Madras High Court
M/S.Neuberg Hitech Laboratories ... vs Dr.Ganesan'S Hitech Diagnostic ... on 13 April, 2022
A.No.1851 of 2022 Batch
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Order reserved on 04.07.2022
Order pronounced on 28.07.2022
CORAM
The Hon'ble Mr. Justice SENTHILKUMAR RAMAMOORTHY
Application Nos.1851,1852, 1853 1854, 1855, 2275, 2276
2299 of 2022
and
O.A.Nos.210, 211, 212, 213 and 214 of 2022
in
Civil Suit(Comm.Div) No.75 of 2022
1.M/s.Neuberg Hitech Laboratories Pvt. Ltd.
Rep. by its Director
Unit 35, Old No.16, Masilamani Road,
Balaji Nagar, Royapettah,
Chennai – 600 014.
2.Hitech Advanced Labs
86, 1st Floor, SRP Koil Street,
South Agaram, Peravallur,
Chennai – 600 082. ... Applicants/Respondents/Defendants
vs.
Dr.Ganesan's Hitech Diagnostic Centre Pvt. Ltd.
Rep. by Authorised representative
No.1, Millers Road, Kilpauk,
Chennai – 600 010. ... Respondent/Applicant/Plaintiff
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PRAYER IN A.No.1851 of 2022: This Application is filed under Order
XIV Rule 8 of O.S. Rules of the Madras High Court, Original side, 1956 r/w
r/w Order XXXIX Rule 4 of CPC,1906 to forthwith vacate the ex-parte ad
interim injunction passed by this Court vide Order dated 13.04.2022 in
O.A.No.210 to 214 of 2022 in C.S.(Comm.Div)No.75 of 2022 with
exemplary costs.
For Applicant : Mr.Satish Parasaran, Sr. Advocate
for Ms.Gayatri Roy
Assisted by
Mr.Vadivelu Deenadayalan
Ms.Kavitha Deenadayalan
(Applicant in A.Nos. 2275,
2276 & 2299 of 2022 and
O.A.Nos.210 to 214 of 2022)
For Respondents : Mr.P.S.Raman
Senior Advocate
for Ms.Prerna Khatri
M/s.A.K.Mylsamy & Associates
(Applicant in A.Nos.1851 to
1855 of 2022 and 1st Respondent
in A.Nos.2275, 2276 &
2299 of 2022 and O.A.Nos.210
to 214 of 2022)
Mr.P.R.Raman, Sr. Advocate
for Ms.Prerna Khatri
M/s.A.K.Mylsamy & Associates
(Applicant in A.Nos.1851 to
1855 of 2022 and
2nd Respondent
in A.Nos.1699, 2275, 2276 &
2299 of 2022 and O.A.Nos.210
to 214 of 2022)
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COMMON ORDER
Two established players in the medical diagnostics space are the
driving forces in this suit for relief in respect of alleged trademark
infringement and passing off. The plaintiff presented O.A.Nos.210 to 214 of
2022 and Application No. 1699 of 2022 along with the plaint. On
13.04.2022, ad interim orders, as prayed for in the original applications,
were granted ex parte except with regard to the use of the corporate name
Neuberg Hitech Laboratories Pvt. Ltd. Upon receipt of notice, the
defendants filed Application Nos.1851 to 1855 of 2022 to vacate the ad
interim order. The grounds urged in support of the applications to vacate
the ad interim orders inter alia included the institution of the suit without
disclosing that the plaintiff was in voluntary liquidation and the presentation
of the suit by an authorised representative instead of the Liquidator. By
order dated 28.04.2022, the ad interim order was modified, albeit as an
interim arrangement pending adjudication of the interlocutory applications.
As regards the mark ''Hitech'', the order of interim injunction was extended
subject to the carve out for the corporate name, Neuberg Hitech
Laboratories Pvt. Ltd., on condition that changes are made to the colour and
font size of name boards. As regards the device marks containing the word
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''Nalam'', the protection was limited to marks which are identical to or
deceptively similar to the registered device marks of the plaintiff. As a
condition for such extension, the plaintiff was directed to procure and
provide a guarantee-cum-indemnity deed executed by Metropolis
Healthcare Limited. A Guarantee-cum-Indemnity Deed dated 07.06.2022
was provided in compliance with the said condition.
2. In the above circumstances, the plaintiff filed an additional
application to take on record additional documents; and the plaintiff and
Metropolis Healthcare Limited filed applications to implead Metropolis
Healthcare Limited as the second plaintiff in the suit and amend the plaint.
Counters were filed in all these applications by the respondents/defendants.
For the sake of clarity, in this order, the expressions plaintiff and first or
second defendants are used to describe the parties.
3. Oral arguments on behalf of the plaintiff were addressed by
Mr.Satish Parasaran, learned senior counsel. In support of the application to
implead Metropolis Healthcare Limited, it was submitted that the Liquidator
of the plaintiff distributed the plaintiff's business on a going concern basis to
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Metropolis Healthcare Limited with effect from 04.06.2022. The
distribution of assets encompassed the intellectual property rights of the
plaintiff. As a result, it was contended that it has become necessary to join
Metropolis Healthcare Limited as the second plaintiff in the suit. By
drawing reference to paragraphs 12 and 15 of the counter affidavit in
Application No.2299 of 2022, it was contended that the defendants admitted
that the proposed plaintiff has a significant interest in the subject matter of
the suit. Therefore, it was contended that the defendants cannot oppose the
impleading application. As regards the application for amendment, learned
senior counsel submitted that the defendants raised objections to an
authorized representative instituting the suit instead of the Liquidator. Since
the suit was instituted with the consent of the Liquidator, the plaintiff
decided to request for permission to amend the cause title and relevant
paragraphs of the plaint so as to substitute the authorized signatory with the
Liquidator. In addition, the plaintiff discovered the use by the first
defendant of the website, http://www.neuberghitech.com/. In order to avoid
multiplicity of proceedings, the plaintiff decided to request permission for
amendment of the plaint so as to also claim relief in respect of the impugned
website. Apart from the above, the plaintiff wanted to bring on record
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additional documents evidencing the plaintiff's sales, promotional activities
and the use of the mark ''Hitech'' by the defendants.
4. As regards the applications relating to the relief of interim
injunction, learned senior counsel submitted that the mark ''Hitech'' was
adopted in the year 1989. The said mark was first registered several years
later in the year 2018. Therefore, the plaintiff has used the mark for about 33
years. In September and October 2021, two employees of the plaintiff,
namely, S.Senthilnathan and B.Varunadevan left the employment of the
plaintiff by citing age and family situation, respectively. Learned senior
counsel pointed out that the reasons specified by the said employees were
false and that they proceeded to establish Hitech Advanced Labs. Hitech
Advanced Labs was acquired by the first defendant, which is a company
incorporated on 10.03.2022. By drawing reference to the counter of the
defendants, learned senior counsel pointed out that the defendants admitted
therein that they adopt the names of companies acquired by them and that
this practice was continued as regards Hitech Advanced Labs. With regard
to the adoption of the mark Hitech, learned senior counsel submitted that
such adoption is dishonest because the two exiting employees unjustly and
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unlawfully misappropriated the said mark and, in turn, the first defendant
also dishonestly adopted such mark upon acquiring the second defendant.
With regard to the strength of the mark ''Hitech'', it was submitted that the
said mark may not be inherently distinctive but acquired distinctiveness
through use for more than 30 years. As regards the marks ''Nalam Cancer
Screen'', ''Nalam Diacheck 1.0'', ''Nalam Diacheck 2.0'' and ''Nalam MHC'', it
was submitted that the first defendant wilfully and dishonestly adopted the
same for a testing package called Ungal Nalam. Since the adoption of the
corporate name is not only likely to deceive but intended to deceive, learned
senior counsel concluded his submissions by stating that the first defendant
should be restrained from using the impugned corporate name.
5. Mr.P.S.Raman, learned senior counsel, made submissions on
behalf of the first defendant. At the outset, he contended that the alleged
dishonest intention of the exiting employees cannot be determined at the
pre-trial stage. The next submission was that the plaintiff suppressed
material facts relating to the voluntary liquidation. Therefore, the plaintiff is
not entitled to equitable relief. Learned senior counsel referred extensively
to the prosecution history of the plaintiff by pointing out that objections
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were raised by the Trade Marks Registry under Section 9(1)(b) and Section
11 of the Trade Marks Act 1999 when the plaintiff applied for registration in
2018. The objection under Section 11 was raised on the ground of the prior
registration of the identical mark ''Hitech Diagnostic Centre'' in the same
class by one Valsamma Varghese. By drawing reference to a subsequent
application by the plaintiff in 2019 and the reply dated 22.08.2019 to the
examination report, learned senior counsel pointed out that the plaintiff
contended that the mark ''Hitech Diagnostic Centre'' is a composite mark
and not a word mark. He also pointed out that the plaintiff distinguished its
mark from the label mark ''Hitech'' registered in the name of Dr. Sandeep
Jain on the ground that the plaintiff's mark was used with the tag line ''The
Extra Care Lab'' and that, therefore, the two marks are distinguishable.
Learned senior counsel also referred to a list of trademark registrations and
pending trade mark applications for word and device marks containing the
word ''Hitech''. In addition, learned senior counsel drew the attention of the
Court to a list of entities using the word ''Hitech'' as part of their corporate
name, including a list of entities in the medical field.
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6. Learned senior counsel further contended that the mark
''Hitech'' is descriptive of diagnostic services that deploy high technology.
He further submitted that the first defendant does not use the word ''Hitech''
on standalone basis, and that the said word is always used along with the
word ''Neuberg''. Since the word ''Neuberg'' is prominent and well known in
diagnostic services, it was submitted that there is no likelihood of deception.
Learned senior counsel further pointed out that the first defendant had
changed the colour and modified the font size so as to enable potential
customers to easily differentiate between the services of the plaintiff and
that of the first defendant. He concluded his submissions on the mark
“Hitech” by also referring to the prosecution history of Metropolis
Healthcare Limited in relation to the mark “Hitech Metropolis”, the
objections raised by the Trade Marks Registry in relation thereto and the
replies of Metropolis Healthcare Limited. He pointed out that both the
plaintiff and the proposed second plaintiff provided disclaimers with regard
to the nature of the mark ''Hitech''. Therefore, an estoppel operates against
them and they cannot be heard to contend to the contrary before this Court.
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7. With regard to the device marks ''Nalam Cancer Screen'',
''Nalam Diacheck 1.0'', ''Nalam Diacheck 2.0'' and ''Nalam MHC'', learned
senior counsel pointed out that the Trade Marks Registry raised objections
under Section 11 of the Trade Marks Act, 1999 (the Trade Marks Act. With
specific reference to the device mark ''Nalam Diacheck 1.0'', learned senior
counsel referred to the reply dated 13.06.2019 to the examination report,
wherein the plaintiff submitted that the said mark is a composite mark. He
also pointed out that the plaintiff conceded that the word ''Nalam'' refers to
good health in Tamil and that it is generic, non-distinctive and not entitled
to special protection under trademark law.
8. Mr.P.R.Raman, learned senior counsel, addressed oral
arguments on behalf of the second defendant. He submitted that the
amendments requested for by the plaintiff should not be permitted because
these amendments are designed to defeat the defences raised by the
defendants. In particular, he submitted that the defendants had contended
that the suit is not maintainable since it was instituted by an unauthorized
person on behalf of a company in voluntary liquidation. By the proposed
amendment, the plaintiff seeks to substitute the Liquidator for the
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authorized representative and delete and replace paragraphs of the plaint,
which deal with the institution of the suit. According to learned senior
counsel, material facts were suppressed while instituting the suit and the
plaintiff should not be permitted to overcome such fundamental defects by
seeking amendments. In support of the contention that such amendments
should not be permitted, learned senior counsel referred to and relied upon
the judgment of the Hon'ble Supreme Court in Revajeetu Builders and
Developers v. Narayanaswamy and sons and others (Revajeetu), 2009 (10)
SCC 84, particularly paragraphs 21,26,27,30 and 50 thereof. With reference
thereto, he also submitted that an amendment which changes the cause of
action should not be allowed. By referring to the judgment of the Division
Bench of this Court in Patanjali Ayurved Limited and others v. Arudra
Engineers Private Limited (Patanjali) 2021 (85) PTC 523 (Mad), he
contended that no action for infringement is maintainable under Section 17
of the Trade Marks Act, 1999 (the Trade Marks Act) in respect of one
element of a composite mark. Since ''Hitech'' constitutes one element in the
composite mark ''Hitech Diagnostic Centre'', it was contended that the
element ''Hitech'' is not entitled to any protection. In conclusion, learned
senior counsel submitted that the threshold for establishing secondary
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meaning is very high and that the plaintiff has not satisfied the requirements
for acquiring distinctiveness on account of secondary meaning.
9. By way of rejoinder, Mr.Satish Parasaran submitted that the
record reflects that the plaintiff is the first adopter of the mark ''Hitech''. By
drawing reference to the objections of the registry in view of the registration
of the mark by Valsamma Varghese, he pointed out that the plaintiff
responded to the objection on the ground that its use of the mark predates
the use by Valsamma Varghese by at least 14 years. He also pointed out that
the second defendant is admittedly a firm constituted by two ex-employees
of the plaintiff and that it was also admitted that the corporate name of the
first defendant is derived from the second defendant. Therefore, he
reiterated that the adoption is dishonest. On balance of convenience, he
pointed out that all the labs of the first defendant were admittedly opened
after the interim order. By referring to paragraph 50 of the counter to the
applications for interim injunction, he pointed out that the defendants
admitted that ''Hitech'' is not specifically identifiable with the diagnostic
industry. On such basis, he submitted that the mark cannot be considered as
generic. In response to the contention that neither the first nor second
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plaintiff can maintain the suit, he submitted that such contention is self-
evidently untenable. With regard to suppression, he relied on the judgment
of the Hon'ble Supreme Court in Arunima Baruah v. Union of India and
others (2007) 6 SCC 120, particularly paragraph 12 thereof, to contend that
unless suppression has a direct impact on the reliefs prayed for, a party does
not become disentitled to relief on the ground of suppression. By relying on
the judgment of the Division Bench of the Calcutta High Court in Sailendra
Nath Sinha and another v. The State and another 1954 SCC Online Cal
194, he submitted that a liquidator has the right to delegate.
10. With regard to the amendments prayed for, he submitted that
except for the amendment in relation to the website, the other amendments
do not impact the cause of action. By referring to the judgment in The
Commissioners of Inland Revenue v. Muller & Co.'s Margarine Limited
H.L.(E) 1901 Appeal cases 217, he pointed out that goodwill does not have
an independent existence and always attaches to the business. He further
submitted that in the hierarchy of trademarks, ''Hitech'' is at worst
descriptive and at best suggestive. In either case, both by virtue of pre-
registration and post-registration use, the mark has attained distinctiveness.
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In order to substantiate the claim for an injunction against the use of the
corporate name, he relied upon the judgment of the Hon'ble Supreme Court
in Mahendra & Mahendra Paper Mills Ltd v. Mahindra & Mahindra Ltd
(2002) 2 SCC 147 and, in particular, paragraphs 7, 8, 16 and 23 thereof. In
support of the contention that goodwill remains with a firm under voluntary
liquidation, he relied on a judgment of the Hon'ble Bombay High Court in
Court Receiver, High Court, Bombay v. R.R.Ommerbhoy Pvt. Ltd and others
2003 SCC Online Bom 430. Learned senior counsel also referred to the
judgment of the United States Court of Appeals in Zatarains, Inc. v. Oak
Grove Smokehouse, Inc., 698 F. 2d 786 to contend that the plaintiff has
established distinctiveness through use and that the mark ''Hitech'' has
acquired secondary meaning. Learned senior counsel concluded his
submissions by relying upon the judgment of the Delhi High Court in Ishi
Khosla v. Anil Aggarwal and others 2007(34) PTC 370(Del).
11. Before dealing with the applications for interim injunction
and the applications to vacate the orders of ad interim injunction, I propose
to deal with the applications to implead Metropolis Healthcare Limited as
the second plaintiff and amend the plaint. In support of the application for
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impleading Metropolis Healthcare Limited, it was stated that the plaintiff
was placed in voluntary liquidation pursuant to the special resolution passed
on 01.04.2022. As part of the voluntary liquidation process, the plaintiff
stated that the business undertaking was distributed to Metropolis
Healthcare Limited with effect from 04.06.2022. In terms thereof, it is stated
that the intellectual property rights of the plaintiff were transferred to
Metropolis Healthcare Limited.
12. This application was resisted by the defendants on the ground
that Metropolis Healthcare Limited should institute a separate suit after the
trademarks are registered in its favour upon transmission. It was also
submitted that the cause of action of Metropolis Healthcare Limited is
separate and cannot be clubbed with that of the plaintiff. The second
contention was that the plaintiff did not have the right to continue to
prosecute the suit after distribution of its business undertaking to Metropolis
Healthcare Limited, and that this defect cannot be remedied by impleading
Metropolis Healthcare Limited as the second plaintiff. These rival
contentions are addressed next.
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13. The suit was presented on 12.04.2022 and this is subsequent
to the special resolution of 01.04.2022 by which it was decided to place the
plaintiff in voluntary liquidation. It was concluded in the order dated
28.04.2022 of this Court that the commencement of voluntary liquidation
should have been disclosed as a material fact, but that such non-disclosure
did not preclude consideration of the applications for interim relief. The
implications of this development were also disclosed, including by imposing
the condition that Metropolis Healthcare Limited should provide a
guarantee-cum-indemnity in relation to obligations arising in this suit. On
this aspect, the said order may be read as part and parcel of this order. The
special resolution indicates that the business undertaking of the plaintiff
would be distributed by the Liquidator to Metropolis Healthcare Limited
on a going concern basis. In order to give effect thereto, a letter of
distribution dated 04.06.2022 was issued by the Liquidator. This letter of
distribution was issued after institution of the suit and discloses that the
assets of the plaintiff were distributed with effect from 04.06.2022. As part
of such distribution, it also records that the business undertaking is
transferred on a going concern basis to Metropolis Healthcare Limited. As a
result of the above actions, the intellectual property rights of the plaintiff
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were transferred to Metropolis Healthcare Limited with effect from
04.06.2022. Pursuant to such transfer, parties are required to make the
necessary application before the Trade Marks Registry for registration of
assignment in favour of Metropolis Healthcare Limited. Until the records of
the Trade Marks Registry reflect the name of Metropolis Healthcare Limited
as the proprietor of the relevant marks, the plaintiff continues to be the
registered proprietor. However, as between the plaintiff and Metropolis
Healthcare Limited, there is an equitable transfer which has already taken
effect.
14. In the meantime, as per the direction of this Court by order
dated 28.04.2022, Metropolis Healthcare Limited has executed a Guarantee
cum Indemnity Deed dated 07.06.2022 to fulfil all obligations arising out of
this suit. For reasons set out above, Metropolis Healthcare Limited is
certainly a proper party to the suit and would become a necessary party once
the transmission is registered. The objection of the defendants on the ground
that the cause of action changes is untenable because Metropolis Healthcare
Limited would become the successor-in-interest of the plaintiff upon
registration of the assignment. This process does not alter the cause of
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action; instead, Metropolis Healthcare Limited would be prosecuting on the
same cause of action as its predecessor-in-interest. The contention that the
impleading application should not be allowed because it defeats the defence
that the suit could not have been instituted by the plaintiff is also not valid
inasmuch as the plaintiff was the registered proprietor of the relevant marks
at the time of institution of the suit and continues to be the registered
proprietor as on date. Therefore, A.No.2276 of 2022 (to implead Metropolis
Healthcare Limited) is liable to be and is hereby allowed.
15. The application seeking amendment of the plaint is considered
next. When the applications for interim injunction were taken up for
hearing, one of the objections raised by the defendants was that the plaintiff
is a company in voluntary liquidation and that the suit should have been
instituted for and on behalf of the company by the Liquidator, whereas it
was instituted by an authorised representative. In these circumstances, the
plaintiff presented this application seeking to amend the plaint so as to
correct the description of the plaintiff both in the cause title and in
appropriate paragraphs of the plaint. The defendants opposed this
application on the ground that the defences of the defendants would be
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defeated if the amendments are permitted. They further contended that these
amendments alter the cause of action.
16. In Revajeetu Builders, the Hon'ble Supreme Court
formulated criteria on which applications for amendments should be
decided. Paragraph 63 of the judgment is as under:
“63. On critically analysing both the English and
Indian cases, some basic principles emerge which ought
to be taken into consideration while allowing or
rejecting the application for amendment:
(1) whether the amendment sought is imperative for
proper and effective adjudication of the case;
(2) whether the application for amendment is bona
fide or mala fide;
(3) the amendment should not cause such prejudice to
the other side which cannot be compensated
adequately in terms of money;
(4) refusing amendment would in fact lead to injustice
or lead to multiple litigation;
(5) whether the proposed amendment constitutionally
or fundamentally changes the nature and character of
the case; and
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(6) as a general rule, the court should decline
amendments if a fresh suit on the amended claims
would be barred by limitation on the date of
application.”
The amendments to the description of the plaintiff in the cause title and in
relevant paragraphs of the plaint certainly do not alter the cause of action.
Originally, the suit was filed by stating that the plaintiff is represented by an
authorised signatory. By this amendment, the plaintiff proposes to change
the description and indicate that the Liquidator would represent the plaintiff.
In view of the plaintiff being a company in voluntary liquidation, it is
appropriate that the plaintiff be represented by the Liquidator and not by an
authorized signatory.
17. The plaintiff also seeks an amendment with regard to the
website, namely, http://www.neuberghitech.com/. In order to justify this
amendment, the plaintiff stated that it noticed the impugned website after
the suit was filed. While dealing with a request for amendment, it should be
borne in mind that a request at the pre-trial stage is granted relatively
liberally unless it alters the cause of action or impacts limitation. In the
context of intellectual property rights, every infringing use creates a fresh
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cause of action. Therefore, limitation is not a barrier to the institution or
prosecution of proceedings provided the infringing use continues. In this
case, the defendants do not deny use, but justify use on the ground that the
marks are not distinctive and that therefore the use is not infringing. While
this amendment is based on substantially the same cause of action, the
plaintiff seeks to expand the scope of the suit by also seeking relief in
respect of the website or domain name. Therefore, there is limited impact
on the cause of action but it certainly does not substantially or
fundamentally alter the character of this suit, avoids multiplicity of
proceedings and is certainly bona fide. Therefore, A.No.2299 of 2022 is
liable to be and is hereby allowed. Consequent to both the impleading
application and the amendment application being allowed, the plaintiff is
permitted to carry out amendments to the plaint on or before 11.08.2022 and
serve a copy of the amended plaint on the defendants within a week
thereafter.
18. By Application No.2275 of 2022, the plaintiff seeks
permission to exhibit additional documents. These documents are listed in
the schedule to the judge's summons. On perusal, the documents include an
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excel sheet indicating the number of patients who had availed of the
plaintiff's services, chartered accountant's certificates, the plaintiff's
invoices, the plaintiff's promotional materials, pictures indicating the
defendants' continued use of the mark ''Hitech'', an extract from the
defendants' impugned website and the letter of distribution dated
04.06.2022 of the plaintiff's assets. This application is opposed by the
defendants on the ground that except the letter of distribution, all the
documents were in existence at the time of filing the suit.
19. On the contrary, the plaintiff asserted that the suit was filed
hurriedly to seek urgent interim relief and, therefore, these documents could
not be filed with the suit. The documents listed at Serial No.3 and 6 to 8 are
subsequent to the filing of the suit and, therefore, could not have been filed
along with the suit. The other documents are intended to establish the
plaintiff's reputation and goodwill. Considering the preliminary stage of the
suit, where even pleadings are incomplete, I am of the view that the
defendants are not prejudiced and that reasonable cause is established.
Therefore, the plaintiff is permitted to exhibit these documents subject to the
right of the defendants to file an affidavit of admission/denial in respect
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thereof and raise objections in the course of trial inter alia on the grounds of
admissibility, relevance and proof.
20. Turning to the applications for interim injunction, at the
outset, it bears repetition that the main contestants are two leading players in
the medical diagnostics industry, and the applications are in relation to two
sets of marks. The primary focus of the applications is the mark ''Hitech
Diagnostic Centre'' in relation to the impugned mark “Neuberg Hitech” and
impugned corporate name “Neuberg Hitech Laboratories Private Limited,
and this is dealt with first. This mark has been used by the plaintiff from the
year 1989. When the plaintiff applied for registration of the word mark in
Class 44 on 31.05.2018, objections were raised by the Trade Marks Registry
on 30.08.2018 both under Section 9(1)(b) of the Trade Marks Act and under
Section 11(1) thereof. In response thereto, by communication dated
18.09.2018, the plaintiff stated that it was using the mark openly, honestly
and continuously without any hindrance or objection from any quarter since
1989. On such basis, the plaintiff asserted that the mark attained
distinctiveness as per the proviso to Section 9(1) of the Trade Marks Act.
As regards the objection under Section 11(1), the plaintiff stated that the
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other registered proprietor, Valsamma Varghese, had used the mark since
2003, whereas the plaintiff had used the mark from 1989. This contention
was controverted by the defendants by relying upon the plaintiff's reply to
the objections of the Trade Marks Registry on 22.08.2019 to the application
dated 30.07.2019 for device mark registration in class 42 and 44. In the
examination report dated 22.08.2019, the Trade Marks Registry had cited
the registration of the label mark ''Hitech'' in Class 42 by Dr. Sandeep Jain
and the application for registration of the mark ''Hitech'' by Priti Mittal in
Class 44. In response thereto, by reply dated 16.09.2019, the plaintiff had
pointed out that its mark is a composite mark with the tag line ''The Extra
Care Lab'' and, therefore, distinguishable from the other registered mark
containing the words ''Hitech''. The defendants contended that the
statements made by the plaintiff before the Trade Marks Registry operate as
an estoppel against the applicant and that the plaintiff cannot contend to the
contrary before this Court. The impact of these statements on the present
applications is considered next.
21. From the search report dated 30.08.2018 and the response
thereto on 18.09.2018, it appears that the principal contention of the
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plaintiff was that the word mark “Hitech Diagnostic Centre” had acquired
distinctiveness through pre-registration use from 1989 as per the proviso to
Section 9(1) of the Trade Marks Act. The plaintiff also asserted that its use
pre-dated use by the prior registrant by at least 14 years. Upon considering
these statements, registration was granted. The position taken by the
plaintiff now is in consonance with the representation made to the Trade
Marks Registry then. Moving to the search report dated 22.08.2019 with
regard to the device mark application dated 30.07.2019 and the response
thereto dated 16.09.2019; unlike on the previous occasion, the objections of
the Trade Marks Registry were only under Section 11 and not under both
Sections 9(1) and 11 of the Trade Marks Act. Such objections were on
account of the prior registration of the label mark ''Hitech'' in the name of
Dr.Sandeep Jain with effect from 19.11.2008 and the application dated
14.02.2013 to register the mark ''Hitech'' in Class 44 by Priti Mittal.
Without doubt, the plaintiff responded by relying on the composite nature of
its mark and represented that the mark was distinguishable for that reason.
The plaintiff also asserted that the composite mark had acquired a
distinctive character. Thus, the plaintiff asserted and claimed distinctiveness
through pre-registration use of the word mark “Hitech Diagnostic Centre” in
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2018 and distinctiveness of its composite mark in 2019 by emphasising the
distinguishing features. Therefore, both these statements should be
considered while assessing whether an estoppel operates. Three aspects
should be noticed while making such assessment. First, in the latter case, the
objections by the Trade Marks Registry are not on the ground of lack of
distinctiveness but only on relative grounds. Secondly, use by the prior
registrant in both cases is subsequent to 1989 when the plaintiff commenced
usage of the mark ''Hitech''. Thirdly, the plaintiff is seeking protection
against defendants who allegedly appropriated its mark dishonestly. While
definitive conclusions cannot be drawn at the interlocutory stage on this
issue, the above aspects lead to the conclusion that interim relief cannot be
refused on the ground of prosecution history estoppel.
22. This leads to the question whether, for interlocutory purposes,
the element ''Hitech'' is prima facie distinctive. Trademarks have
traditionally been classified into four categories, namely, generic,
descriptive, suggestive and arbitrary. In the landmark judgment in
Abercrombie & Fitch Company v. Hunting World Incorporated, 537 F.2d 4
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(2d Cir. 1976) (Abercrombie), the US Court of Appeals for the Second
Circuit held, in relevant part, as under:
“The cases, and in some instances the Lanham Act,
identify four different categories of terms with respect to
trademark protection. Arrayed in an ascending order which
roughly reflects their eligibility to trademark status and the
degree of protection accorded, these classes are (1)
generic, (2) descriptive, (3) suggestive, (4) arbitrary or
fanciful. The lines of demarcation, however, are not always
bright...”
In other words, if trademarks are placed in a spectrum, at one end are marks
that are ineligible for protection (generic), at the middle are marks that are
entitled to protection subject to satisfaction of conditions (descriptive) and
marks entitled to protection without conditions (suggestive), and at the other
end are marks entitled to strong unconditional protection (arbitrary). The
placement of a mark on this spectrum is dependent on the product or service
to which the mark is applied and, therefore, the exercise cannot be carried
out in a vacuum. It is also significant to bear in mind, as held in
Abercrombie, that “the lines of demarcation...are not always bright.” The
definition of a generic term in Abercrombie is: “a generic term is one that
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refers, or has come to be understood as referring, to the genus of which the
particular product is a species.”
23. As regards the element ''Hitech'' in the mark “Hitech
Diagnostic Centre”, it is a relatively easy-to-discern fusion of the common
words “high technology”. While “high technology” is used in diagnostic
services, it certainly cannot be said that high technology is unique to
diagnostic services. As pointed out by learned senior counsel for the
plaintiff, paragraph 50 of the counter of the defendants also supports this
position. Thus, it cannot be said that the word ''Hitech'' describes the service
or even the service category. Because the element ''Hitech'' is not
descriptive of the service category or service provided by the applicant,
prima facie the mark does not appear to be generic. A plea of publici juris
was also raised by relying on use of the term “Hitech” by others both in
health care services and otherwise. In P.M.Palani Mudaliar & Co v.
M/s.Jansons Exports and another, 2017 SCC Online Mad 1090, a Division
Bench of this Court concluded that for a plea of publici juris to succeed, the
use of the mark by others should be greater than use by the person claiming
the right to exclusive use. The Supreme Court instructs that use by others
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should be substantial to draw a conclusion of publici juris. This
determination cannot be made at the interlocutory stage although the extent
and nature of use by others is a material consideration while deciding
whether interim relief should be granted. I now turn to the descriptive or
distinctive nature of the element “Hitech”.
24. In Zatarains, Inc. v. Oak Grove Smokehouse 698 F.2d 786
(Zatarains), the US Court of Appeals for the Fifth Circuit formulated four
tests to discern if a mark is descriptive: whether the mark has a dictionary
meaning; whether imagination is required to connect the product or service
to the mark and, if so, how much; whether competitors are likely to need the
terms used in the mark to describe their product or service; and the extent of
use of the term by others to market a similar product or service. If the above
tests were to be applied to the element ''Hitech'' in the plaintiff's mark, when
used in relation to diagnostic services, the following tentative conclusions
may be drawn. The dictionary meaning of the term “high technology”,
which is fused in the term ''Hitech'', is ''of/or using high technology''. The
term thus appears to refer to the deployment of high technology in the
provision of services, i.e. the presence of a feature or characteristic that
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enhances the quality of service. Hence, it does not directly describe the
quality of service but refers to a feature that improves the quality of service
and this connection may be made without much imagination. While the use
of the term as a trademark by other providers of similar services is not
necessary, the term may be required to be used at least descriptively by other
service providers both in the same field and otherwise. Finally, the prima
facie evidence on record, in the form of search reports, discloses that a
number of other service providers have applied for registration of the mark
''Hitech'' and a list of entities using “Hitech” as part of their corporate name
is also on record. When the above aspects are considered cumulatively, it
prima facie falls within the descriptive and not the suggestive category. As
a descriptive mark, it does not have inherent distinctiveness but may acquire
distinctiveness through use. Such use may be either at the pre-registration
or post registration stage. This leads to the question whether the mark has
prima facie acquired distinctiveness.
25. In support of the claim of acquired distinctiveness, the
plaintiff asserted and adduced evidence of open, honest and continuous use
from the year 1989. Section 9(1) of the Trade Marks Act deals with
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absolute grounds to refuse registration and the proviso thereto, which carves
out an exception, is extracted below:
“Provided that a trade mark shall not be
refused registration if before the date of application
for registration it has acquired a distinctive
character as a result of the use made of it or is a
well-known trade mark”
Section 32 deals with distinctiveness acquired post-registration and is as
under:
“Protection of registration on ground of
distinctiveness in certain cases. -- Where a trade
mark is registered in breach of sub-section (1) of
section 9, it shall not be declared invalid if, in
consequence of the use which has been made of it, it
has after registration and before commencement of
any legal proceedings challenging the validity of
such registration, acquired a distinctive character in
relation to the goods and services for which it is
registered.”
26. In a recent judgment, FreeElective Network Private Limited v.
Matrimony.com Limited [C.S.(Comm. Div.) No. 122 of 2021], I examined
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the acquisition of secondary meaning, including the threshold in such
regard, and concluded as under:
“As is evident from the above extract, the
Bombay High Court held that the primary meaning
should be lost and the expression should have
transcended its original connotation to acquire
secondary meaning. If this standard were to be
applied and tested against the well-known mark
'Apple', when used in the context of computers, there
is sufficient basis to take judicial notice and conclude
that the primary meaning of apple as referring to a
type of fruit has not been lost. But when the word
'Apple' is used or the device mark is seen in the
context of computers, it brings to mind a popular
brand of computer and its maker and not the fruit.
While undertaking this exercise, it should be noticed
that the mark 'Apple', when used for computers, is far
removed from its primary meaning. As a rule, the
further the distance between the goods or services to
which the mark is applied and the primary meaning
thereof, the easier it is to acquire secondary meaning.
The converse is equally true. For instance,
hypothetically, if 'Apple' were a mark used by a
retailer of fruit, the acquisition of secondary meaning
would be a herculean task. Instead, if it were used by
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a retailer of groceries, the difficulty would be
moderate. Taking another example from the universe
of fruits, when the word 'blackberry' is used in the
context of mobile phones, it brings to mind the once
immensely popular mobile phone, whereas, when used
in the context of fruits, jams and the like, the word
connotes the fruit. Indeed, even while recognising the
secondary meaning in context, one continues to be
aware of the primary meaning. Thus, I conclude that
it is not necessary for the primary meaning to be lost
but it is necessary that the primary meaning should be
overshadowed in context by the secondary meaning.”
27. Therefore, the test is whether the primary meaning of ''Hitech''
(that is, High Technology) is overshadowed in context. To put it differently,
whether the use of the element “Hitech”, in relation to diagnostic services,
brings to the fore the plaintiff and its services by overpowering and pushing
to the recesses of one's mind the primary meaning. In order to substantiate
the contention that the mark is not distinctive, the defendants relied upon
the plaintiff's responses to the examination reports of the trademark registry.
In the reply dated 18.09.2018, the plaintiff responded to the objection under
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Section 9(1)(b) of the Trade Marks Act on the ground that it had used the
mark openly, honestly and continuously without any objection from any
quarter since 1989. In fact, the plaintiff expressly contended that the mark
attained distinctiveness as per the proviso to Section 9(1) of the Trade
Marks Act. Learned senior counsel for the plaintiff relied on this reply and
contended that the use of the mark pre-dated the registration thereof by a
number of years and, therefore, the plaintiff is entitled to the benefit of the
proviso to Section 9(1). Even in the post-registration period, it was
submitted that the mark has been used for at least four years by investing
considerable sums in advertising and that the mark had attained a high
reputation. Consequently, it was contended by learned senior counsel that
the mark has acquired distinctiveness in terms of Section 32 of the Trade
Marks Act also.
28. On the contrary, learned senior counsel for the first and second
defendants contended that the element ''Hitech'' is not inherently distinctive
and has not acquired distinctiveness through use. Mr.P.S.Raman, learned
senior counsel, pointed out that there are several other users both in the
medical/pharmaceutical sector and in other sectors. In such circumstances, it
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was contended that the mark has not attained distinctiveness or a secondary
meaning. Mr.P.R.Raman. learned senior counsel, contended that the plaintiff
is not entitled to protect the element ''Hitech'', which is a part of the
composite mark “Hitech Diagnostic Centre”. For such purpose, Section 17
of the Trade Marks Act and the judgment of the Division Bench of this
Court in Patanjali was relied upon. It was also contended that a very high
threshold should be satisfied for a claim of secondary meaning to be
successful.
29. As discussed above, the plaintiff asserts that the element
''Hitech'' was adopted and put to use by the plaintiff in the year 1989 and the
assertion of use for about 33 years since adoption has not been effectively
controverted at this juncture. The invoices on record, including the
additional documents, prima facie evidence use from about 2004. The
defendants have also failed to controvert the plaintiff's contention of prior
use in comparison to other users. The plaintiff expressly relied upon the
proviso to Section 9(1) in its response to the objections raised by the Trade
Marks Registry. The question as to whether the use of the term “Hitech”
would immediately bring to mind the plaintiff or its services should be
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tested from the perspective of a consumer or potential consumer of such
services. Subject to the caveat that this is a tentative conclusion, which
should be revisited in final disposal, if so tested, in my view, prima facie,
the answer would be in the affirmative, within the market in which the
plaintiff operates and in relation to which the first defendant recently
applied the impugned mark, because of long use and reputation. Another
aspect remains to be addressed: since the mark is “Hitech Diagnostic
Centre” and not “Hitech”, can protection be claimed for one element or
feature of a composite mark? Yes, it can, provided such element is both
essential and distinctive. In this case, there is no doubt that the element
“Hitech” in the mark “Hitech Diagnostic Centre” is the essential or
prominent feature because the other two words are generic or commonly
descriptive. While learned senior counsel for the second defendant relied on
Patanjali, the said judgment dealt with marks applied in relation to
dissimilar goods. The plaintiff therein had placed reliance on Section 29(4)
of the Trade Marks Act and paragraphs 79 and 80 of the Manupatra Report
indicate that the conclusion turned on the particular criteria applicable for
such purpose. Even otherwise, if the whole word mark “Hitech Diagnostic
Centre” is compared with the impugned mark and corporate name “Neuberg
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Hitech” and “Neuberg Hitech Laboratories Private Limited”, a prima facie
case of deceptive similarity is made out especially because the entities carry
on identical or near-identical businesses. Although learned senior counsel
for the first defendant contended that the use of the word “Neuberg” would
avert confusion, I am of the prima facie view that consumers are likely to be
confused or deceived into believing that there is a common origin or trade
connection between the service providers. I now focus on an aspect of
considerable significance to the decision on the grant of interim relief.
30. It should also be noticed that the plaintiff's assertion that two
employees of the plaintiff resigned from its employment and established the
second defendant under the trade name ''Hitech Advanced Labs” is not
denied by the defendants. Thus, it appears that two ex-employees of the
plaintiff, without permission or authorisation, appropriated the mark of their
ex-employer and applied it to the business established by them. Since these
facts are not controverted, they qualify as prima facie evidence of dishonest
adoption by the first defendant. The second defendant was admittedly
acquired by the first defendant and, thereafter, a limited company was
incorporated under the corporate name ''Neuberg Hitech Laboratories
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Private Limited'', which contains the mark ''Hitech''. The plaintiff is an
established diagnostic services company especially in Tamil Nadu and the
first defendant cannot and does not assert ignorance of the prior use of the
mark “Hitech” by the plaintiff. In addition, the advertisement of the first
defendant contained in page 10 of the plaintiff's typed set uses the tagline
''ek;g epa{bgh;f; ,g;ngh c';f g[J icwblf; nyg;'' which prima
facie is likely to cause confusion among existing and potential consumers.
Considering the above and the admitted fact that the first defendant's
adoption of the mark owes its origin to the acquisition of the second
defendant, the first defendant's adoption is also prima facie not honest.
Both Midas Hygiene Industries Pvt. Ltd. v. Sudhir Bhatia and Ors., (2004)
3 SCC 90 and T.V. Venugopal v. Ushodaya Enterprises Limited (2011) 4
SCC 85 instruct that an injunction should follow if it appears, either prima
facie or otherwise, that the adoption of the mark was dishonest. Therefore,
a prima facie case is made out for the grant of interim relief.
31. The plaintiff approached this Court even before the first
defendant inaugurated its first laboratory under the corporate name and
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trademark Neuberg Hitech Laboratories Private Limited. Thus, the plaintiff
approached the Court at the earliest point of time and the first defendant has
not functioned under the above mentioned corporate name for long. While a
change in corporate name requires some lead time, it can be achieved with
limited disruption to business. Keeping in mind the above aspects, the
balance of convenience tilts in favour of the plaintiff. Undoubtedly, if
interim relief is not granted, the loss incurred by the plaintiff cannot be
adequately remedied.
32. As stated earlier, there is prima facie evidence that the mark
''Hitech'' has acquired distinctiveness through long use. When coupled with
the manner in which such mark was adopted first by the second defendant
and thereafter by the first defendant, a case is made out to restrain the
defendants from using either the corporate name or trademark. As regards
the corporate name, a change in corporate name cannot be effected without
initiating corporate actions at the board of directors and shareholder levels
and also requires the filing of returns with the Registrar of Companies. In
order to provide reasonable lead time to the first defendant to complete the
above actions, the order of interim injunction, as regards the corporate
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name, will come into operation two months from the date of receipt of a
copy of the order. As regards the use of the mark ''Hitech'' as a trade mark,
the order of interim injunction shall continue in operation with immediate
effect. Both with regard to the trademark and corporate name, once
effective, the order shall operate until disposal of the suit.
33. The application for relief in respect of the device marks
''Nalam Cancer Screen'', ''Nalam Diacheck 1.0'', ''Nalam Diacheck 2.0'' and
''Nalam MHC'' remains to be considered. These marks were registered on
different dates in the year 2019. At the time of registration, the plaintiff
stated that the marks were proposed to be used. Hence, in contrast to the
mark ''Hitech'', which was stated to be used from the year 1989, these marks
were proposed to be used as of 19.04.2019. Significantly, the word ''Nalam''
means health or well being in Tamil. When used in relation to diagnostic
services, it clearly refers to the intended purpose or objective of the services.
Thus, they are descriptive marks. The use of these marks has been for only
about three years. Moreover, the defendants have not used marks that are
identical or deceptively similar to the composite device marks. Instead, the
defendants have used ''Ungal Nalam'' as the name for a package of tests. In
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addition, the defendants have used the expression ''Ungal Nalam Engal
Poruppu'', which is an appropriate and common assertion by any provider of
healthcare and related services. In these circumstances, the plaintiff is not
entitled to prevent the use of the word ''Nalam'' except to the limited extent
that the defendants should not use marks that are identical or deceptively
similar to the registered device marks of the plaintiff. The interim order
granted earlier provides protection to that limited extent and such order shall
continue to operate until disposal of the suit. The applications for injunction
and the applications to vacate the same are disposed of in these terms.
28.07.2022
Index : Yes
Internet : Yes
rrg
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SENTHILKUMAR RAMAMOORTHY, J.
rrg
Pre-Delivery Common Order in
Application Nos.1851,1852,1853 1854,
1855, 2275, 2276, 2299 of 2022
and
and 214 of 2022
in
Civil Suit(Comm.Div) No.75 of 2022
28.07.2022
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