Karnataka High Court

S.V.T Products vs S.S Pandian And Sons on 5 April, 2024

                                                          R

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 5th DAY OF APRIL, 2024

                       BEFORE

  THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE

             MFA NO.2680 OF 2023 (IPR)

BETWEEN:
S.V.T PRODUCTS,
AN INDIAN PARTNERSHIP FIRM REPRESENTED
BY ITS PARTNER SRI S MANJUANTH,
S/O LATE RAO, NO 5/2, 4TH CROSS,
LORRY SAND GODOWN STREET,
INDUSTRIAL SUBURB, YESHWANTHPUR,
BENGALURU - 560 022.
                                           ...APPELLANT
(BY SRI JAYAKUMAR S PATIL, SENIOR COUNSEL A/W
 SMT PRIYA, ADVOCATE)

AND:

S.S PANDIAN AND SONS
AN INDIAN PARTNERSHIP FIRM REPRESENTED BY ITS
AUTHORISED PARTNER SRI S SELLA KUMARAN,
INDIAN, HINDU, AGED ABOUT 45 YEARS,
S/O LATE SRI S S PANDIAN,
NO.148, 3RD MAIN ROAD, INDUSTRIAL TOWN,
RAJAJINAGAR, BENGALURU - 560010.
                                        ...RESPONDENT
(BY SRI SIVARAMAN VAIDYANATHAN, ADV. FOR C/R
(CP NO.6247/2023))
     THIS MFA IS FILED UNDER ORDER 43 RULE 1(r) OF CPC,
READ WITH SECTION 5 OF THE KARNATKA HIGH COURT ACT,
1961 AGAINST THE ORDER DATED 11.04.2023 PASSED ON I.A.
NO.2 AND 3/2023 IN O.S.NO. 710/2023 ON THE FILE OF THE
XVIII ADDITIONAL CITY CIVIL JUDGE, BENGALURU CITY,
ALLOWING THE I.A. NOs.2 AND 3 FILED UNDER ORDER XXXIX
RULE 1 AND 2 READ WITH SECTION 151 OF CPC.
                                -2-




     THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 04TH MARCH, 2024 AND COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE
FOLLOWING:


                          JUDGMENT

Asafoetida, (Hing) though bitter in taste is a food

additive. The plaintiff claims that 'asafoetida' sold by him,

under the registered trade mark "HOTEL SPECIAL" in

addition to adding to the taste and the flavor of the food,

has also enhanced the goodwill and the reputation of his

business. However, the asafoetida, sold by the defendant

under the trade mark "SVT HOTEL SPECIAL", which

according to the plaintiff deceptively similar to his

registered trade mark, is making his business experience

bitter.

2. The appellant/defendant is challenging the interim

restraint order under Order XXXIX Rules 1 and 2 of the

Code of Civil Procedure. In short, the defendant is

restrained by temporary injunction from infringing and

passing off the plaintiff's registered trade mark ''HOTEL

SPECIAL" by using an identical and deceptively similar

trade mark "SVT HOTEL SPECIAL" or any other identical,

deceptively/ confusingly similar trade mark in relation to

asafoetida.

3. For the sake of convenience, the parties to the

present appeal are referred to as in the suit.

4. The plaintiff's claim in a nutshell.

- The plaintiff is the proprietor of the registered trade

mark "HOTEL SPECIAL" registered under the Trade Marks

Act, 1999 (for short "Act of 1999"). The plaintiff has been

marketing asafoetida since 1957. The trade mark "HOTEL

SPECIAL" is used to sell a variety of asafoetida since 1993.

The said trade mark is exclusively associated and

identified with asafoetida sold by the plaintiff. The trade

mark has earned goodwill and reputation and is registered

on 08.01.2002 and valid till 08.01.2032. The label is

registered on 14.08.2006 and is valid till 14.08.2026.

5. The plaintiff alleged infringement and passing off of

his trade mark by the defendant by using a deceptively

similar trade mark "SVT HOTEL SPECIAL" for selling

asafoetida.

6. The defence in a nutshell.

- The disputed trade mark could not have been

registered. The defendant has applied for revocation of the

trade mark. The defendant is the prior user of trade mark

"SVT HOTEL SPECIAL" for Asafoetida since 1990. The

disputed trade mark contains generic words and the trade

mark in dispute is not distinctive. The expression "HOTEL

SPECIAL" speaks about the intended purpose.

7. The Trial Court has held that the plaintiff is

entitled to a temporary injunction.

8. Sri Jayakumar S Patil, the learned Senior counsel

appearing for the defendant/appellant would contend that

the expression "SVT HOTEL SPECIAL" is a generic

expression and it cannot be claimed as a trade mark by

anyone, and use of such trade mark is permissible under

Section 17 of the Act of 1999. Even otherwise the

defendant/appellant is the prior user of the mark "SVT

HOTEL SPECIAL" and the use of such mark or letters or

expression by the defendant is protected under Section 34

of the Act of 1999. The contention in the written

statement that the defendant has been using the

expression "SVT HOTEL SPECIAL" before the plaintiff's

registration is wrongly construed by the Trial Court, to

hold that such a defence amounts to an admission that the

trade mark "HOTEL SPECIAL" is not generic but is

distinctive. The Trial Court failed to consider the prima

facie aspects of the documents produced by the

defendant.

9. Referring to the additional documents produced

by the appellant before this Court, it is urged that the

distributor agreement between the defendant and the

distributor entered on a stamp paper in 1992 prima facie

demonstrates the use of the expression "SVT HOTEL

SPECIAL" by the defendant since 1992.

10. Section 30(2) of the Act of 1999 also gives

protection against any action of alleged infringement, in

case the expressions are used to show the "intended

purpose". The expression "HOTEL SPECIAL" is used to

indicate quantity and the intended purpose i.e., the

product is sold indicating that it is meant for bulk use in

hotels as such, registration of trade mark is invalid.

11. The impugned order does not give any valid

reason for the order on application to restrain passing off

by the defendant.

12. The learned Senior counsel for the appellant has

placed reliance on the following judgments:

(i) Gaw Kan Lye v. Saw Kyone Saing. 1939 SCC Online Rang 143

(ii) Consolidated Foods Corporation v. Brandon & Co. Private Limited. 1961 SCC Online Bom 55

(iii) Century Traders v. Roshan Lal Duggar & Co, F.A.O (O.S.) 46/1976

(iv) N.R.Dongre and others v. Whirlpool Corporation and Anr. (1996) 5 SCC 714

(v) Cadila Health Care Ltd. V. Cadila Pharmaceuticals Ltd. (2001) 5 SCC 73

(vi) Satyam Infoway Ltd. V. Siffynet Solutions (p) Ltd. (2004) 6 SCC 145

(vii) Rasiklal Manikchand Dhariwal and another v.

M.S.S. Food Products (2012) 2 SCC 196

(viii) S. Syed Mohideen v. P.Sulochana Bai (2016) 2 SCC 683

(ix) ITC Limited, Rep. by its constituted Attroney S. Satyanathan vs Nestle India Limited 2020 SCC Online Mad 1158.

13. Sri Sivaraman Vaidyanathan, the learned counsel

for the plaintiff would contend that the defendant is not a

prior user of the trademark "HOTEL SPECIAL". The

documents produced relating to alleged prior use are all

concocted documents and created to get the undue

protection of Section 34 of the Act of 1999. The invoices

produced would disclose seven-digit telephone numbers

that were not in use till 1994 and this would demonstrate

that the invoices are fake.

14. The FGL number indicated in the invoices produced

by the defendant reveals that the defendant obtained

registration in the year 1987-88, whereas the defendant

claims that he has been selling the product since 1985.

The document which is said to be an agreement appointing

the distributor is also concocted.

15. The certificate issued by the Commercial Tax

Department dated 17.06.1982 reveals that the certificate

is valid from 04.01.1985 and such a procedure is not

contemplated under the provisions of the Karnataka Sales

Tax Act.

16. The scope of the Court under Order XLIII Rule 1

of the Code of Civil Procedure is limited. No ground is

made out to interfere in the discretion exercised by the

Trial Court granting the temporary injunction.

17. Learned counsel for the respondent has relied on

the following judgments:

(i) Prestige Lights Ltd Vs State Bank of India (2007) 8 SCC 449.

(ii) Tayabbhai M. Bagasarwalla and Ors. Vs. Hind Rubber Industries Pvt. Ltd. And Ors (1997) 3 SSC 443.

(iii) Wander Ltd. And Ors. Vs. Antox India P. Ltd.

(1990) (Supp) SCC 727.

(iv) Adiga's Abhiruchi and Ors. Vs Adiga's Fast Food (MANU/SC/0595/1990)

(v) Procter & Gamble Manufacturing (Tianjin) Co.

Ltd. And Ors. Vs. Anchor Health & Beauty Care Pvt. Ltd. (MANU/DE/1365/2014)

(vi) Sri Krishna Sweets Pvt. Ltd. Vs. Sri Krishna Sweets ( MANU/KA/5306/2021)

(vii) Hariram Vs. Mysore Polymers & Rubber Products Limited (MANU/KA/1368/2015)

(viii) Sunil Mittal and Ors Vs Darzi on Call (MANU/DE/1028/2017)

18. This Court has considered the contentions raised

and perused the records and the judgments cited. The

following questions arise for consideration:

(i) Whether the defendant is a prima facie prior

user of the trade mark in question and his use is

protected under Section 34 of the Act of 1999?

(ii) Whether the plaintiff has prima facie

established that the trade mark in question has a

distinctive character or has acquired a distinctive

character as a result of the use or that it is a well

well-known trade mark?

(iii) Whether the trade mark in dispute is prima

facie generic or non-distinctive in character?

(iv) Whether the defendant's use of the disputed

trade mark is protected under Section 30(2) of the

Act of 1999?

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19. The Act of 1999 provides for the registration of

trade marks and protection for the owner of the trade

mark, against unauthorised use of the trade mark. At the

same time, the Act of 1999 also protects the users of a

registered trade mark if such use is shown to be prior in

time as against the claim of the registered owner of the

trade mark. The Act of 1999 also enables the use of non-

distinctive trade marks under certain circumstances.

20. In the present appeal, the appellant has based

the defence on the following three grounds:

(a) The appellant is the prior user of the trade mark in

question;

(b) The trade mark is non-distinctive or generic;

(c) The trade mark is descriptive and describes the

intended purpose.

21. The defence relating to prior use is under

Section 34 of the Act of 1999. The expression "Nothing

in this Act shall entitle the proprietor or registered

user of a trade mark to interfere with or use by any

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person of a trade mark" in Section 34 (1) of the Act of

1999 speaks loud and clear about two things namely,

(a) Prior user's right to use a trade mark, even if the

trade mark or similar trade mark is registered

subsequently in the name of another.

(b) Limitations on the right of the registered owner

vis-à-vis the prior user.

22. The expression "the Registrar shall not refuse

(on such use being proved) to register the second

mentioned trade mark by reason of only of the registration

of the first mentioned trade mark" also enables the

Registrar to register the prior user's trade mark even if the

trade mark or similar trade mark is already registered.

Thus, to take shelter under Section 34 of the Act of 1999,

the person who claims prior use of the trade mark should

establish that he is the prior user. The burden of proving

prior use of the trade mark is on the person (defendant in

this case) who sets up a defence of prior use.

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23. The defendant tried to establish prior use of the

trade mark based on additional documents produced

before this Court. The plaintiff has also produced

additional documents as a counter to the additional

documents produced by the defendant. This court has

considered the additional documents of both sides.

24. Learned Senior Counsel laid much emphasis on

the agreement appointing a distributor to sell asafoetida,

by the defendant. The agreement is on stamp paper. The

recital reveals that the defendant has appointed SREE

BALAJI TRADERS as distributors to sell "SVT HOTEL

SPECIAL" compounded asafoetida in 250 grams jars and

500 grams jars and also SVT CRYSTAL asafoetida in 500

grams. The agreement is effective from 25.08.1992 till it

is canceled.

25. In the written statement, no reference is made

to the said agreement. No sales target is fixed in the

agreement though there is a recital that the distributor has

to achieve the sales target. As rightly pointed out by the

learned counsel for the plaintiff, the stamp paper does not

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disclose the stamp vendor's name. There are two different

seals of the stamp vendor on the said stamp paper. Even

the seal of the alleged parties to the agreement is also put

twice. One seal appears in bright ink and another in pale

ink.

26. The invoices produced by the defendant do not

disclose any transaction with the defendant and SREE

BALAJI TRADERS. Thus, this Court is of the view that, at

this stage, the said document cannot be considered to

accept the defendant's claim for having appointed the

distributor.

27. To discredit the invoices produced by the

defendant, the plaintiff has produced additional documents

viz., a few newspapers circulated between 1990 to 1996.

The advertisements by various traders and merchants in

the said newspapers indicate only six-digit landline

telephone numbers in Bengaluru in those days. However,

the invoices produced by the defendant contain seven-

digit landline telephone numbers during 1990-1994. Thus,

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prima facie a serious doubt arises about the authenticity of

invoices.

28. The registration certificate said to have been

issued to the defendant on 17.06.1982 by the Department

of Commercial Tax specifies that the certificate is valid

from 04.01.1985. The law does not provide for issuing a

Registration Certificate three years prior to the date of its

commencement. In the said registration certificate in

Form No.2, the date of printing of Form No.2 is mentioned

as 25.11.1984. Thus, prima facie, the date "17.06.1982"

appearing in the said document casts a serious doubt

about its authenticity.

29. On perusal of the aforementioned documents,

this Court is of the view, that prima facie at this stage of

the proceeding, the defendant's claim that it is the prior

user of the trade mark "SVT HOTEL SPECIAL" is not

established.

30. Now the Court has to consider whether the

trade mark in question is prima facie distinctive as claimed

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by the plaintiff, or non-distinctive or generic as claimed by

the defendant?

31. Admittedly the trade mark "HOTEL SPECIAL" is

registered with a logo and distinctive style of the words

used in it. The expression "SPECIAL" appearing in the

trade mark is also duly registered as a trade mark.

32. This Court has considered the documents

namely the invoices produced by the plaintiff. The

plaintiff's trade mark is registered on the premise that the

trade mark has acquired distinctiveness because of its use

since 1993. The registration was granted in 2002.

33. Proviso to Section 9(1) of the Act of 1999

enables the registration of a trade mark if it has acquired a

distinctive character as a result of its use; or if it is a well-

known trade mark. Either of the above said two things is

to be established to secure registration. The burden is on

the person who claims such use or recognition.

34. Section 9(1) of the Act of 1999 provides for

refusal of registration of a trade mark by the Authority

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under the Act of 1999 on the grounds enumerated therein.

The grounds relevant for the discussion in this case are;

(a) The trade mark is non-distinctive, i.e., one that is not

capable of distinguishing the goods or services of one

person from those of others,

(b) The marks that indicate the kind, quality, quantity,

intended purpose, values, geographical origin.

35. When a trade mark is sought to be registered

under the Act of 1999, on the premise that the said trade

mark has attained a distinctive character on account of its

continuous use, the Registrar under the said Act is under

obligation to consider all the relevant factors specified in

Section 9(1) of the Act of 1999. The decision to refuse the

mark has to be under Section 9(1),(a),(b), and (c); or

Section 9(2) (a) to (d) or Section 9(3) (a) to (c) of the Act

of 1999. The decision to grant registration has to be under

proviso to Section 9(1) of the Act of 1999. The decision to

grant or refuse the registration of a trade mark on an

application based on the claim that "the trade mark is a

well known trade mark" is not a mechanical decision. The

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Authority has to apply its mind to decide whether the

trade mark falls under the category where the registration

is impermissible or falls under a proviso where the

registration has to be granted. And the authority has to

bear in mind the mandate of Section 11 of the Act of

1999. Only after satisfying the requirement under the Act,

prescribed for registration of a trade mark, the registration

will be granted.

36. Once the trade mark is registered, Section 31(1)

of the Act of 1999, confers a prima facie validity to the

registered trade mark. The presumption as to its prima

facie validity is of course rebuttable. This being the

position, when an interim order is sought to restrain the

alleged infringement of a registered trade mark, the

burden is on the defendant to rebut the presumption as to

the prima facie validity of the trade mark.

37. Now, the Court has to consider whether the

defendant has prima facie established that the expression

"HOTEL SPECIAL" is generic or non-distinctive?

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38. As already noticed, the expression "HOTEL

SPECIAL" in a stylised form is registered as a trade mark.

In addition, the word "SPECIAL" is also separately

registered. The application for registration of the word

"HOTEL" is rejected. The plaintiff has also produced the

materials to establish the alleged long use of the trade

mark by the plaintiff to sell the particular product i.e.,

asafoetida.

39. The word "HOTEL" is non-distinctive. The word

"SPECIAL" may also appear to be generic. However, the

registration is granted in favour of the plaintiff. Now the

Court is concerned with the expression "HOTEL SPECIAL".

It is quite possible that the use of the said words "HOTEL"

and "SPECIAL in combination, as "HOTEL SPECIAL" while

marketing a product namely asafoetida which is essentially

a taste and flavoring product, may sound distinctiveness of

the product in estimation of a normal consumer.

40. While considering the application seeking a

temporary injunction, if a doubt arises as to whether the

trade mark is distinctive or non-distinctive, and on prima

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facie consideration of the materials, even if two conflicting

views appear to be plausible, the Court has to lean in

favour of the registered trade mark to hold that the trade

mark is prima facie valid.

41. The Act of 1999 also protects the user of certain

types of trade marks even though such trade marks are

registered. Thus the defendant can also defend the use of

trade mark registered in the name of the plaintiff.

However, to accept such a defence, the threshold of proof

is indeed high. Unless it is shown that the registration of

the trade mark in question is ex-facie impermissible, or

that registration is granted in gross violation of the

mandate of the provisions of the Act of 1999, the Court

has to take a view that the trade mark which is registered

is prima facie valid.

42. In the present case, no such materials are

placed to hold that the registration of the trade mark is

ex-facie impermissible.

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43. Now the question is whether the trade mark

only indicates the 'intended purpose' and its use by others

is protected under Section 30 of the Act of 1999?

44. Sri Jayakumar Patil raised the contention that

asafoetida is always bought in extremely small quantities

of five or ten grams for home use, and the bulk sale in 250

grams or 500 grams jars by itself would indicate that

asafoetida in such quantity is meant for hotel use. Thus, it

is urged that the expression "HOTEL SPECIAL" found on

the asafoetida jar sold in large quantities (250 gms or 500

gms jars) is only indicative of the intended purpose of use

by hoteliers.

45. The answer to the above contention lies in

answering a question "whether the expression "HOTEL

SPECIAL" signifies the bulk quantity of asafoetida; or is

suggestive of its use by only hoteliers? The answer seems

to be "no".

46. Merely because asafoetida is sold in large jars

by itself cannot mean that the expression speaks about

intended use without any distinctiveness. Whether the

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expression "HOTEL SPECIAL" found on the plaintiff's

asafoetida tin, meant only use by hoteliers in the

estimation of the public as alleged by the defendant is a

matter of evidence. Thus, in view of the presumption

relating to its prima facie validity, and absence of any

materials to show that the registration of the trade mark is

ex-facie untenable, this Court at this juncture cannot

accept the contention that the trade mark "HOTEL

SPECIAL" only speaks about the intended purpose

without any distinctive character.

47. This Court has also considered the principles

laid down in the judgments cited by the appellant as well

as the respondent.

48. In one of the judgments cited by the appellant

i.e., CENTURY TRADERS supra, the Court has held that

to succeed in a suit alleging infringement of a trade mark,

the party has to establish that he has been using the trade

mark prior in time than the opponent. This Court has

already held that the plaintiff prima facie has established

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prior use and the defendant has failed to establish his

claim relating to prior use.

49. The Judgment in S SYED MOHIDEEN supra is

also on the question of prior use and for the reasons

already recorded relating to prior use of the trade mark by

the plaintiff, said judgment does not come to the aid of the

appellant.

50. The judgment in ITC LIMITED supra relates to

a question of an unregistered trade mark. Thus, the said

judgment has no application in the present case where

admittedly the plaintiff is the proprietor of the registered

trade mark.

51. The Court has also considered the principles

laid down in the remaining judgments cited by the

appellant and this Court is of the view that facts in those

cases are distinguishable from the facts in the present

case.

52. Considering the materials on record, this Court

finds that the plaintiff has made out a case that his trade

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mark is registered after 10 years of its use in the market

to market the product asafoetida. The defendant has not

established the prior use. The materials placed are not

sufficient to dislodge the prima facie validity of the trade

mark and the inference that the trade mark has attained

distinctiveness.

53. It is urged that the Trial Court has not assigned

any reasons for allowing the application seeking a restraint

order against passing off. The defendant himself has used

the word ® in his product to suggest that his trade mark

"SVT HOTEL SPECIAL" is registered though it is not a

registered trade mark. Given the fact that the defendant is

also asserting his right to use the trade name "SVT HOTEL

SPECIAL" is also selling the asafoetida with a trade mark

which resembles that of the registered trade mark, the

case is made out for allowing the application to restrain

passing off.

54. The Trial Court has held that the defendant has

claimed prior use of the trade mark as such the defendant

has admitted its distinctive character. That reasoning may

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not be correct. However, for the reasons recorded supra,

this Court is of the view that the impugned order granting

a temporary injunction in favour of the plaintiff and

against the defendant does not call for interference in the

exercise of power under Order XLIII Rule 1 of the Code of

Civil Procedure where the scope of interference in the

discretionary order is limited.

55. Hence, the following:

ORDER

(i) The appeal is dismissed.

(ii) The impugned orders dated 11.04.2023 passed

on I.A. Nos.2 and 3/2023 in O.S. No.710/2023

on the file of XVIII Additional City Civil Judge at

Bengaluru are confirmed.

(iii) It is made clear that the observations made in

this order are only confined to the consideration

of the interim application and shall not be

construed as a finding on the merits of the