Delhi High Court

Columbia Sportswear Company vs Harish Footwear & Anr on 28 April, 2017

$~
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                    Judgment reserved on : 25.4.2017
                    Judgment delivered on : 28.4.2017
+     CS(COMM) 1611/2016

      COLUMBIA SPORTSWEAR COMPANY

                                                                ..... Plaintiff

                         Through     Mr. Neeraj Grover, Mr. Himanshu
                                     Deora and Mr. Ashwani Pareek, Advs.



                         versus



      HARISH FOOTWEAR & ANR

                                                             ..... Defendants

                         Through     Mr.S.K.Bansal and Mr.Ajay Amitabh
                                     Suman, Advocates.

CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

INDERMEET KAUR, J.

I.A. No.16583/2014 (under Order XXXIX Rules 1 & 2 of the Code) & I.A. No.23361/2014 (under Order XXXIX Rule 4 of the Code)

1 The plaintiff is the Columbia Sportswear Company registered under

the laws of United States of America. In the year 1938, it had conceived and

adopted the mark „COLUMBIA‟ as its trade name and trade mark. It

continues to be a global leader in the design, sourcing, marketing and

distribution of active outdoor apparel and footwear. It has developed an

international reputation for its quality, performance and value. Its reputation

is unparalleled and the value of its produce under the trade mark

„COLUMBIA‟ is well known. Its packaging and trade dress has also

acquired an enormous goodwill and reputation in the market; it has a

secondary meaning with respect to the plaintiff‟s products. The plaintiff has

employed more than 4500 employees and distributors around the world to

sell its products throughout the globe including India. The plaintiff has been

a recipient of various industry awards for its high level performance. It has a

strong association with the Indian territory and a variety of its goods bearing

the plaintiff‟s trade mark „COLUMBIA‟ having been manufactured for

export purpose in India; this was from the year 1996. The plaintiff has

applied for and obtained registration of its trade mark „COLUMBIA‟ in India

details of which finds mention in para 16 of the plaint. They are six such

registrations. It is stated that these registrations are valid and subsisting as

on date. Copies of the registration certificates have also been filed. The

annual turnover of the plaintiff under the trade mark „COLUMBIA‟ .w.e.f.

2004 to 2013 has also been filed; the figure is in millions of US Dollars.

Their goods are available in the Indian market which are the infringing good.

The plaintiff also has a subsidiary M/s Columbia Sportswear India Sourcing

Pvt Ltd having its office at Bangalore who distributes the goods of the

plaintiff.

2 The plaintiff has reason to believe that his consumers which include

mountaineers travelling to India, would be staggered to see identical / similar

goods available in the Indian market which are the infringing goods. In

April, 2013, the plaintiff was made aware of these cheap quality shoes under

the trade mark „COLUMBIA‟ (impugned goods) flooding the markets in

Delhi and other neighbouring states. Alarmed with the situation, a criminal

complaint has been lodged at the Bahadurgarh Police Chowki. It was learnt

that these goods under the trade mark „COLUMBIA‟ were being

manufactured by defendant No. 2 i.e. Galaxy Footwear Pvt. Ltd.,

Bahadurgagh. It was agreed by the police that the office of defendant No. 2

would be raided. A raid was carried out at the office of defendant No. 2 and

the concerned Police Officer was able to seize certain counterfeit goods but

this raid had thereafter to be aborted as an unknown source gave a call to the

said Police Officer not to continue with the proceedings. A complaint was

lodged with the S.P. but no formal registration was made by the concerned

S.P. The plaintiff was frustrated with the lack of response from the police. A

criminal complaint was also registered against defendant No. 2 that

defendant No. 2 is using the trade mark „COLUMBIA‟ which is registered

with the plaintiff; defendant No. 2 is passing of the impugned goods making

the customer believe that they are the plaintiff‟s goods and thereby diluting

the plaintiff‟s proprietary rights. This use of trade mark by defendant No. 2

is dishonest and fraudulent which has caused the huge loss to the plaintiff. In

para 40, it is stated that on the plea of disclaimer on some of the plaintiff‟s

registrations, an opinion was sought from the Registrar of Trade Marks

which opinion was in favour of the plaintiff. Present suit seeking permanent

injunction against the defendants, its directors/agents restraining them from

dealing with the registered trade mark „COLUMBIA‟/passing of the goods

of the plaintiff as that of the defendants along with damages has been

claimed as also the prayer seeking ad-interim injunction against the

defendants.

3 Defendant No. 1 Harish Footwear had filed a written statement

alleging that he has nothing to do with the matter and he is unaware that any

company by the name of defendant No. 2 is functioning. The matter stood

settled with defendant No.1 and the terms of their settlement were contained

in I.A. No.22778/2014. The suit was decreed against defendant No.1 in

terms of the aforenoted settlement.

4 Defense of defendant No. 2 is two fold. His first submission is that his

user of trade mark "COLUMBIA" is honest and he is the prior adopter and

continuously and extensively using this mark in relation to his goods since

1995. The defendant has also applied for a trade mark application under No.

1126256 which was wrongly shown as abandoned. A writ petition (W.P. (C)

No.5866/2013) had been filed in the High Court which was disposed of on

16.07.2014. The status of the said TM application of defendant No. 2 was

shown to be „pending‟ and not „abandoned‟. This information was in fact

uploaded by the Trade Mark Authorities but this factum has been suppressed

by the plaintiff; he has obtained an ex-parte injunction giving an impression

to the Court that the TM application of defendant No. 2 has been abandoned

whereas this is not the correct position. The plaintiff is guilty of

concealment of material facts. The additional submission on this score is

that the plaintiff in para 40 of his plaint has detailed its registrations which

are in his favour but he has failed to disclose that there is disclaimer qua

three of the aforenoted registrations. This also amounts to an active

concealment. Having approached the Court with unclean hands, he is not

entitled to any discretionary relief. Details of the disclaimer attached to the

aforenoted three applications have been detailed. In fact in rejoinder this

position has not been disputed. It is not in dispute that out of six

registrations which are in favour of the plaintiff, three have a disclaimer

attached to them. The additional defence adopted by defendant No. 2 is that

the plaintiff has no trans-border reputation as has been contended by him; he

has failed to establish this. It is pointed out that there is not a single

document of the plaintiff to show his presence in India; no sale figures have

also been filed. It is denied that the plaintiff is selling shoes under the trade

name „COLUMBIA‟ in India. It is denied that the plaintiff has a subsidiary

Company by the name of M/s Columbia Sportswear India Sourcing Pvt Ltd

having its office at Bangalore. Qua the status of the defendant, it is pointed

out that the defendant has been in active business for the sale of shoes since

the year 1995. He cannot be injuncted from carrying out its business. The

plaintiff has failed to make out a prima-facie case.

5 Replication/rejoinder has been filed reiterating the stand of the

plaintiff and denying the defence which has been adopted by the defendants.

6 On behalf of the plaintiff, arguments have been addressed by Mr.

Neeraj Grover, Advocate. It is reiterated that the plaintiff company has

worldwide global reputation and his trade mark is registered; per contra, the

defendant‟s TM application is at best „pending‟ if not „abandoned‟; he does

not have a registration. It is pointed out that the plaintiff in para 40 has

explained that there was a disclaimer set up by defendant No. 2; there has

been no concealment of any fact; additional submission of defendant No. 2

that his TM application was „pending‟ was a fact not known to the plaintiff

at the time when he had filed this suit which was on 19.07.2014 as this order

had not been uploaded and it was not in the knowledge of the plaintiff. He

cannot be held guilty on this count. Learned counsel for the plaintiff points

out defendant No. 2 is in fact selling his cheap scale goods not only under

the brand name „COLUMBIA‟ but also „COLUMBUS‟ and „COPPER

LAND‟ and various other marks which have been adopted by him; the

plaintiff would have no objection to his continuation of the same; he

however cannot infringe upon the registered mark of the plaintiff which is

„COLUMBIA‟ and for which the plaintiff has developed a worldwide global

reputation; defendant No. 2 cannot encash upon the goodwill of the plaintiff.

Learned counsel for the plaintiff in support of his submissions has placed

reliance upon 2004 (28) PTC 121 (SC) Midas Hygiene Industries P. Ltd Vs.

Sudhir Bhatia, 2006 (32) PTC 133 Austin Nichols and Co. and Anr Vs.

Arvind Behl and Anr; submission is that his worldwide reputation has

travelled to India and his name is well established in this country. The

defendant even otherwise has no defence in view of the fact that the plaintiff

has a registered trade mark in his favour; the registered trade mark of the

plaintiff cannot be ignored. Reliance has also been placed upon 2013 (53)

PTC 323 (Del.) Icrave, LLC Vs. Icrave Designs Pvt. Ltd. to support this

submission. It is additionally pointed out that merely because defendant No.

2 may have been advertising his product would not give him a right to use

the trade name of the plaintiff; to support this stand reliance has been placed

upon 2009 (41) PTC 362 (Del.) (DB) Pioneer Nuts and Bolts Pvt. Ltd. Vs.

Goodwill Enterprises. The submission of the defendant that there is a

disclaimer attached to the TM application of the plaintiff also does not make

out a defence; disclaimer by itself would not entitle the defendant to a

defence for this proposition reliance has been placed upon 2007 (35) PTC 95

Cadbury India Limited & Others Vs. Neeraj Food Products. Delay in

approaching the Court would also not be a defence in favour of defendant

No. 2 and for this proposition reliance has been placed upon AIR 1990 Delhi

19 Hindustan Pencils (P) Ltd. Vs. India Stationary Products Co. and Anr.;

the reasons as explained in the plaint; make out a case as to why inspite of all

efforts to get criminal cases registered against the defendants plaintiff had

failed because of the connivance of the higher authorities with defendant

No. 2.

7 Arguments have been refuted by Mr. S.K. Bansal, Advocate appearing

for defendant No. 2. He has reiterated the averments which have been taken

in his defence. It is pointed out that a party who approaches the Court with

unclean hands is not entitled to any discretionary relief. There being an

active concealment on the part of the plaintiff, no interim order could have

been granted in his favour. To support his submission reliance has been

placed upon (2013) 11 SCC 531 Bhaskar Laxman Jadhav & Others Vs.

Karamveer Kakasaheb Wagh Education Society and Others. On the

question of trans-border reputation of the plaintiff having travelled to India,

it is pointed out that the Courts have time and again held that while dealing

with an application for an interlocutory injunction, the rights of the plaintiff

have to be protected against an injury but the corresponding need of the

defendant to be protected against injury resulting from its having been

prevented from exercising his legal rights has to be weighed in the scale of

balance. To support this submission, reliance has been placed upon 2005

(30) PTC 471 (Del) QRG Enterprises and Anr Vs. Surendra Electricals and

Others.

8     Arguments have been heard. Record has been perused.

9     Record shows that the plaintiff has a worldwide registration qua the

trademark „COLUMBIA‟. Copies of his registration certificates showing his

registration in India have been placed on record. There are six such

registrations; details of which finds mention in para 16 of his plaint.

Admittedly there is a disclaimer prevailing qua three such registrations i.e.

registration No. 626883 dated 02.05.1994, registration No. 1380753 dated

30.08.2005 and registration No. 1585010 dated 27.07.2007. The other three

registrations are alone clear. They have no disclaimer pending against them.

This position is admitted. Thus the first registration which is in favour of the

plaintiff is registration NO. 1585010 dated 27.07.2007 which is a registration

in class 18 and class 25. While dealing with this application, this Court is

largely concerned with the items contained in clause 25. This registration is

in favour of the plaintiff qua clothing, headwear and footwear. It dates back

to 27.07.2007. Para 16 of the plaint additionally states that these registrations

are valid and subsisting as on date.

10 This position is not quite correct. Admittedly there are disclaimers

qua three such registrations and as noted supra, they have been admitted by

the plaintiff. This has however not been detailed by the plaintiff in his

plaint. In para 40 an evasive statement has been made that in order to

the Registrar of Trademarks which opinion was in favour of the plaintiff.

This is the end of the matter. There is no further details of any disclaimer;

para 40 relied upon in the plaint does not disclose that a disclaimer had been

set up by defendant No. 2 or that the disclaimer is alive and as such the

aforenoted three registrations are not clear; there being a disclaimer

admittedly attached to them. This in the view of this Court is a concealment

which has been made by the plaintiff for which he has no explanation. The

second suppression of fact which amounts to a concealment of a material

fact is the fact that defendant No. 2 had applied for registration of his mark.

Vide TM application No. 1126256, he had been granted the status of

„pending‟ in W.P. (C) No.5866/2013 which had been disposed of on

16.07.2014. This order had directed the trade mark authorities to treat the

application of defendant No. 2 as per its original seniority i.e. from the date

of its filing. Defendant No. 2 in his list of documents on the first page has

filed the Court order dated 16.07.2014 which reflects that this order had been

uploaded in the Trade Mark Registry on that date itself. The present suit has

been filed on 19.07.2014. Amended plaint had been filed on 16.10.2014.

The status of this TM application that it had reverted to a „pending‟ status

and was no longer „abandoned‟ had not been disclosed by the plaintiff. This

has been admitted by the plaintiff only in his replication. The fact that the

TM Application of defendant No.2 was "pending" on the date of the filing of

the suit and was not abandoned is also in the view of this Court an active

concealment which would perhaps dis-entitle the plaintiff to a discretionary

relief.

11 The Courts have time and again noted that the conduct of a party who

is seeking a discretionary relief from the Court weighs largely in the mind of

the Court while dealing with such a prayer. Where a party is guilty of

suppression of a material fact, he may not be entitled to such a relief.

12 The Apex Court had an occasion to deal with such a situation in

(2010) 14 SCC 38 Ramjas Foundation Vs. Union of India and relevant

extract of which reads herein as under:-

21. The principle that a person who does not come to the court with clean hands is not entitled to be heard on the merits of his grievance and, in any case, such person is not entitled to any relief is applicable not only to the

petitions filed under Articles 32, 226 and 136 of the Constitution but also to the cases instituted in others courts and judicial forums. The object underlying the principle is that every court is not only entitled but is duty- bound to protect itself from unscrupulous litigants who do not have any respect for truth and who try to pollute the stream of justice by resorting to falsehood or by making misstatement or by suppressing facts which have a bearing on adjudication of the issue(s) arising in the case."

13 The plaintiff has a registration of the year 2007 in India. He has

however in his entire volume of documents (running into three parts) has not

been able to show any advertisement which he has effected in India wherein

his product has been advertised or he is selling the same i.e. shoes under the

trade name „COLUMBIA‟. It appears that the plaintiff has no market in

India. He may be a well known name in foreign countries but his presence in

India has not been depicted; it cannot be seen from any of the documents

which had been filed by the plaintiff. His trans-border reputation, if any, has

not travelled to India. His registration is in class 25. Class 25 relates to

sportswear, apparel and footwear. Even in the plaint, the averment of the

plaintiff is that his customers who are mountaineers and do trekking buy his

shoes aboard and travel to India and on seeing similar / identical shoes of a

cheaper brand, are prejudiced. This by itself would not be reason enough for

them to dis-continue to buy the shoes of the plaintiff which are also more

heavily priced than the shoes of defendant No. 2 which are only priced at

Rs.500-600/- in comparison with the shoes of the plaintiff which sell at

Rs. 3,000/- a pair. Moreover, what is the percentage of that customer

(mountaineers) also remains a mystery.

14 At the cost of repetition, these averments are not supported by any

document; although the plaintiff has filed documents showing his returns

which he has filed before the Registrar of Companies (ROC) under the name

of his company i.e. Columbia Sportswear Company Pvt Ltd. yet these

balance sheets and returns before the ROC do not reflect that he had sold any

footwear under the trade name „COLUMBIA‟ in India. On this score,

queries had been put to the learned counsel for the plaintiff but he has no

answer.

15 Per contra, the defendant‟s documents although also not be too many

yet do reflect that the defendant has an established presence in India.

Advertisement of his product from the year 2002 showing sale of footwear

under the name „COLUMBIA‟ with the details of distributors are evident.

The invoices filed by him reflect the sales made by defendant No. 2 to

various distributors in India which show that defendant No. 2 company

(Galaxy Footwear Pvt. Ltd.) is selling „COLUMBIA‟ shoes. Various

documents have been filed by defendant No. 2 which reflect that

„COLUMBIA‟ shoes have been purchased from the year 2002-2003 onwards

by distributors one of whom is Indian Adopter who had purchased gents

shoes under the name „COLUMBIA‟. (page 211 of the documents filed by

defendant No. 2). The invoice dated 03.01.2004 is another such document.

Although, the advertisements of defendant No. 2 reflects that he is selling

shoes under the brand name not only of „COLUMBIA‟ but also of

„COLUMBUS‟ and „COPPER LAND‟ which are all footwear of defendant

No. 2 company yet this Court is of the view that he cannot, at this stage, be

restrained from using the trade name „COLUMBIA‟ as he has been able to

prima-facie show his active presence in the market from the year 2002 which

has been reflected not only through his advertisements but also his sale

invoices. His sale figures which include sale of "COLUMBIA" shoes is also

on record. Thus, defendant No. 2 has been able to establish that he is selling

shoes under the trade name „COLUMBIA‟ from the year 2002. His

advertisement campaign is also since that period. The registration of the

plaintiff is dated 27.07.2007.

16 At the cost of repetition, the plaintiff has failed to discharge (through

any documentary evidence) his burden showing that his presence in India has

been active or that he is recognized in the Indian market. There is not a

single sale document filed by him to evidence that he has sold any shoe

under the trade name „COLUMBIA‟ in India.

17 There is no doubt to the settled legal proposition that reputation and

goodwill in a business generally attaches with the trade name adopted by a

business house and such a reputation or goodwill has to be protected by the

Court; copying of the name by a competitor is likely to cause an injury to the

business of the original party which the other party is not entitled to do so.

However the legal right which is asserted by the plaintiff and the

corresponding need projected by the defendant must be weighed while

determining where the balance of convenience lies.

18 In 2002 (24) PTC 121 (SC) Mahendra and Mahendra Paper Mills Ltd.

Vs. Mahendra and Mahendra Ltd., the Court while dealing with such a

situation had made an observation which would be relevant in the context of

this case.

"The Court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in

which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted." 19 In the instant case, defendant No. 2 has admittedly been in the

business since the year 2002 (although he has projected that he is in business

since 1995). The documentary evidence supports the fact that he is in active

business and selling shoes under the trade name „COLUMBIA‟ since the

year 2002 onwards. The plaintiff has failed to show that he has sold any

footwear under the trade name „COLUMBIA‟ in India.

20 The plaintiff has failed to make prima-facie case. Balance of

convenience in fact lies in favour of defendant No. 2. Irreparable loss and

injury will be suffered by defendant No. 2 in case he is not allowed to

continue his trade which is legal.

21 I.A. No.23361/2014 (under Order XXXIX Rule 4 of the Code) filed

by defendant No. 2 is allowed.

22 I.A. No. 16583/2014 filed by the plaintiff under Order XXXIX Rules