Madras High Court
Bahola Labs vs / on 24 November, 2021
Original Application No.74 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 24.11.2021
Coram:
THE HONOURABLE MR. JUSTICE SENTHILKUMAR RAMAMOORTHY
Original Application No.74 of 2021
Bahola Labs,
a partnership firm,
having its registered office at
Homeo House, 30, Bakthapuri Street,
Kumbakonam – 612 001,
and branch Office at 2, Tiger Varadachari Road,
Besant Nagar, Chennai – 600 090. ... Applicant
/versus/
Rajesh Kumar Jaiswal,
Prop.BHL Homeo Labs,
S17/95 A-14B Laxmighat (cantt.)
Nadesher, Varanasi – 221 002,
and at 214 Rudra Apartments, Near Shivpur Thana,
Shivpur, Varanasi – 221 003. ... Respondent
Prayer: Original Application is filed under Order XIV Rule 8 of Original Side Rules
read with Section 9 of the Arbitration and Conciliation Act, 1996 to grant an order of
interim injunction restraining the respondent, by itself, its partners, men, servants,
agents, distributors, stockist, representatives or any one claiming through or under
them from in any manner committing acts of copyright infringement by using, in the
course of trade, labels/artistic works which are a substantial reproduction of
Applicant's copyright in the artistic work or by using any other substantial
reproduction of the applicant's labels/artistic works or in any other manner
whatsoever pending the arbitration proceedings.
Page 1 of 7
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Original Application No.74 of 2021
For Applicant : Mr.R.Sathish Kumar
For Respondent : Mr.M.V.Swaroop
ORDER
The applicant seeks to restrain the respondent from, directly or
indirectly, infringing its copyright in the trade dress, label, or artistic work relating to
two of its products, namely, MOTHER TINCTURE and DILUTION.
2. The applicant and the respondent entered into a Distribution
Agreement dated 03.08.2015 (the Agreement). In terms thereof, the respondent was
appointed as the Distributor for marketing, distributing and selling the products of
the applicant in the Territories, as defined therein. The term of the Agreement was
for a period of 15 years. By Clause 13 of the Agreement, during the term thereof, the
respondent agreed not to directly or indirectly compete with the applicant by
marketing, promoting, distributing or selling or dealing with products which are
similar to that of the applicant. Clause 14 of the Agreement recorded that all
Intellectual Property Rights, as defined therein, relating to or connected with the
products are owned exclusively by the applicant. By such Clause, the respondent
was restrained from directly or indirectly infringing, impairing, adversely affecting or
jeopardizing the Intellectual Property Rights of the applicant either during the term of
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Original Application No.74 of 2021
the agreement or thereafter. On the allegation that the respondent had contravened
its contractual obligations and also infringed the copyright of the applicant, the
Agreement was terminated by notice dated 19.01.2021. By such notice, the applicant
also invoked the arbitration clause and sought to appoint an Arbitrator. The present
application is filed in these facts and circumstances. By an earlier order of this Court
dated 12.02.2021, an ad-interim injunction was granted. Such order was extended,
thereafter, from time to time.
3. The applicant was represented by Mr.R.Sathish Kumar, learned
counsel. He referred to the relevant clauses of the Agreement. He also referred to the
labels used on the applicant's products and the respondent's products. On such basis,
he contended that the labels used by the respondent in relation to identical products
constitutes blatant copying of the applicant's label. Consequently, it is contended that
both the contractual rights and the Intellectual Property Rights of the applicant were
violated.
4. The respondent was represented by Mr.M.V.Swaroop, learned
counsel. He contends that the name, BHL Homeo Labs, was used even in the
Agreement and was not adopted for the purposes of infringing the copyright or other
Intellectual Property Rights of the applicant. The next contention was that both the
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Original Application No.74 of 2021
products in question are homeopathic medicines. The trade practice is to use the
colour blue in relation to the product DILUTIONS and the colour Green in relation to
the product MOTHER TINCTURES. The third contention on behalf of the
respondent is that there is no copyright in a label. By adverting to Section 13 read
with Section 2(c) of the Copyrights Act, 1957, the respondent contends that the label
does not qualify either as a literary, dramatic, musical or artistic work. Even with
regard to passing off, he submitted that an action for passing off is in exercise of
common law rights. Since it is an action in tort, such rights do not flow from the
contract and are, therefore, not arbitrable. By relying upon the judgment of the
Division Bench of this Court in Lifestyle Equitis CV v. Q.D.Seatoman Designs Pvt.
Ltd and Ors., 2018 (1) CTC 450 and, in particular, paragraph No.5(t) thereof, it is
contended that the validity of an intellectual property is not arbitrable.
5. By way of a brief rejoinder, it is contended on behalf of the applicant
that a label qualifies as an artistic work since it involves artistic craftsmanship. In
addition, it is contended that the validity of the copyright was not questioned either in
response to the applicant's notice or in the counter affidavit.
6. At the outset, it should be noted that the Court is concerned with an
interlocutory application pending arbitration proceedings. Consequently, it is neither
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Original Application No.74 of 2021
necessary nor desirable to record definitive conclusions on the rival contentions
especially with regard to the validity of the copyright or other Intellectual Property
Rights, as defined in the Agreement. For interlocutory proceedings, it is sufficient to
note that the applicant's claim in such regard is not baseless. This is an aspect that
should be examined and determined by the duly constituted arbitral tribunal. It is
open to both parties to raise all contentions and objections before such arbitral
tribunal.
7. On examining the labels relating to the applicant's product and that of
the respondent, there is little doubt that the respondent's labels prima facie
constitutes copying of the labels of the applicant. Not only the colours deployed but
also the pattern on the labels of the respondent prima facie support an inference of
infringement. The fact that the respondent was engaged as a distributor of the
applicant and the infringing labels came to be used thereafter, whereas the applicant
states that he has used these labels since 2014 are material facts that tilt the balance
of convenience in favour of the applicant, and the hardship caused by permitting the
respondent to continue using these labels cannot be remedied subsequently. On the
other hand, the respondent may continue selling the relevant products by adopting
dissimilar labels.
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Original Application No.74 of 2021
8. As indicated earlier, the respondent was appointed as a distributor to
market, distribute and sell the applicant's products. By the Agreement, the
respondent agreed not to compete during the term of the Agreement and also
acknowledged that the applicant is the owner of all Intellectual Property Rights, as
defined therein, in connection with the products. At least for interlocutory purposes,
therefore, in these facts and circumstances, the applicant has made out a case to make
the interim order absolute pending arbitration proceedings.
9. For the reasons stated above, Original Application No.74 of 2021 is
allowed by making the interim injunction granted on 12.02.2021 absolute but subject
to arbitration proceedings. The applicant is directed to take steps to ensure that the
arbitral tribunal is constituted and enters upon reference by taking concrete measures
in such regard within a period of 30 days from the date of receipt of a copy of this
order.
24.11.2021
Index : Yes/No.
Internet : Yes/No.
bsm/rrg
https://www.mhc.tn.gov.in/judis
Original Application No.74 of 2021
SENTHILKUMAR RAMAMOORTHY J.,
bsm/rrg
Original Application No.74 of 2021
24.11.2021
https://www.mhc.tn.gov.in/judis
