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Nuvoco Vistas Corporation ... vs Jk Lakshmi Cement Limited & Anr
2019 Latest Caselaw 2021 Del

Citation : 2019 Latest Caselaw 2021 Del
Judgement Date : 15 April, 2019

Delhi High Court
Nuvoco Vistas Corporation ... vs Jk Lakshmi Cement Limited & Anr on 15 April, 2019
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*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     CS(COMM) 256/2017

      NUVOCO VISTAS CORPORATION LIMITED ..... Plaintiff
                  Through: Mr. Chander M. Lall, Senior
                           Advocate with Ms. Nancy Roy
                           and Mr. Dhruv Nayyar,
                           Advocates.

                         versus

      JK LAKSHMI CEMENT LIMITED & ANR ..... Defendants
                   Through: Mr. Akhil Sibal, Senior
                            Advocate with Ms. Tanvi Misra
                            and Mr. Sanchith Shivakumar,
                            Advocates.

                                  Reserved on: 25th March, 2019
%                                 Date of Decision:15th April, 2019

      CORAM:
      HON'BLE MR. JUSTICE MANMOHAN

                          JUDGMENT

MANMOHAN, J:

I.A. No. 4261/2017, 5564/2017

1. While I.A. No. 4261/2017 has been filed by the plaintiff under Order 39 Rules 1 & 2 CPC, I.A. 5564/2017 has been filed by the defendants under Order 39 Rule 4 CPC for vacation of the ex parte ad interim order dated 11th April, 2017 passed by the learned Predecessor of this Court.

2. It is pertinent to mention that the present suit has been filed for injunction and damages for infringement of trademark, passing off, and unfair trade competition against the defendants. The prayer clause in the plaint is reproduced hereinbelow:-

―A. The Defendants, their directors, principals, partners, officers, employees, agents, distributors, suppliers, affiliates, subsidiaries, franchisees, licensees, representatives and assigns be restrained by a permanent injunction from :

i. Manufacturing, or authorizing the manufacture, distributing, exporting, selling, offering for sale, advertising, promoting, displaying and/or using in any manner whatsoever, the impugned products, as mentioned in Paragraph Nos. 34, 43 and 44 of the Plaint, bearing the marks CONCRETA and CONCRETA (label) and/or any other product bearing any mark and/or label which is identical and/or deceptively and confusingly similar to the Plaintiff's registered trade mark CONCRETO, as tabulated under Paragraph No. 8 of the Plaint, as a trade mark or part of a trade mark, trade name or a part of trade name, name of business concern or part of the name, of business concern, domain name or a part of domain name or in any other manner whatsoever, in relation to any goods or services, or in relation to any promotional, marketing or advertising material or any other material used or intended to be used for labelling or packaging or for advertising any goods or services, which would amount to infringement of the registered trade mark of the Plaintiffs;

ii. Manufacturing, or authorizing the manufacture, distributing, exporting, selling, offering for sale, advertising, promoting, displaying and/or using in any manner whatsoever, the impugned products, as

and 44 of the Plaint, bearing the marks CONCRETA and CONCRETA (label) and/or any other product bearing any mark and/or label which is identical and/or deceptively and confusingly similar to the Plaintiff's trade marks, as tabulated under Paragraph Nos. 8, 10 and 11 of the Plaint, as a trade mark or part of a trade mark, trade name or a part of trade name, name of business concern or part of the name of business concern, domain name or a part of domain name or in any manner whatsoever, in relation to any goods or services, or in relation to any promotional, marketing or advertising material or any other material used or intended to be used for labelling or packaging or for advertising any goods or services, which would amount to passing off of the Plaintiff's marks;

B. The Defendants, their directors, principals, partners, officers, employees, agents, distributors, suppliers, affiliates, subsidiaries, franchisees, licensees, representatives and assigns be ordered by a decree of mandatory injunction directing that they at their own expense:

(i) Recall all the stocks of the impugned products and all marketing, promotional and advertising materials that bear or incorporate the impugned marks and/or any other mark which is identical and/or deceptively and confusingly similar to the Plaintiff's trade marks which has been manufactured or marketed or distributed or sold in the market, including on online retail.

(ii) Deliver to the Plaintiff's attorneys or representatives for destruction all the stocks of the impugned products and all material

including labels, packaging, brochures, business cards, business envelopes, letterheads, labels, cartons, publicity material such as pamphlets, hoardings, signboards, stationery etc. in its possession or under its control, bearing the impugned marks or any other mark identical or deceptively and confusingly similar to the Plaintiff's registered trade marks;

(iii) The Defendants be ordered by a decree of mandatory injunction to withdraw trade mark applications for the impugned mark, as tabulated in Paragraph No. 34 and provide duly endorsed proofs of the said withdrawals to the Plaintiff;

(iv) Disclose to the Plaintiff any other application for registration of the impugned marks filed by the Defendants;

C. The Defendants be called upon to allow inspection of their accounts to assist in ascertaining the amount of profits made by them and/or damages including exemplary and penal damages suffered by the Plaintiff on account of the Defendants' offending activities and a decree is passed in favor of the Plaintiff and against the Defendants for the amount found due.

D. Cost of the suit be awarded to the Plaintiff; and

E. Any other relief which this Hon'ble Court thinks fit and proper in the circumstances of the case is allowed in favor of the Plaintiff and against the Defendants.‖

ARGUMENTS ON BEHALF OF THE PLAINTIFF

3. Mr. Chander M. Lall, learned senior counsel for the plaintiff stated that the plaintiff had been the registered proprietor of the word mark CONCRETO since 30th November, 2005. He stated that the

plaintiff was the registered proprietor of other marks consisting of labels in which CONCRETO was the most essential and prominent part. He stated that the plaintiff had a registration for a label with a distinctive slanting roof design also. The list of trade mark registrations relied upon by the plaintiff in paragraph 8 of the plaint are reproduced hereinbelow:-

         Trade Mark             Date           Number         Class
      CONCRETO               30/11/2005        1402591        19
      (word)

Goods: Cement and other building materials.

20/12/2002 1160537 19

Goods: Cement, building materials, included in class 19

24.03.2011 2120892 19

Goods: Cement

24.03.2011 2120893 19

Goods: Cement

20/12/2002 1160536 16

Goods: Paper and paper articles, card, board and card board articles, printed matters, newspapers, periodicals, included in class 16

03/10/2012 2404960 16

Goods:

Paper, cardboard and goods made from these materials, not included in other classes; printed matter; bookbinding material; photographs; stationery; adhesives for stationery or household purposes; artistic; materials; paint brushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); high density poly ethylene (HDPE) bags used for packaging; playing cards; printers; type; printing blocks; printing blocks for use on high density poly ethylene (HDPE) bags

03/10/2012 2404963 16

Goods:

Paper, cardboard and goods made from these materials, not included in other classes; printed matter; bookbinding material;

photographs; stationery; adhesives for stationery or household purposes; artistic; materials; paint brushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); high density poly ethylene (HOPE) bags used for packaging; playing cards; printers; type; printing blocks; printing blocks for use on high density poly ethylene (HDPE) bags

4. Learned senior counsel for the plaintiff contended that the plaintiff was the prior user of the word mark and the labels for CONCRETO and had been using it since 2002. He stated that the plaintiff had spent huge amounts on the advertisement and promotion of its cement under the mark CONCRETO and had earned huge revenues on account of sale of its cement products under the mark CONCRETO. He further stated that the plaintiff had initiated and obtained orders against third parties for infringement of its trademark CONCRETO. Consequently, according to him, the brand CONCRETO, had acquired the status of a well-known mark.

5. Learned senior counsel for the plaintiff stated that the defendant had adopted a deceptively and confusingly similar mark CONCRETA recently, for identical goods, i.e. cement. He pointed out that the labels of the impugned mark CONCRETA also bore close resemblance with one of the labels of the plaintiff‟s prior brand CONCRETO. A comparison of the labels relied upon by learned senior counsel for the plaintiff is reproduced hereinbelow:-

Plaintiff's label mark Defendants' impugned mark

6. He stated that bad faith of the defendant was apparent, as the defendants were in the same trade as that of the plaintiff and therefore the defendant should be deemed to have known about the plaintiff‟s brand CONCRETO and the plaintiff‟s slanting roof design. He submitted that in cases of bad faith, courts have to see the items of similarity rather than dissimilarity and therefore the use of the mark „JK‟ would not absolve the defendant.

7. Learned senior counsel for the plaintiff contended that the defendants‟ defence in the written statement that its brand „JK‟ was so popular that it had no incentive to associate itself with the plaintiff, could not be accepted as even innocent infringement cannot be condoned. In support of his contention, he relied on the judgment of Laxmikant V. Patel vs. Chetanbaht Shah, [2002(24) PTC 1].

ARGUMENTS ON BEHALF OF THE DEFENDANTS

8. Per contra, Mr. Akhil Sibal, learned senior counsel for the defendants stated that the plaintiff was not entitled to any rights in the impugned mark as the same was wholly descriptive and lacked distinctiveness. He stated that the word „Concrete‟ was interchangeable with "cement" and was used descriptively by many manufacturers in the industry in relation to their products. He pointed out that the word „Concreto‟ was the word for "cement" in a number of languages such as Spanish, Portuguese, Italian, etc.

9. He further stated that no exclusive right can be vested in the use of the word „concrete‟. He stated that a number of bonafide third parties were using the impugned or similar word mark and the same was an indication that the said word could not be monopolised by any one player. He submitted that in J.R. Kapoor Vs. Micronix India, 1994 Supp (3) SCC 215, the Supreme Court has held that a prefix which is a common or general name, which is descriptive of the product, cannot be monopolised.

10. Learned senior counsel for the defendants stated that the plaintiff was not the owner of five out of the seven asserted marks in paragraph 8 of the plaint, in which the word „LAFARGE‟ was mentioned. He stated that by operation of the Competition Commission of India (hereinafter referred to as "CCI") order dated 02nd February, 2016, which sought to divest the business of the plaintiff‟s predecessor, LAFARGE, and which resulted in the creation of present plaintiff, the latter was not entitled to ownership in the

impugned five marks as they used the word LAFARGE. The relevant portion of Schedule I of the Supplementary order dated 02nd February, 2016, passed by the CCI and relied upon by learned senior counsel for the defendants is reproduced hereinbelow:-

―4. Exclusions from Divestment Business: i. Brands listed at Appendix III, which are (A) under the proprietorship of Lafarge India and use the word Lafarge (hereinafter called as ―Category I excluded brands‖); and (B) under the proprietorship of Lafarge and/or other group entities of Lafarge and are currently licenced to Lafarge India (hereinafter called as ―Category II excluded brands‖), are excluded from Divestment Business provided that subject to the requirement o the Approved Purchaser, the Parties shall enter into a transitional arrangement with the Approved Purchaser for use of such brands for a certain mutually agreed duration.‖ (emphasis supplied)

11. Learned senior counsel for the defendants stated that the plaintiff in the present suit had set up a false case of ownership and not that of a licensee or a permitted user. He contended that in view of the divestment order of CCI, the plaintiff lacked the requisite locus standi to institute the present suit, as the plaintiff could have, at best, been a permitted user by virtue of a Share Purchase and Transitional Agreement dated 10th September, 2016 (hereinafter referred to as "Transitional Agreement, 2016") and the remedy against infringement was only available to a party that had proprietorship rights in the marks.

12. Learned senior counsel for the defendants averred that the plaintiff had suppressed various facts relating to the maintainability of the present dispute. He stated that the plaintiff had suppressed portions of the CCI order dated 02nd February, 2016, in terms of which, the plaintiff had been explicitly disentitled from proprietorship over the five impugned marks. He stated that the plaintiff had failed to disclose the Transitional Agreement, 2016 which gave the plaintiff the alleged right to use the impugned marks. He submitted that it is a well-settled proposition of law that a party seeking an ex parte injunction must be held to a standard of "uberrima fides" or "utmost good faith". In support of his submission, he relied on Morgan Stanley Mutual Fund vs. Kartick Das, (1994) 4 SCC 225.

13. Learned senior counsel for the defendants stated that the plaintiff had not shown any use of the remaining two CONCRETO word mark registrations, owned by the plaintiff. He contended that the comparison of the plaintiff‟s mark CONCRETO and the defendants‟ mark CONCRETA was of a label mark, of which the plaintiff was not the owner.

14. Learned counsel for the defendants stated that there was no likelihood of confusion between the plaintiff‟s and the defendants‟ products as the two competing marks pertain to different products. He pointed out that the plaintiff‟s product was Portland Slag Cement which was used in mass concreting application such as dams and construction in coastal areas, while the defendants‟ product was Portland Pozolona Cement which was used in casting works and

preventing cracks. He stated that the two marks operate in entirely different trade channels and the plaintiff‟s product was sold solely in East India, while the defendants‟ product was marketed in Rajasthan only.

15. Learned counsel for the defendants further stated that the plaintiff was using „Lafarge‟ to indicate the source of the product, while the defendants‟ displayed its product with a „hammer and hand‟ logo along with the words „HEAVY DUTY CEMENT‟.

REJOINDER ARGUMENTS ON BEHALF OF THE PLAINTIFF

16. In rejoinder, learned senior counsel for the plaintiff stated that the plaintiff was a subsidiary of LAFARGE SA, a company incorporated under the laws of France and during the said time, two trade mark registrations were obtained in the name of LAFARGE SA for the label mark LAFARGE CONCRETO bearing No.1258433. Subsequently in 2014, due to the global merger of LAFARGE SA and Holcim, the new entity LafargeHolcim was directed by the CCI vide order dated 30th March, 2015 and further vide modified order dated 02nd February, 2016, to divest its entire business in India. He stated that in compliance with the directions of CCI, LafargeHolcim divested Lafarge India Limited and consequently, Lafarge India Limited became a hundred per cent subsidiary of M/s. Nirchem Ltd. Upon change of name of Lafarge India Limited, it is now known as Nuvoco Vistas Corp. Ltd. - the plaintiff. He stated that the aforementioned facts had been disclosed by the plaintiff in paragraph 9 of the plaint.

17. In any event, learned senior counsel for the plaintiff submitted that the CCI orders dated 30th March, 2015 and 2nd September 2016 had no relevance in the present suit as, they were with regard to the mark LAFARGE and not the stand-alone word mark or stylized word mark CONCRETO. He stated that the defendants had themselves admitted in the written statement that the plaintiff had stand-alone registrations for the mark CONCRETO. He further stated that the plaintiff had been using the mark CONCRETO as the most prominent part of its packaging and had used LAFARGE only as a corporate name.

18. Learned senior counsel for the plaintiff filed an additional affidavit dated 30th November, 2018 of the authorized representative of the plaintiff company to clarify that the plaintiff had proprietorship rights in the CONCRETO mark as per the Transitional Agreement, 2016. The relevant portion of the said affidavit is reproduced hereinbelow:-

―3. I state that paragraph 8 of the plaint asserts that the Plaintiff is the owner of the trade mark registrations mentioned in the said paragraph of the plaint. I state that at the time of filing of the present suit, the Plaintiff was the registrant of all of the registrations mentioned in paragraph 8 of the plaint. Even today, as per the records of the Trade Marks Registry, the Plaintiff continues to be the registrant of the said registrations.

4. I state that the Plaintiff was a subsidiary of Lafarge SA. Owing to the combination of Lafarge SA and Holcim Limited, the Competition Commission of India vide order dated 30th March 2015 and further order dated 2nd February

2016 and further order dated 7th September 2016 (hereinafter referred to as CCI order) directed the divestment of the business of the said combination.

5. As per the order of the Competition Commission of India, the Divestment business was to include all tangible and intangible assets (including intellectual property rights) related to and/or being used in connection with the Divestment Business (See para 33(i)).

6. However, the CCI Order provided for a list of exclusions from the Divestment Business. This is provided in para 4 of the CCI order which categorically provides that the brands listed at Appendix III, which are (A) under the proprietorship of Lafarge India (Plaintiff herein) and use the word Lafarge (category I excluded brands); and (B) under the proprietorship of Lafarge and/or other Group entities of Lafarge and are currently licensed to Lafarge India (Plaintiff herein). The same paragraph also provides that ―subject to requirements of the Approved Purchaser the Parties shall enter into a transitional arrangement with the Approved Purchaser for use of such brands for a certain mutually agreed duration.‖

7. The aforementioned Appendix III does not mention the word mark registration for the mark CONCRETO bearing No. 1402591 in Class 19 and CONCRETO stylized bearing No. 2120892 in Class 19. These two registrations were and continue to be owned by the Plaintiff herein.

8. Pursuant to the CCI Order, Lafarge Holcim and Nirchem entered into a share purchase and transitional agreement on 4th October 2016. Certain definitions in the said Share Purchase Agreement are relevant and are reproduced below:

(i) Closing date being the 15thBusiness Day following the date of thisAgreement;

(ii)Corporate marks means (A) any trade or service name or mark, business name, logo or domain name that is used or held by any member of the Sellers Group (including, for the avoidance of doubt, the excluded brands under Appendix III to Schedule I of the Supplementary order and the trade marks listed in Schedule 5), in each case to the extent used in trade in India by the Company in the 12 months before closing date; or (B) any mark, name or logo which, in the reasonable opinion of the Sellers is substantially or confusingly similar to any of them (together, the Corporate Marks);

(iii) Lafarge Logo means the stylized form in which the Lafarge Name is used on products by the Company in India as at the Closing Date;

(iv) Lafarge Mark means the Lafarge Name and Lafarge Logo together;

(v) Lafarge Name means name Lafarge.

(vi) Phase out Period means after the Closing Date and in any event no later than the end of 18 months following the Closing Date.

9. As per 15.1 (b)(i) of the said Share Purchase Agreement, the Plaintiff was allowed to use the Corporate Marks containing Lafarge during the Phase-Out Period. In compliance with this, the Plaintiff has already changed its name to Nuvoco Vistas Corporation Limited as stated in the plaint.

10. It is submitted that the Plaintiff is the absolute owner of the trade mark "CONCRETO" and other brands which are not relevant to the present suit. In recognition of the Plaintiffs ownership of the trade mark CONCRETO, as

per clause 15.1(b) of the Share Purchase Agreement the sellers (LafargeHolcim) were not allowed to use the trade mark "CONCRETO" in addition to other trade marks owned by the Plaintiff such as "PSC" INFRACHEM" "SAMP ARK" and "DURA GUARD".

11. As per the aforementioned Share Purchase Agreement the 18 months' Phase Out period ended on 25th March 2018. During this period, the Plaintiff continued to be the owner of the registrations mentioned in paragraph 8 of the plaint and was duty bound to initiate appropriate legal action against third party violations of the said registrations, as in the present case. This is as per para 35 of the CCI order which provides that until the closing date, the parties were to take such steps as would be necessary to maintain the economic viability, marketability and competitiveness of the Divestment Business, minimize the loss of competitive potential of the Divestment Business and to prevent the destruction, removal, wasting, deterioration, sale, disposition, transfer (including creation of encumbrance) or impairment of the assets related to the Divestment Business, except as would occur in the ordinary course of business. Relevant pages of the aforementioned Share purchase agreement are annexed hereto as Annexure A. I state that the contents of the said Share purchase Agreement are extremely confidential and the Plaintiff is only filing the relevant pages of the said Agreement for the perusal of this Hon'ble Court.

12. The Plaintiff is currently using the trade marks "CONCRETO" "PSC" INFRACHEM" "SAMP ARK" and "DURA GUARD" amongst others, without the word Lafarge and is the exclusive owner of these trade marks.

13. In the current year 2018 the Plaintiff has now changed its packaging in relation to the trade mark CONCRETO as under:

In the submission of the Plaintiff, as can be seen from the facts above and the facts in the plaint, CONCRETO has always been and continues to be the most essential part of the Plaintiffs branding. The use of CONCRETA by the Defendants is and has always been clearly mischievous and infringing.

14. It is submitted that since the present suit concerns the use of the trade mark CONCRETA which is deceptively and confusingly similar to the Plaintiffs registered trade mark CONCRETO, the Plaintiff did not consider it necessary to further explain the status of the Lafarge trade marks and the impact of the CCI order in relation to the trade mark Lafarge. The Plaintiff believes that they have made a sufficient disclosure in paragraph 9 of the plaint. It is reiterated that the Plaintiff has always been the exclusive owner of the trade mark CONCRETO, which is the subject matter of the present suit, prior to the CCI order and continues to be the exclusive owner till date. The seller (LafargeHolcim) has no right, title or interest in the trade mark CONCRETO whatsoever.‖ (emphasis supplied)

19. Learned counsel for the plaintiff stated that on the date of filing of suit and even today the plaintiff is the owner of all the seven marks mentioned in paragraph 8 of the plaint. He stated that the plaintiff had placed on record Registration Certificates for all seven marks.

20. Learned senior counsel for the plaintiff emphasized that the defendants had not disclosed any sales or use of the impugned mark CONCRETA and had already changed their brand name to PLATINUM and had been using the same for their cement products.

SUR-REJOINDER         ARGUMENTS         ON      BEHALF       OF      THE
DEFENDANTS

21. Learned senior counsel for the defendants stated that the defendants had issued a notice dated 03rd August, 2017 to the plaintiff to produce the Transitional Agreement, 2016, in terms of which the plaintiff had claimed proprietorship over the CONCRETO marks, but the plaintiff, vide its reply to notice dated 01st September, 2017, had refused to provide the said agreement to the defendants claiming that the said Agreement was completely irrelevant to the present proceedings as the trade mark LAFARGE was not the subject matter of the present suit. He contended that filing of the Transitional Agreement, 2016 at the rejoinder stage was irrelevant and should not be taken into account by this Court.

22. He reiterated that on the date of filing of the suit the plaintiff was not the owner of five out of the seven asserted marks and the statements made by the plaintiff in the plaint and the affidavit dated

30th November, 2018 were blatantly false. He contended that in terms of the Transitional Agreement, 2016, the plaintiff had no right to either use the LAFARGE stand-alone marks or any composite/device mark which contained the mark LAFARGE, like LAFARGE CONCRETO, after the „Closing date‟ which period, according to him, ended on 25th September, 2016. In support of his contention, the learned senior counsel for the defendants relied on the definition of "Closing date" and Clause 15 of the Transitional Agreement, 2016 annexed with the plaintiff‟s affidavit dated 30th November, 2018. The relevant portion of the Transitional Agreement, 2016 relied upon by learned senior counsel for the defendants is reproduced hereinbelow:-

"Closing date being the 15th Business Day following the date of this Agreement;

Company means Lafarge India Limited;

xxx xxx xxx Phase-Out Period means after the Closing Date and in any event no later than the end of 18 months following the Closing Date;

xxx xxx xxx Purchaser means[.] Limited, [a wholly-owned subsidiary of Nirma Limited which is being incorporated under the laws of India];

xxx xxx xxx Seller means Financiere Lafarge SAS (Financiere Lafarge) and Holderind Investments Limited (Holdeerinied), each of them a Seller, xxx xxx xxx Subsidiary means Lafarge Eastern India Limited;

15. CHANGES OF NAME 15.1 The Purchaser, the company and the subsidiary (as appropriate) shall:

a) as soon as reasonably practicable after the Closing Date and in any event no later than 30 Business Days thereafter, procure that the name of the Company and the Subsidiary to the extent that it uses, consists of or incorporates the word "Lafarge" is changed to a name which does not include that word or any name which, in the reasonable opinion of the Sellers is substantially or confusingly similar; and

b) after the Closing Date and in any event no later than the end of 18 months following the Closing Date (the Phase-Out Period):

i. cease using or displaying (A) any trade or service name or mark, business name, logo or domain name that is used or held by any member of the Sellers Group (including, for the avoidance of doubt, the excluded brands under Appendix III to Schedule I of the Supplementary Order and the trade marks listed in Schedule 5), in each case to the extent used in trade in India by the Company in the twelve (12) months before the Closing Date; or (B) any mark, name or logo which, in the reasonable opinion of the Sellers is substantially or confusingly similar to any of them (together, the Corporate Marks); and

ii. remove or cover any Corporate Mark on all signs, billboards, advertising materials, telephone listings, labels, stationery, office forms, trucks, packaging or other properties or materials of the Company or the Subsidiary;

provided that if the Sellers become aware of any location where Corporate Marks appear following the Phase-Out Period, the Sellers shall inform the Purchaser and the Purchaser shall remove such Corporate Marks within 10 Business Days thereafter,

and the, parties acknowledge that each of "CONCRETO","PSC", "INFRACEM", "SAMPARK" and "DURA GUARD", in each case on its own, is not a Corporate Mark, and the Sellers shall not use any of them as a trade mark in India.

15.2 During the Phase-Out Period, subject to clause 15.3, the Company shall be permitted to continue using the Corporate Marks, including the name "Lafarge" (the Lafarge Name) and the stylized form in which the Lafarge name is used on products by the company in India as at the Closing Date (the Lafarge Logo) (together, the Lafarge Mark), in India (and not for export) on the Company's products, packaging, promotions and advertising, in each case solely in the manner and to extent used at the Closing Date. 15.3 The Purchaser:

(a) acknowledges that all goodwill associated with the use of the Corporate Marks by the Company (or its Affiliates) shall vest in the Sellers (or their Affiliates), and that the Company and its affiliates are not entitled to any rights, title or interest in or to any of the Corporate Marks except as granted under this clause 15 in respect of the phase-out period. The Purchaser shall not, and shall ensure that its Affiliates (Including, with effect from the Closing Date, the company) shall not, make any claim or allegation in respect of any of the Corporate Marks that is inconsistent with this

Clause 15;

(b) shall notify the Sellers promptly of any infringement or improper use by any third party of any Corporate Mark of which Purchaser or its Affiliates becomes aware, and agrees that the Sellers shall have sole discretion and control with regards to (and the benefit of any remedies recovered in respect of) any proceedings related to such infringement or improper use, and the Purchaser shall, if requested by Sellers ensure that its Affiliates (including, with effect from the Closing Date, the Company) assist the Sellers in relation to any such proceedings and shall in no circumstances make any admissions or settle any action in connection with such infringement or improper use;

(c) shall ensure that any use of the Corporate Marks is

(i) Solely in the manner and to the extent used at the Closing Date;

(ii) Not combined with any other trade mark except with the prior written approval of the Seller (Such approval not to be unreasonably withheld or delayed, provided that such use would not be detrimental to the reputation of the Seller and the "Lafarge" brand), it being acknowledged that such approval shall be deemed given in respect of such use of the Lafarge Logo (in the same proportion but different size(s)) combined with one of the following marks : "NIRMA", "NIRMAX", "NIMA" or ―NIRMAN" and

(iii) Subject to standards of quality and specifications that conform to or exceed those quality standards and operational specifications currently used by Seller and that otherwise conform with all

applicable laws; and

(d) shall pay to the sellers an amount equal to any and all Losses arising out of or relating to the Purchaser's, the Company's or the Subsidiary's use of the Corporate Marks (including the Lafarge Mark) where such use (i) is in breach of the obligations set out in (a) to (C) above; or (ii) is materially damaging to the reputation of a Corporate Mark or the Sellers or is misleading."

(emphasis supplied)

23. Consequently, learned senior counsel for the defendants stated that the plaintiff had knowingly made a false and misleading statement while obtaining the injunction on 11th April, 2017. He stated that in accordance with Order 39 Rule 4 of CPC, this Court was duty bound to vacate the injunction order dated 11th April, 2017.

COURT'S REASONING

NO FALSE CASE OF OWNERSHIP OR USE HAS BEEN SET UP BY THE PLAINTIFF IN THE PLAINT WITH REGARD TO THE LAFARGE MARKS. IN ANY EVENT, THE PRESENT DISPUTE CONCERNS THE INFRINGEMENT OF THE MARK CONCRETO AND NOT LAFARGE. ALSO KEEPING IN VIEW THE CONFIDENTIAL NATURE OF THE DIVESTMENT PROCESS, THIS COURT IS OF THE VIEW THAT THERE IS SUFFICIENT DISCLOSURE OF FACTS IN THE PLAINT WITH REGARD TO THE PROCEEDINGS AND ORDERS PASSED BY THE CCI

24. Having heard learned senior counsel for the parties, this Court is of the opinion that there is no suppression and no falsehood in the plaint. On the date of filing of the suit, the plaintiff was the owner of

all the seven marks mentioned in paragraph 8 of the plaint. The Registration Certificates at page Nos.15, 18, 21, 26, 29, 33 and 37 of Part-IIIA1 file shows that all the seven registrations, till date, are in the name of the predecessor of the plaintiff, i.e., Lafarge India Private Limited.

25. While it is true that the marks containing the word LAFARGE were excluded from the divestment business by virtue of the CCI orders dated 30th March, 2015 and 02nd September, 2016, yet on the date the plaint was filed, the Phase-Out Period was in subsistence and during this period the plaintiff was permitted to even use the Corporate Marks, including the mark LAFARGE and/or corporate marks containing the mark LAFARGE on the plaintiff‟s products, packaging, promotions and advertising in the manner and to the extent used at the Closing Date, in accordance with Clause 15 of the Transitional Agreement, 2016.

26. It is pertinent to mention that despite lapse of nearly four months, no reply has been filed by the defendants to the plaintiff‟s additional affidavit dated 30th November, 2018.

27. In any event, the present dispute concerns the infringement of the mark CONCRETO and not LAFARGE.

28. In the Transitional Agreement, 2016, it has been admitted between the Seller (LafargeHolcim) and Purchaser (Plaintiff) that the mark CONCRETO is not a Corporate Mark and the Seller (LafargeHolcim) shall not use the mark CONCRETO as a trade mark in India.

29. Even after the Phase-Out Period has expired (which happened during the pendency of the present suit), the plaintiff continues to be the owner and is thus entitled to the exclusive use of the marks CONCRETO bearing the Registration Nos. 1402591 and 2120892.

30. The plaintiff in the past had been using the mark CONCRETO as a prominent part of its packaging and had used LAFARGE only as its corporate name. It is pertinent to mention that the defendants also use their corporate name on their product packaging which acts as an additional source identifier. Consequently, the defendants cannot claim that by previously using the corporate name on the packaging of the product along with its trade mark, the plaintiff had not used its trade mark CONCRETO. The Supreme Court in Ramdev Food Products Pvt. Ltd. vs. Arvindbhai Rambhai Patel & Ors., AIR 2006 SC 3304 has held as under:-

―42. .........What is registered is a logo wherein the words ―Ramdev‖ and ―Masala‖ are prominent. A person may be held to be permitted to carry on business in spices as contradistinguished from the permission to carry on manufacturing goods which are similar to that of the appellant, but in terms of the statutory provisions, the respondents were not legally permitted to sell their products in packages or labels which would be deceptively similar to that of the registered owner of a trade mark. The right to manufacture masala and to sell the same with the registered logo, it will bear repetition to state, was assigned as far back in 1991. If the contention of the Senior Counsel is accepted, the said purpose would be lost. In a case of this nature, therefore, ordinarily an injunction would issue. By reason of interpretation of MOU, trade mark cannot be infringed and further when the right of user has been

relinquished, the same could not have been claimed by the respondents.‖ (emphasis supplied)

31. Furthermore, this Court is of the view that even if there exists a dispute between the plaintiff (Purchaser) and LafargeHolcim (Seller), the same does not confer any right on the defendants to use the impugned mark CONCRETA.

32. Consequently, no false case of ownership or use has been set up by the plaintiff in the plaint. Also keeping in view the confidential nature of the divestment process, this Court is of the view that there is sufficient disclosure of facts, in particular with regard to the proceedings and orders passed by the CCI in the plaint, in particular, in its paragraph 9.

BY VIRTUE OF SECTION 28 OF THE TRADE MARKS ACT, 1999, THE PLAINTIFF HAS THE EXCLUSIVE RIGHT TO USE THE CONCRETO TRADEMARKS

33. This Court is of the view that the plaintiff is the prior user, since 2002, and registered proprietor of the stand-alone word mark CONCRETO bearing Registration No. 1402591 as well as the stylized word mark CONCRETO bearing Registration No. 2120892. There have been no changes to the aforesaid Registration Certificates and no cancellation proceedings have been filed by the defendants with respect to aforesaid marks.

34. Consequently, this Court is of the view that by virtue of Section 28 of the Trade Marks Act, 1999, the plaintiff has the exclusive right

to use the CONCRETO trademarks, inter alia, in respect of the class of goods, i.e., cement, for which they are registered.

AS THE ONLY DIFFERENCE BETWEEN THE PLAINTIFF'S MARK CONCRETO AND THE IMPUGNED DEFENDANTS' MARK CONCRETA IS THAT THE ALPHABET ‗O' HAS BEEN REPLACED WITH AN ‗A' BY THE DEFENDANTS, THIS COURT IS OF THE VIEW THAT THE MOST ESSENTIAL PART OF THE PLAINTIFF'S REGISTERED MARK IS VISUALLY AND PHONETICALLY SIMILAR TO THE DEFENDANTS' MARK AND THE SAME CONSTITUTES INFRINGEMENT.

35. The only difference between the plaintiff‟s mark CONCRETO and the impugned defendants‟ mark CONCRETA is that the alphabet „O‟ in the plaintiff‟s mark CONCRETO has been replaced with an „A‟ by the defendants in the impugned mark CONCRETA. Consequently, this Court is of the view that the most essential part of the plaintiff‟s registered mark is visually and phonetically similar to the defendants‟ mark.

36. Not only are the marks similar, but the goods being sold by both parties are also similar. This Court in Inter IKEA Systems BV vs. Annanya Gautam & Anr., CS(COMM) 1089/2018 decided on 28th September, 2018 has held as under:-

―19. It is settled law that in order to come to the conclusion whether one mark is deceptively similar to another, the broad and essential features of the two marks have to be considered. In Amritdhara Pharmacy Vs. Satyadeo Gupta, 1963 SCR 484, the Supreme Court has held, ―..the overall structural and phonetic similarity of the two names ‗Amritdhara' and ‗Lakshmandhara' is, in our opinion,

likely to deceive or cause confusion. We must consider the overall similarity of the two composite words ‗Amritdhara' and ‗Lakshmandhara'. We do not think that the learned Judges of the High Court were right in saying that no Indian would mistake one for the other. An unwary purchaser of average intelligence and imperfect recollection would not, as the High Court supposed; split the name into its component parts and consider the etymological meaning thereof or even consider the meanings of the composite words as ‗current of nectar' or ‗current of Lakshman'. He would go more by the overall structural and phonetic similarity and the nature of the medicine he has previously purchased, or has been told about, or about which has otherwise learnt and which he wants to purchase.‖

20.Subsequently, in K.R. Chinna Krishna Chettiar Vs. Shri Ambal and Co. &Ors., (1969) 2 SCC 131, the Supreme Court has held, ―the resemblance between the two marks must be considered with reference to the ear as well as the eye. There is a close affinity of sound between Ambal and Andal.

21. McCarthy on Trademarks and Unfair Competition [J. Thomas McCarthy, IV Ed., Clark Boardman Callaghan 2007] under the sub-heading ―Comparing Marks : Differences and Similarities, the treatise states :- ―23.15.... The typical shopper does not retain all of the individual details of a composite mark in his or her mind, but retains only an overall, general impression created by the composite as a whole. It is the overall impression created by the mark from the ordinary shopper's cursory observation in the marketplace that will or will not lead to a likelihood of confusion, not the impression created from a meticulous comparison as expressed in carefully weighed analysis in legal briefs.‖ ―In litigation over the alleged similarity of

marks, the owner will emphasize the similarities and the alleged infringer will emphasize the differences. The point is that the two marks should not be examined with a microscope to find the differences, for this is not the way the average purchaser views the marks. To the average buyer, the points of similarity are more important that minor points of difference. A court should not engage in "technical gymnastics" in an attempt to find some minor differences between conflicting marks. However, where there are both similarities and differences in the marks, there must be weighed against one another to see which predominate.‖ (emphasis supplied)

22. Further, as pointed out by the Apex Court in Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd. (supra), the approach of the Court has to be to examine similarity in the marks and not the dissimilarities.

23. In any event, phonetic and visual similarities are disjunctive and not conjunctive tests. As long as either test is satisfied, similarity stands established in accordance with Section 29 of the Trade Marks Act, 1999.....‖

37. This Court is further of the view that in infringement cases if the essential features of the mark of the plaintiff are adopted by the defendants, then it is immaterial if the get-up, packaging and other writings or marks on the goods or on the packets in which the defendants offer their goods for sale show marked differences, or indicate a trade origin different from that of the registered proprietor of the mark. Since the essential features of the impugned mark CONCRETA are similar to the plaintiff‟s registered trade mark

CONCRETO, the use of the „hammer and hand‟ logo along with the words „HEAVY DUTY CEMENT‟ by the defendants are immaterial, irrelevant and inconsequential. The Supreme Court in Kaviraj Pandit Durga Dutt Sharma vs. Navaratna Pharmaceuticals Laboratories, AIR 1965 SC 980 has held as under:-

―28. The other ground of objection that the findings are inconsistent really proceeds on an error in appreciating the basic differences between the causes of action and right to relief in suits for passing off and for infringement of a registered trade mark and in equating the essentials of a passing off action with those in respect of an action complaining of an infringement of a registered trade mark. We have already pointed out that the suit by the respondent complained both of an invasion of a statutory right under Section 21 in respect of a registered trade mark and also of a passing off by the use of the same mark. The finding in favour of the appellant to which the learned counsel drew our attention was based upon dissimilarity of the packing in which the goods of the two parties were vended, the difference in the physical appearance of the two packets by reason of the variation in the colour and other features and their general get-up together with the circumstance that the name and address of the manufactory of the appellant was prominently displayed on his packets and these features were all set out for negativing the respondent's claim that the appellant had passed off his goods as those of the respondent. These matters which are of the essence of the cause of action for relief on the ground of passing off play but a limited role in an action for infringement of a registered trade mark by the registered proprietor who has a statutory right to that mark and who has a statutory remedy for the event of the use by another of that mark or a colourable imitation thereof. While an action for passing off is a Common Law remedy being in substance an action for deceit, that is, a

passing off by a person of his own goods as those of another, that is not the gist of an action for infringement. The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of the exclusive right to the use of the trade mark in relation to those goods‖ (Vide Section 21 of the Act). The use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement. No doubt, where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a colourable imitation of a trade mark in a passing off action would also be such in an action for infringement of the same trade mark. But there the correspondence between the two ceases. In an action for infringement, the plaintiff must, no doubt, make out that the use of the defendant's mark is likely to deceive, but where the similarity between the plaintiff's and the defendant's mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's rights are violated. Expressed in another way, if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get-up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences, or indicate clearly a trade origin different from that of the registered proprietor of the mark would be immaterial; whereas in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff.

29. When once the use by the defendant of the mark which is claimed to infringe the plaintiff's mark is shown to be

―in the course of trade‖, the question whether there has been an infringement is to be decided by comparison of the two marks. Where the two marks are identical no further questions arise; for then the infringement is made out. When the two marks are not identical, the plaintiff would have to establish that the mark used by the defendant so nearly resembles the plaintiff's registered trade mark as is likely to deceive or cause confusion and in relation to goods in respect of which it is registered (Vide Section 21). A point has sometimes been raised as to whether the words ―or cause confusion‖ introduce any element which is not already covered by the words ―likely to deceive‖ and it has sometimes been answered by saying that it is merely an extension of the earlier test and does not add very materially to the concept indicated by the earlier words ―likely to deceive‖. But this apart, as the question arises in an action for infringement the onus would be on the plaintiff to establish that the trade mark used by the defendant in the course of trade in the goods in respect of which his mark is registered, is deceptively similar. This has necessarily to be ascertained by a comparison of the two marks--the degree of resemblance which is necessary to exist to cause deception not being capable of definition by laying down objective standards. The persons who would be deceived are, of course, the purchasers of the goods and it is the likelihood of their being deceived that is the subject of consideration. The resemblance may be phonetic, visual or in the basic idea represented by the plaintiff's mark. The purpose of the comparison is for determining whether the essential features of the plaintiff's trade mark are to be found in that used by the defendant. The identification of the essential features of the mark is in essence a question of fact and depends on the judgment of the Court based on the evidence led before it as regards the usage of the trade. It should, however, be borne in mind that the object of the enquiry in ultimate analysis is whether the mark used by the defendant as a whole is

deceptively similar to that of the registered mark of the plaintiff.‖ (emphasis supplied)

38. Consequently, this Court is of the view that owing to the registration of the word mark CONCRETO and use of a virtually identical mark CONCRETA amounts to infringement of the plaintiff‟s mark by the defendants.

BAD FAITH IS APPARENT AS THE DEFENDANTS BEING IN THE SAME TRADE OUGHT TO HAVE KNOWN OF THE PLAINTIFF'S BRAND AND MARK CONCRETO.

39. In Laxmikant V. Patel vs. Chetanbhat Shah, 2002 (24) PTC 1, it has been held that even innocent infringement cannot be condoned. However, in the present case, bad faith is apparent as the defendants being in the same trade ought to have known of the plaintiff‟s brand and mark CONCRETO. It is pertinent to mention that the defendants have given no reasons/justification as to why they adopted the mark CONCRETA.

ARGUMENTS OF EQUITY, UBERRIMA FIDES OR UTMOST GOOD FAITH AND CLEAN HANDS CANNOT BE ADVANCED BY ‗RANK INFRINGERS'- LIKE THE DEFENDANTS.

40. This Court is also of the opinion that arguments of equity, uberrima fides or utmost good faith and clean hands cannot be advanced by ‗rank infringers'-like the defendants. It is settled law that he who seeks equity must do equity.

DEFENDANTS' ASSERTION THAT, THE TWO PRODUCTS BEING SOLD BY THE PARTIES OPERATE IN DIFFERENT TRADE CHANNELS AND IN DIFFERENT GEOGRAPHICAL AREAS WITHIN INDIA, IS CONTRARY TO FACTS AND UNTENABLE IN LAW, AS THE PLAINTIFF'S REGISTRATION FOR ‗CEMENT' INCLUDES CEMENT OF ALL VARIETIES AND SUCH REGISTRATION WOULD BE WITHOUT ANY RESTRICTION TO THE TERRITORY TO WHICH IT IS APPLICABLE

41. Moreover, the application filed by the defendants for registration of the CONCRETA label is for cement and is not restricted to a particular type of cement only and, therefore, the defendants cannot claim benefit of the two products being different varieties of cement and/or being sold in different markets. The defendants‟ assertion that, the two products being sold by the parties operate in different trade channels and in different geographical areas within India, is contrary to facts and untenable in law, as the plaintiff‟s registration for „cement‟ would include cement of all varieties and such registration would be without any restriction to the territory to which it is applicable.

MERELY BECAUSE THERE ARE A FEW OTHER PARTIES USING A MARK WHICH IS DECEPTIVELY AND CONFUSINGLY SIMILAR TO THAT OF THE PLAINTIFF'S MARK, THE PLAINTIFF IS NOT ESTOPPED FROM TAKING ACTION AGAINST THE DEFENDANTS

42. This Court is also of the opinion that merely because there are a few other parties using a mark which is deceptively and confusingly similar to that of the plaintiff‟s mark, the plaintiff is not estopped from taking action against the defendants. It is settled law that the plaintiff

is not supposed to initiate legal actions against all such third parties and failure to take action cannot operate as an estoppel or waiver against the plaintiff or amount to acquiescence on the part of the plaintiff. In Pankaj Goel v. Dabur India Ltd., [2008(38) PTC 49 (Del) DB] it has been held as under:-

―22. As far as the Appellant's argument that the word MOLA is common to the trade and that variants of MOLA are available in the market, we find that the Appellant has not been able to prima facie prove that the said ‗infringers' had significant business turnover or they posed a threat to Plaintiff's distinctiveness. In fact, we are of the view that the Respondent/Plaintiff is not expected to sue all small type infringers who may not be affecting Respondent/Plaintiff business. The Supreme Court in NATIONAL BELL VS. METAL GOODS reported in AIR 1971 SC 898 has held that a proprietor of a trademark need not take action against infringement which do not cause prejudice to its distinctiveness. In EXPRESS BOTTLERS SERVICES PVT. LTD. VS. PEPSI INC. & OTHERS reported in 1989 (7) PTC 14 it has been held as under:-

―....To establish the plea of common use, the use by other persons should be shown to be substantial. In the present case, there is no evidence regarding the extent of the trade carried on by the alleged infringers or their respective position in the trade. If the proprietor of the mark is expected to pursue each and every insignificant infringer to save his mark, the business will come to a standstill. Because there may be occasion when the malicious persons, just to harass the proprietor may use his mark by way of pinpricks.... The mere use of the name is irrelevant because a registered proprietor is not expected to go on filing suits or proceedings against infringers who are of no consequence....

Mere delay in taking action against the infringers is not sufficient to hold that the registered proprietor has lost the mark intentionally unless it is positively proved that delay was due to intentional abandonment of the right over the registered mark. This Court is inclined to accept the submissions of the respondent No. 1 on this point....The respondent No. 1 did not lose its mark by not proceeding against insignificant infringers...‖ In fact, in DR. REDDY LABORATORIES VS.

REDDY PAHARMACEUTICALS reported in 2004 (29) PTC 435 a Single Judge of this Court has held as under :-

―..., the owners of trade marks or copy rights are not expected to run after every infringer and thereby remain involved in litigation at the cost of their business time. If the impugned infringement is too trivial or insignificant and is not capable of harming their business interests, they may overlook and ignore petty violations till they assume alarming proportions. If a road side Dhaba puts up a board of ―Taj Hotel‖, the owners of Taj Group are not expected to swing into action and raise objections forthwith. They can wait till the time the user of their name starts harming their business interest and starts misleading and confusing their customers.‖

THE DEFENDANTS THEMSELVES HAVING APPLIED FOR REGISTRATION OF THE MARK CONCRETA CANNOT ASSERT TODAY THAT THE MARK OF THE PLAINTIFF IS DESCRIPTIVE OR THAT IT IS TOO SIMILAR TO THE GENERIC WORD ‗CONCRETE'. THE DEFENDANTS CANNOT APPROBATE AND REPROBATE

43. A perusal of the paper book reveals that the defendants themselves have applied for registration of the mark CONCRETA

claiming exclusive rights therein. Consequently, the defendants cannot assert today that the mark of the plaintiff is descriptive or that it is too similar to the generic word „concrete‟. This Court is of the view that the defendants cannot approbate and reprobate. In P&G Manufacturing v. Anchor Health & Beauty care, FAO(OS) 241/2014 it has been held as under:-

―10. We have weighed the rival contentions aforesaid and do not find any merit in this appeal for the following reasons:-

xxxxx xxxx xxxx xxxx

(xviii) As far as the argument, of the respondent / plaintiff not using the registered trade mark ―ALLROUND‖ owing to having suffixed it with the word ―PROTECTION‖ is concerned, again, the appellants / defendants in the US, obtained registration of the mark ―ALLROUND‖ ―PROTECTION‖ disclaiming the word ―PROTECTION‖. The same is indicative of the appellants/defendants admitted that use of the word ―PROTECTION‖ as a suffix to the use of the registered mark ―ALLROUND‖ not negating the use of the trade mark. The same reasoning, of approbate and reprobate, applied by the learned Single Judge, in our opinion, would apply to this aspect as well.‖

CONCLUSION

44. Keeping in view the aforesaid findings, the I.A. 5564/2017 filed by the defendants under Order 39 Rule 4 CPC is dismissed and the ex parte ad interim order dated 11th April, 2017 is confirmed till the disposal of the present suit. Accordingly, I.A. 4261/2017 stands disposed of.

45. Needless to say, the aforesaid findings are prima facie in nature and shall not prejudice either of the parties at the stage of final hearing of the present suit.

MANMOHAN, J APRIL 15, 2019 js/rn

 
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