by the
defendant, the court can conveniently pass a judgment and
decree against the defendant who has not filed the written
statement. But, if the plaint itself indicates that there are
disputed questions of fact involved in the case arising from the
plaint itself giving rise to two versions, it would not be safe for
the court to record an ex parte judgment without directing the
plaintiff to prove the facts so as to settle the factual
controversy. In that event, the ex parte judgment although may
appear to have decided the suit expeditiously, it ultimately
gives rise to several layers of appeal after appeal which
ultimately compounds the delay in finally disposing of the suit
giving rise to multiplicity of proceedings which hardly
promotes the cause of speedy trial.
27. However, if the court is clearly of the view that the
plaintiff's case even without any evidence is prima facie
unimpeachable and the defendant's approach is clearly a
dilatory tactic to delay the passing of a decree, it would be
justified in appropriate cases to pass even an uncontested
decree. What would be the nature of such a case ultimately
will have to be left to the wisdom and just exercise of
discretion by the trial court who is seized of the trial of the
suit."
(Emphasis Supplied)
12. Accordingly, for invoking the provisions under Order VIII Rule 10 of
CPC, this court must put to test the averments in the plaint and consider
CS(OS) 2517/2015 Page 5 of 17
their veracity. The present case has been primarily filed by the plaintiff
to protect its trademarks in „Harigola‟ and „Taravat‟ as well as its
copyright in the original artistic work of the packaging/label. At this
juncture, I deem it appropriate to reproduce the marks and
packaging/labels of the parties:
Trademarks of the Parties
Plaintiff's Marks Defendant's Marks
HARIGOLA - S HARBOLA - X
TARAVAT TARAVATI
Packaging/Labels of the Parties
Plaintiff's Label Defendant's Label
HARIGOLA - S HARBOLA - X
Front Side Front Side
CS(OS) 2517/2015 Page 6 of 17
Back Side Back Side
TARAVAT TARAVATI
Front Side Front Side
Back Side Back Side
CS(OS) 2517/2015 Page 7 of 17
INFRINGEMENT OF TRADEMARK
13. Based on the documents placed on record, there is no doubt that the
plaintiff is the registered proprietor of the trade marks mentioned in
paragraph 4 aforegoing. Section 29 (2) of the Trade Marks Act
stipulates the conditions when usage by a person amounts to
infringement of a registered trademark. Section 29 (2) reads as
follows:
"(2) A registered trade mark is infringed by a person who, not
being a registered proprietor or a person using by way of
permitted use, uses in the course of trade, a mark which
because of--
(a) its identity with the registered trade mark and the
similarity of the goods or services covered by such
registered trade mark; or
(b) its similarity to the registered trade mark and the
identity or similarity of the goods or services covered
by such registered trade mark; or
(c) its identity with the registered trade mark and the
identity of the goods or services covered by such
registered trade mark,
is likely to cause confusion on the part of the public, or which
is likely to have an association with the registered trade
mark."
(Emphasis Supplied)
14. In respect of the test of from adjudicating infringement, a coordinate
bench of this Court in The Royal Bank of Scotland Group PLC v.
Sharekhan Limited, 216 (2015) DLT 197, after taking into
consideration numerous judicial pronouncements, held as under:
"35. The test of comparison of the marks side by side is not a
sound one since a purchaser will seldom have the two marks
actually before him when he makes his purchase. The eye is
not an accurate recorder of visual detail and marks are
remembered by general impression or by some significant
detail rather than by any photographic recollection of the
CS(OS) 2517/2015 Page 8 of 17
whole. While judging the question as to whether the
defendants have infringed the trade mark by colourable
imitation of the mark or not, the Court has to consider the
overall impression of the mark in the minds of general public
and not by merely comparing the dissimilarities in the two
marks.
36. In order to establish infringement, the main ingredients of
Section 29 of the Act are that the plaintiff's mark must be
registered under the Act; the defendant's mark is identical with
or deceptively similar to the registered trade mark; and the
defendant's use of the mark is in the course of trade in respect
of the goods covered by the registered trade mark. The rival
marks are to be compared as a whole. Where two rival marks
are identical, it is not necessary for the plaintiff to prove
further that the use of defendant's trademark is likely to
deceive and cause confusion as the registration shows the title
of the registered proprietor and the things speak for
themselves. In an infringement action, once a mark is used as
indicating commercial origin by the defendant, no amount of
added matter intended to show the true origin of the goods can
effect the question. If Court finds that the defendant's mark is
closely, visually and phonetically similar, even then no further
proof is necessary.
Test of comparison of rival marks
37. (i) In Pianotist Co. Ltd.'s application, 1906 (23) R.P.C.
774, it was observed as follows :
"You must take the two words. You must judge of them,
both by their look and by their sound. You must
consider the goods to which they are to be applied.
You must consider the nature and kind of customer
who would be likely to buy those goods. In fact, you
must consider all the surrounding circumstances; and
you must further consider what is likely to happen if
each of those trade marks is used in a normal way as a
trade mark for the goods of the respective owners of
the marks. If, considering all those circumstances, you
come to the conclusion that there will be a confusion-
that is to say, not necessarily that one man will be
injured and the other will gain illicit benefit, but that
there will be a confusion in the mind of the public
CS(OS) 2517/2015 Page 9 of 17
which will lead to confusion in the goods-then you may
refuse the registration, or rather you must refuse the
registration in that case."
...
(iii) In the case of Sandow Ltd.'s Application, 31 R.P.C. 205 it
was clarified that among the surrounding circumstances to be
taken into account, one of considerable importance is the
imperfect recollection a person is likely to have of a mark with
which he is only vaguely acquainted. While approving the
above tests for comparison of the two word-marks, the
Supreme Court held in F. Hoffmann-La Roche & Co. Ltd. Vs.
Geoffrey Manner & Co. Pvt. Ltd. (1969) 2 SCC 716 that:
"It is also important that the marks must be compared
as whole. It is not right to take a portion of the word
and say that because that portion of the word differs
from the corresponding portion of the word in the
other case there is no sufficient similarity to cause
confusion. The true test is whether the totality of the
proposed trade mark is such that it is likely to cause
deception or confusion or mistake in the minds of
persons accustomed to the existing trade mark."
(iv) In the case of Tokalon Ltd. v. Devidson and Co. 32 R.P.C.
133, it was observed that:
"...We are not bound to scan the words as we would in
a question of compatriotic literarum. It is not a matter
for microscopic inspection, but to be taken from the
general and even casual point of view of a customer
walking into a shop."
...
(vii) In the decision reported in AIR 1951 Bom 147, James
Chadwick & Bros. Ltd. v. The National Sewing Thread Co.
Ltd. Chagla C.J. and Bhagwati, J.; referring to the words
"likely to deceive or cause confusion" in section 10 of the Act
observed as follows:-
"Now in deciding whether a particular trade mark is
likely to deceive or cause confusion, it is not sufficient
merely to compare it with the trade mark which is
already registered and whose proprietor is offering
opposition to the registration of the former trade mark.
What is important is to find out what is the
distinguishing or essential feature of the trade mark
already registered and what is the main feature or the
main idea underlying that trade mark, and if it is found
that the trade mark whose registration is sought
contains the same distinguishing or essential feature
or conveys the same idea, then ordinarily the Registrar
would be right if he came to the conclusion that the
trade mark should not be registered. The real question
is as to how a purchaser, who must be looked upon as
an average man of ordinary intelligence, would react
to a particular trade mark, what association he would
form by looking at the trade mark, and in what respect
he would connect the trade mark with the goods which
he would be purchasing. It is impossible to accept that
a man looking at a trade mark would take in every
single feature of the trade mark. The question would
be, what would he normally retain in his mind after
looking at the trade mark? What would be the salient
feature of the trade mark which in future would lead
him to associate the particular goods with that trade
mark?"
..."
(Emphasis Supplied)
15. In the present case, a comparative analysis of the marks as represented
in paragraph 12 aforegoing, clearly shows a similarity in the marks of
the parties. Further, there is also a phonetic similarity in the marks. In
„Harigola - S‟ and „Harbola - X‟, even the use of alphabet at the end of
the mark has been cleverly chosen. The alphabets „S‟ and „X‟ are
phonetically similar when pronounced in isolation as in the present
case. It is settled law, that the marks should not be meticulously
compared side by side as it is not possible for the consumer to have an
opportunity to do the same.
16. It is also clear that the marks are being applied for the same/ identical
goods. „Harigola - S‟ and „Harbola - X‟ are being used for goliyaan
(tablets) and „Taravat‟ and „Taravati‟ are being used for jaljeera
(beverage).
17. In view of the aforegoing, I am of the view that the defendants are
infringing the registered trademarks of the plaintiff under Section 29
(2) (b).
PASSING OFF
18. Passing Off action arises out of common law and is not pre-conditioned
on registration. The term „passing off‟ was explained by James, L.J. in
as under:
"...I have often endeavoured to express what I am going to
express now (and probably I have said it in the same words,
because it is very difficult to find other words in which to
express it) -- that is, that no man is entitled to represent his
goods as being the goods of another man; and no man is
permitted to use any mark, sign or symbol, device or other
means, whereby, without making a direct false representation
himself to a purchaser who purchases from him, he enables
such purchaser to tell a lie or to make a false representation to
somebody else who is the ultimate customer."
(Emphasis Supplied)
19. Lord Diplock in Erven Warnink Besloten Vennootschap v. J.
Townend & Sons (Hull) Ltd., [1979] A.C 731 had identified five
essentials to establish an action of passing off. The relevant excerpt is
as under:
"My Lords, A.G Spalding and Brothers v. A. W. Gamage Ltd.,
84 L.J.Ch 449, and the later cases make it possible to identify
five characteristics which must be present in order to create a
valid cause of action for passing off: (1) a misrepresentation,
(2) made by a trader in the course of trade, (3) to propsective
customers of his or ultimate consumers of goods or services
supplied by him, (4) which is calculated to injure the business
or goodwill of another trader (in the sense that this is a
reasonably foreseeable consequence) and (5) which causes
actual damage to a business or goodwill of the trader by whom
the action is brought or (in a quia timet action) will probably
do so."
(Emphasis Supplied)
20. The aforegoing essentials have been accepted by the Supreme Court in
Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5
SCC 73 and Heinz Italia v. Dabur India Ltd., (2007) 6 SCC 1. In
Cadila Health Care Ltd. (Supra), the Supreme Court had further laid
down the following decisive tests for checking deceptive similarity:
"35. Broadly stated, in an action for passing-off on the basis of
unregistered trade mark generally for deciding the question of
deceptive similarity the following factors are to be considered:
(a) The nature of the marks i.e. whether the marks are
word marks or label marks or composite marks i.e.
both words and label works.
(b) The degree of resembleness between the marks,
phonetically similar and hence similar in idea.
(c) The nature of the goods in respect of which they
are used as trade marks.
(d) The similarity in the nature, character and
performance of the goods of the rival traders.
(e) The class of purchasers who are likely to buy the
goods bearing the marks they require, on their
education and intelligence and a degree of care they
are likely to exercise in purchasing and/or using the
goods.
(f) The mode of purchasing the goods or placing
orders for the goods.
(g) Any other surrounding circumstances which may
be relevant in the extent of dissimilarity between the
competing marks.
36. Weightage to be given to each of the aforesaid factors
depending upon facts of each case and the same weightage
cannot be given to each factor in every case."
(Emphasis Supplied)
21. In the present case, applying the aforegoing test I am of the view that
the defendants have tried to dupe the general public by portraying their
products in a manner that they originate from the plaintiff. Such usage
would inevitably lead to loss of revenue as also that of goodwill.
Accordingly, the defendants have indulged into the offence of passing
off.
22. Having held that the defendants have infringed the registered
trademarks of the plaintiff as well as committed the tort of passing off,
the only other issue which remains in the present suit is damages.
23. A coordinate bench of this court in the case of Relaxo Rubber Limited
& Anr. v. Selection Footwear & Anr., AIR 2000 Del 60 which while
granting injunction also granted damages under Order VIII Rule 10 in a
case for infringement of copyright and trade mark.
PUNITIVE DAMAGES
24. With regard to the relief of damages as claimed by the plaintiffs in
paragraph 26 (h) of the plaint, the plaintiffs relied in Time
Incorporated v. Lokesh Srivastava & Anr., 2005 (30) PTC 3 (Del):
2005 (116) DLT 599, while awarding punitive damages of Rs. 5 lakhs
in addition to compensatory damages also of Rs. 5 lakhs, Justice R.C.
Chopra observed as under:
"8. This Court has no hesitation on saying that the time has
come when the Courts dealing actions for infringement of
trade marks, copy rights, patents etc. should not only grant
compensatory damages but award punitive damages also with
a view to discourage and dishearten law-breakers who indulge
in violations with impunity out of lust for money so that they
realise that in case they are caught, they would be liable not
only to reimburse the aggrieved party but would be liable to
pay punitive damages also, which may spell financial disaster
for them. In Mathias v. Accor Economy Lodging Inc., 347 F.3d
672 (7th Cir. 2003) the factors underlying the grant of punitive
damages were discussed and it was observed that one function
of punitive damages is to relieve the pressure on an
overloaded system of criminal justice by providing a civil
alternative to criminal prosecution of minor crimes. It was
further observed that the award of punitive damages serves the
additional purpose of limiting the defendant's ability to profit
from its fraud by escaping detection and prosecution. If a
torfeasor is caught only half the time he commits torts, then
when he is caught he should be punished twice as heavily in
order to make up for the times he gets away. This Court feels
that this approach is necessitated further for the reason that it
is very difficult for a plaintiff to give proof of actual damages
suffered by him as the defendants who indulge in such
activities never maintain proper accounts of their transactions
since they know that the same are objectionable and unlawful.
In the present case, the claim of punitive damages is of Rs. 5
lacs only which can be safely awarded. Had it been higher
even, this Court would not have hesitated in awarding the
same. This Court is of the view that the punitive damages
should be really punitive and not flea bite and quantum thereof
should depend upon the flagrancy of infringement."
(Emphasis Supplied)
25. This Court in the case of Microsoft Corporation v. Rajendra Pawar &
Anr., reported at 2008 (36) PTC 697 (Del.), has held:
"22. Perhaps it has now become a trend of sorts, especially in
matters pertaining to passing off, for the defending party to
evade Court proceedings in a systematic attempt to jettison the
relief sought by the Plaintiff. Such flagrancy of the Defendant's
conduct is strictly deprecatory, and those who recklessly
indulge in such shenanigans must do so at their peril, for it is
now an inherited wisdom that evasion of Court proceedings
does not de facto tantamount to escape from liability. Judicial
Process has its own way of bringing to task such erring parties
whilst at the same time ensuring that the aggrieved party who
has knocked the doors of the Court in anticipation of justice is
afforded with adequate relief, both in law and in equity. It is
here that the concept of awarding punitive damages comes
into perspective.
23. Punitive damages are a manifestation of equitable relief
granted to an aggrieved party, which, owing to its inability to
prove actual damages, etc., could not be adequately
compensated by the Court. Theoretically as well as
practically, the practice of awarding of punitive damages may
be rationalized as preventing under-compensation of the
aggrieved party, allowing redress for undetectable torts and
taking some strain away from the criminal justice system.
Where the conduct of the erring party is found to be
egregiously invidious and calculated to mint profits for his
own self, awarding punitive damages prevents the erring party
from taking advantage of its own wrong by escaping
prosecution or detection."
(Emphasis Supplied)
26. A coordinate bench of this court in the case of The Heels v. Mr. V.K
Abrol and Anr., CS (OS) NO.1385 of 2005 decided on 29.03.2006 has
held:
"11. This court has taken a view that where a defendant
deliberately stays away from the proceedings with the result
that an enquiry into the accounts of the defendant for
determination of damages cannot take place, the plaintiff
cannot be deprived of the claim for damages as that would
amount to a premium on the conduct of such defendant. The
result would be that parties who appear before the court and
contest the matter would be liable to damages while the
parties who choose to stay away from the court after having
infringed the right of the plaintiff, would go scotfree. This
position cannot be acceptable.
12. No doubt it is not possible to give an exact figure of
damages on the basis of actual loss, but certain token amounts
on the basis of the sales of the plaintiff can certainly be made.
The plaintiff is unnecessarily dragged into litigation and the
defendants must bear consequences thereof. In fact in such a
case both compensatory and punitive damages ought to be
granted apart from the costs incurred by the plaintiff on such
litigation. In view of the given sales figure of the plaintiff, I
consider it appropriate to grant a decree of damages in favor
of the plaintiff and against the defendants for a sum of Rs 3
lakh apart from costs of the suit."
27. In view of the facts of the present case, this Court is of the opinion that
in the present case Rs. 2 lakhs as punitive damages be granted in favour
of the plaintiff and against the defendant in terms of 26 (h) of the plaint.
28. The present suit is also a commercial suit within the definition of the
Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Act, 2015 and it was the clear intention of the
legislature that such cases should be decided expeditiously and should
not be allowed to linger on. Accordingly, if the defendant fails to
persue his case or does so in a lackadaisical manner by not filing his
written statement, the courts should invoke the provisions of Order VIII
Rule 10 to decree such cases.
29. Resultantly, having been satisfied with the averments made and duly
supported by documents, report of the local commissioner and no
written statement being on record, I deem it a fit case to for invoking
the provisions of Order VIII Rule 10 of the Code of Civil Procedure.
30. Accordingly, the present suit is decreed in favour of the plaintiff and
against the defendant in terms of paragraphs 26 (a), (b), (c), (d) and (e)
of the plaint along with damages of Rs. 2 lakhs.
G.S.SISTANI, J
OCTOBER 21, 2016
//pst
