USHA INTERCONTINENTAL v. USHA TELEVISION LIMITED — 1985 DIGILAW 405 (DEL)

M. K. Chawla ( 1 ) BOTH the plaintiffs and defendants claim to have adopted the trade mark usha in relation to the televisions. As to which of the parties is prior in time, is the question that require going into while disposing of the plaintiffs application I. A. No. 1997/85. It is a settled proposition that, as between the two parties who proposed to use a particular trade mark, the person who designs the mark will get the preference, over the other. In a case of one party proposing to use the mark as against the actual user, the later will take precedence. In between the two parties claiming actual user as against the prior user the party who is prior in time will have the advantage over the other. Even, in regard to the prior registration of the trade mark as against the prior user, the action of the later will prevail. ( 2 ) IN the present proceedings, the plaintiffs not only claim the prior adoption of the trade mark usha but also lay claim over its actual user. This preposition is not to the liking of the defendants who rely upon the evidence of their prior adoption of this trade mark with the intention of point into the manufacturing process. ( 3 ) TO decide the controversy, one has only to keep in mind the salient features of the plaintiffs suits, as well, as, the defence raised by the defendants in their written statement. ( 3 ) TO decide the controversy, one has only to keep in mind the salient features of the plaintiffs suits, as well, as, the defence raised by the defendants in their written statement. As per the averments plaintiff No. 2 Usha International Ltd. is a Company incorporated under the provisions of the Companies Act of which Shri K. Swaroop is the Secretary and duly empowered and authorised to sign, verify and institute the present sun; that plaintiff No. 1 has been joined in this action as a right to relief in respect of and arising out of the same act or series of acts of the defendant; that the plaintiffs belong to the Shriram Group of Companies and have a community of interest; that Shriram Group of Companies is one of India s foremost and largest group which began its operation in 1889; that this group manufactures a diverse range of products which are marketed in India and in over 50 countries abroad; that if was the desire of the founder of the plaintiffs to manufacture and offer for sale high quality products, with a view to compete with foreign imported articles under the brand name; Usha ; that amongst the various companies of this group is the Jay Engineering Works Ltd. who also adopted the trade mark Usha in the year 1936 in regard to Sewing machines for its manufacture and sale; that in course of time Jay Engg. Works Ltd. expanded its range of products and started using the said trade mark in relation to electric fans, regulators, hot air units, hurricane lanterns, fuel injection equipment etc. ; that this company has obtained registration of various goods under the provisions of the Trade and Merchandise Marks Act as shown in annexures B, D and E: that another company of the Shriram Group is, Shriram Refrigeration Industries Ltd. which is engaged in the manufacture and sale of diesel engines, water coolers, relays and other electrical goods under the trade mark Usha since the year 1961; that yet another company of this group started manufacturing and sale of piston and piston rings under this mark. ( 4 ) PLAINTIFF No. 1, whose proprietor is General Sales Pvt. Ltd. is engaged in the selection, sale and export of a large range of products including televisions and have been doing business under the trading style "usha Intercontinental", continuously and extensively; that plaintiff No. 2 is a marketing organisation, marketing some of the products of the plaintiffs as well as of the companies of the Shriram group under the Trade mark Usha since the year 1964; that in the year 1961. the name of plaintiff No. 2 was changed to Usha Sales Ltd. and subsequently, from 15th September, 1982 the name was changed to Usha International Ltd. ; that the plaintiffs have been extensively advertising through various news media goods marketed by it under the trade mark usha for decades past; that the plaintiffs with their sales exceeding Rs. 80. 00 crores for the financial year 1983-84 alone, have been participating in various international trade exhibitions and fairs with a view to promoting the sale of their products; that it is abundantly clear that the trade mark USHA denotes the goods and business of the companies belonging to the said Shriram group, that plaintiff No. 2 is the largest consumer durables marketing company in the country with exports to over 50 countries abroad ; that the said trade mark is now a household name in cities, towns and villages in the country and is being associated with the business of the plaintiffs. ( 5 ) THE plaintiffs adopted the trade mark Usha in relation to televisions in February, 1983 and in the month of March, 1983 the plaintiffs engaged M/s Metal Box India Limited, Bombay to design and print folders and leaflets for its television sets under the trade mark Usha; that in April, 1983, the said folders and leaflets were distributed to the plaintiffs dealers; that by that time it became well known in the trade and amongst a large section of the public that the famous house of Shriram is shortly launching television sets under their internationally reputed trade mark Usha; that in the month of June, 1983, plaintiff No. 1filed an application for registration of the trade mark Usha in respect of television sets which application is still pending; that in response to the market survey of televisions, the plaintiffs received offers from the large number of parties for the sale of their televisions under the trade mark Usha; that in the month of August, 1984, the plaintiffs released a large series of advertisements in various newspapers inviting televisions manufacturers for this purpose. In the month of December, 1984, the plaintiffs applied for the appropriate licences to the concerned authorities for marketing television sets under the trade mark Usha and after obtaining the said licences in January, 1985, the plaintiffs have launched the sales of television sets under this trade mark. In the month of December, 1984, the plaintiffs applied for the appropriate licences to the concerned authorities for marketing television sets under the trade mark Usha and after obtaining the said licences in January, 1985, the plaintiffs have launched the sales of television sets under this trade mark. ( 6 ) ON the 10th of September, 1984 the plaintiffs for the first time discovered through an advertisement released in the Hindustan Times, that the defendant intends to introduce television sets in the market under the trade mark Usha, without having obtained any licence, permission or consent from the plaintiffs; that the plaintiffs served the defendants with a legal notice on 31st January, 1985 calling upon them to desist forthwith from using the trade mark Usha in relation to televisions or from using Usha as part of its corporate name "usha Television Ltd. " within 15 days from the receipt of the notice but they have not cared to either comply with the requisitions or even to send the reply; that only in the second week of March, 1985, the defendants released their black and white television sets under the impugned trade mark usha in the market in flagrant violation of the legal and vested rights of the plaintiffs; that on account of this fact the defendant is likely to cause immense confusion and deception amongst the purchasing public and the trade ; that it will lead to passing off of their goods as those of the plaintiffs; that the adoption of the impugned trade mark Usha in respect of televisions by the defendants will cause irreparable harm and injury to the reputation and goodwill of the plaintiffs ; that the use of the trade mark Usha by defendants is both mala fide and fraudulent with a view to encash upon the vast reputation and goodwill, that has accumulated to the plaintiffs and their group of companies, and to earn easy illegal profits for themselves: that if the defendants are not restrained by an immediate order of injunction and its goods are allowed to be introduced in the market simultaneously with the goods of the plaintiffs, under an identical trade mark Usha, there is an imminent danger of the public being deceived and confused, and there is likelihood of the plaintiffs suffering both in their business and reputation. Left with no other option the plaintiffs filed the present suit praying for the issuance of a permanent injunction against the defendants, its servants and agents from manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in television sets and VCRs under the trade mark Usha or from doing any other thing as is likely to pass off the defendants goods or business as the goods or business of the plaintiffs. ( 7 ) ALONG with the suit the plaintiffs also filed an application under Order 39 Rules 1 and 2 Civil Procedure Code. praying for the same relief pending disposal of their main suit. After hearing the learned counsel for the plaintiffs and after going through the plain and the documents filed along with the plaint, the ad-interim injunction restraining the defendants from manufacturing, selling or offering for sale the television sets under the trade mark Usha was issued. ( 8 ) AFTER service of the summons of the suit as well as the restraint order, the defendant immediately filed the written statement, reply to the plaintiffs application under Order 39 Rules 1 and 2 Civil Procedure Code and also preferred to file an application I. A. 2425/85 under Order 39 Rule 4 Civil Procedure Code praying for the early disposal of the plaintiffs application and the vacation of the ex parte ad-interim injunction granted in favour of the plaintiffs. ( 9 ) THE case set up by the defendants in their written statement is that of a complete denial. They deny the existence of the plaintiffs Nos. 1 and 2 or the authority of Shri R. B. Sharma to sign, verify the present suit on their behalf. The defendants also denied the knowledge about the plaintiffs belonging to Shriram Group of Companies which is not a legal entity. It is alleged that the adoption of the trade mark Usha in respect of sewing machines, fans and other accessories etc, has no relevancy to the present controversy between the parties, as none of the plaintiffs were dealing or handling in the manufacturer and sale of televisions. In fact the plaintiffs are not coming on their own merit, goodwill or name but have based their case on the borrowed reputation of their companies which are quite separate entities and are holding registration for those goods which are not the subject matter of the present suit. In fact the plaintiffs are not coming on their own merit, goodwill or name but have based their case on the borrowed reputation of their companies which are quite separate entities and are holding registration for those goods which are not the subject matter of the present suit. The defendants specifically denied the involvement of the plaintiffs in the manufacture and sale of televisions since 1981, inasmuch as, none of the plaintiffs have any industrial licence, import licence or any factory for the manufacture of black and white or colour television sets. The defendants also showed ignorance about the advertisements alleged to have been issued by the plaintiffs wherein there is no reference of the manufacture or sale of television by the plaintiffs. The plaintiffs are not the original owners of the reputation in the brouchers nor they are the original designer of it, the copies being of some foreign advertisements. ( 10 ) THE government of India has standardised importation of only 51 cm colour picture tube through the canalising agency namely Electronics Trade and Technology Development Corporation (ETTDS) to which the plaintiffs have not applied for issue of an licence. The defendants also denied the plaintiffs ever having sold television sets under the trade mark Usha. The invoices filed along with the plaint are a clear forgery. ( 11 ) WHILE giving the history of the defendants, starting the project for the manufacture and sale of televisions it is alleged that sometime in January, 1981, a company with the name Usha Television Private Limited, was proposed to be formed. On 26th February 1981, an application on behalf of the defendants Company was made to the Secretary, Department of Industrial Development, Government of India, New Delhi, for obtaining industrial licence for manufacture of television sets. The defendant company was incorporated on 1st May, 1982 and subsequently converted into public limited company on 1st July, 1984. The main object of the company was to carry on all or any of the businesses of manufacture, maintenance, repairers of and dealers in electrical and electronic appliances and apparatus of every description and in television and telecommunication requisites. On 18 4-83 the Ministry granted the industrial licence to the defendants to manufacture 10,000 TV sets per annum. Subsequently, the defendants were granted letter of intent on 3-11-1983 by the concerned Ministry for the manufacture of 20,000. 00 colour TV receivers per annum. On 18 4-83 the Ministry granted the industrial licence to the defendants to manufacture 10,000 TV sets per annum. Subsequently, the defendants were granted letter of intent on 3-11-1983 by the concerned Ministry for the manufacture of 20,000. 00 colour TV receivers per annum. Later on the defendants were also granted industrial licence and import licence for the manufacture of colour television sets. In compliance with the grant of licences, the defendants placed orders for instruments with LTTDC on 9. 8. 1984 and with the local suppliers on 26. 9. 1984. ( 12 ) THE defendants also released their advertisements on 10-9-1984 in the Hindustan Times and other papers under the trade mark Usha with their trading style of Usha Televisions Ltd. The defendants applied for registration of the trade mark Usha under clause 9 on 26. 9. 84 claiming the use of Usha for televisions since 1. 12 82. The defendants have made huge purchases and have spent considerable amount on sale promotion and advertisements on Usha TVs. They have also employed highly technical staff including qualified engineers and professional managers. The defendants are marketing their Usha televisions through their parent body, USHA Rectifier Corporation India Ltd. The televisions under the trade mark donates the television sets manufactured and sold by the defendants and none else. The plaintiffs are poaching upon the lights of the defendants. Besides the defendants, there are eight more companies under the name Usha doing business in different manufacturing ana marketing goods. ( 13 ) USHA is a Hindi and Sanskrit word meaning Dawn (Sun rise ). It is a dictionary word. Being a likeable word, it is a common general female name and is being thus used. The name Usha was adopted by the defendants companies as it happened to be the name of the eldest daughter of Shri Kulwant Rai, the founder of all the companies. The defendants are using the trading style Usha and the trade mark Usha openly and extensively since the year 1982. ( 14 ) ON the receipt of the notice dated 3lst January, 1985, Shri Lalit Gupta, Advocate, for the defendarts had a talk with Shri Raj K. Anand of the plaintiffs and during discussion it was made known that the defendants are the earlier adopters of the trade mark Usha for televisions. ( 14 ) ON the receipt of the notice dated 3lst January, 1985, Shri Lalit Gupta, Advocate, for the defendarts had a talk with Shri Raj K. Anand of the plaintiffs and during discussion it was made known that the defendants are the earlier adopters of the trade mark Usha for televisions. ( 15 ) THERE is also an interpolation in GP 1 issued by Toys Electronics Pvt. Ltd. , inasmuch as the word for Usha are clearly written subsequently. Similarly; in the other GP. the word usha has been added later on. Even otherwise there is no mention of any sale of 14 "or 20" black and white or colour TV sets by the plaintiffs. The suit of the plaintiffs, being false to their knowledge, be dismissed. ( 16 ) ON the same grounds the defendants filed the reply to the plaintiffs application I. A. 1997/85. ( 17 ) I have heard the arguments of the learned counsel for the parties and with their help gone through the pleadings, the documents and other relevant material on record. ( 18 ) FROM the perusal of the documents and the pleadings on the record it can safely be concluded that the plaintiffs are the prior user of the trade mark Usha in relation to televisions having sold them in the market in January, 1985. in para No. 10 of the plaint it was specifically mentioned that the defendants for the first time released their black and white television sets in the second week of March, 1985 under the impugned trade mark Usha, in the market. This part of the case set up by the plaintiffs, unfortunately, has neither been admitted nor denied. Even during the course of the arguments, learned counsel for the defendants never laid a claim of their prior user, than that of the plaintiffs trade mark Usha in relation to televisions. Their only defence is that the defendants adopted the trade mark Usha for the televisions earlier to that of the plaintiff s. This part of the case I propose to examine later, but as at present advised, this Court will have no hesitation in holding that the prior user alone is relevant for the creation of propriety rights in a trade mark. The use of a trade mark in advertising media by itself is not enough unless and until the goods are offered concurrently with such advertisement, if it is to be regarded as "trade-mark". I would add that to hold otherwise, would seem to nullify the effect of certain sections of the Act. For instance a proprietor of a registered trade mark might, without having any goods to offer, advertise his mark at periodic intervals, andthereby prevent any attack being made upon his mark. Since in the present case, the plaintiffs introduced television sets bearing the trade mark Usha, prior to the defendants, not withstanding the defendants plea regarding having advertised the mark earlier, the plaintiffs alone are entitled to proprietory rights in the trade mark Usha in relation to television set. ( 19 ) EVEN in regard to the prior adoption, the documents filed by the parties clearly indicate that the plaintiffs have adopted this mark prior in point of time, than the defendants. In this behalf the defendants have placed much reliance upon an advertisement dated 8th June, 1982 in hindustan Times , Delhi. From the careful perusal of the photostat copy of this advertisement I am of the opinion that it does not advance their case. This advertisement, prima facie, does not indicate the defendants intention to adopt the trade mark Usha for television sets. This advertisement is from Usha Rectifier Corporation Pvt. Ltd. This advertisement states that the it subsidiary Usha Televisions Ltd. require category of personnel. This advertisement nowhere state that Usha is to be the trade mark of the televisions proposed to be manufactured by Usha Rectifier Corporation Private Limited or the defendants. ( 20 ) LEARNED counsel for the defendants argued that the advertisement has the Usha Logo appearing in rectangular panel at its top, which will make clear to the concerned parties that the defendants proposed to adopt and manufacture the televisions under the trade mark Usha. I am afraid this conclusion cannot be drawn from the said advertisement. The reason is very simple. In the same newspaper there is another advertisement of the same company-Usha Rectifier Corporation of India Pvt. Ltd. with Usha Logo. These two advertisements with the same logo has been given by the same company, in relation to totally different sets of goods. I am afraid this conclusion cannot be drawn from the said advertisement. The reason is very simple. In the same newspaper there is another advertisement of the same company-Usha Rectifier Corporation of India Pvt. Ltd. with Usha Logo. These two advertisements with the same logo has been given by the same company, in relation to totally different sets of goods. I would have relied upon this advertisement, provided it has been made clear that the defendants intends to manufacture televisions under the trade mark Usha or even had stated that they propose to market usha Televisions . This would have satisfied the conception of the word adoption of the particular trade mark. In the absence of such indication, it is just not possible for this Court to hold that the defendants are prior in time of the adoption of the trade mark Usha for television sets. ( 21 ) ON the other hand the earliest dated document where the defendants disclosed the possible intention to adopt the trade mark Usha for television, is the advertisement in the hindustan Times dated 10th September, 1984. In fact their trade mark application is dated 26th September, 1984. So it is obvious that the mark was really adopted in September, 1984, which is much later in time. ( 22 ) LEARNED counsel for the defendants then placed reliance on the provisions of Section 18 of the Trade and Merchandise Act which lays down that in order to be the proprietor of a trade mark, a person may use the trade mark or even propose to use the trade mark. In support of his submission, learned counsel also referred to Halsbury s Laws of England, Volumes 58 paragraph 28 which reads as under : "in my opinion, though the language is not appropriate, it means this, that a man who designs-no one else having used it one of the special things pointed out in Section 10, as designer, he is to be considered as the proprietor of it". ( 23 ) A similar observation also appears in 3 RPC, Page 160. ( 24 ) THERE is no dispute about the observation referred to in the above said two citations but the present case falls outside its scope. ( 23 ) A similar observation also appears in 3 RPC, Page 160. ( 24 ) THERE is no dispute about the observation referred to in the above said two citations but the present case falls outside its scope. This is a case of passing off action, where the provisions of Trade and Merchandise Act are irrelevant The principles that govern the test of passing off are to be derived only from the common law sources. Furthermore, the rights to the trade mark arise, either by use of the trade mark in relation to goods or upon registration of the trade mark under the Trade Marks Act. Section 18 of the Act, prima facie concerns only the primary qualifications for registration of a trade mark. Various other requirements and conditions are required to be fulfilled before the trade mark can be registered under the Act. It may happen that even if, such requirements and conditions are satisfied, the mark may not be registered, due to conflict with the rights of a third party. It is only upon registration that the rights are conferred by virtue of Section 28 of the Act. In view of the scheme of the Act, I am of the opinion that if a trade mark is proposed to be adopted or used by any party then his rights are subject to any one. who has actually used the trade mark. This position is for ified in the judgment 3 RPC page 160 relied upon by the learned counsel fort he defendants. ( 25 ) LEARNED counsel for the plaintiff, in support of his submission, has rightly placed reliance in judgment reported as AIR 1978 Delhi 250 which goes to the extent of saying that a priority in use is even superior to a priority in registration. As observed earlier, the plaintiffs are the prior user of the trade mark, particularly when the defendants have not taken up the stand either in their written statement or reply to the plaintiffs application that they have designed the mark Usha for their televisions. ( 26 ) IT may be that the defendants with an intention to manufacture and sale of television sets applied for the issuance of industrial licence as far back as 26. 2. 81 and in order to achieve that object got the company incorporated on 1. 5. 82. ( 26 ) IT may be that the defendants with an intention to manufacture and sale of television sets applied for the issuance of industrial licence as far back as 26. 2. 81 and in order to achieve that object got the company incorporated on 1. 5. 82. They also placed orders for the manufacturing of blocks, issuance of industrial licence, letter of intent and the purchase of instruments from ETTDS but at no point of time during this period they expressed their intention to use the trade mark Usha in respect of their televisions either by way of advertisements, issue of pamphlets or the moving of an application for the registration of their trade mark. Had the defendants any intention to adopt Usha as a trade mark, the application for registration should have been filed simultaneously, along with the application referred to above. For this lapse the defendants have to suffer the consequences. During this period the plaintiffs succeeded and in fact stole a march over them in adopting and using the Usha brand televisions. At the first available opportunity i. e. on 9. 6. 1983 the plaintiffs moved an application for the registration of their trade mark under Clause 9, for their televisions sets before the Registrar. Before the defendants advertisement came into being, the plaintiffs have already acquired a reputation and have sold the product for considerable amount. ( 27 ) LEARNED counsel for the defendants then argued that the plaintiffs are not the manufacturer of the television sets and as such cannot be said to have adopted or used the trade mark Usha. This argument, prima facie, has no legs to stand. In order to be a proprietor of a trade mark, a person need not be manufacturing goods under the alleged trade mark. It is sufficient to trade in goods under the selector s trade mark. The following passage in Kerly s Law of Trade Marks and Trade Name (llth Edition) at page 13, makes the position clear : "there is nothing in the Trade Marks Act. . . . . . which requires a proprietor of a registered trade mark to refrain from introducing modifications or variations in the goods to which he applies his mark or in the manner in which they reach the market. . . . . . which requires a proprietor of a registered trade mark to refrain from introducing modifications or variations in the goods to which he applies his mark or in the manner in which they reach the market. If he should find it convenient to transfer manufacture from one locality to another, or procure his supplies from sub-contractors, or arrange for assembly of completed articles by someone of his choice in lieu of doing it himself, these and a vast number of other possible changes in procedure are his sole concern. His mark only becomes vulnerable in this connection if he permits its use in a manner which is calculated to deceive or cause confusion. " ( 28 ) IN order to clarify the position further, learned counsel for the plaintiffs referred to a large number of famous companies who were exclusively trading, and do not manufacture any commodity. Some of these companies are Bajaj, Gem, Uptron Televisions, Phillips Televisions, Keltron Televisions etc. etc. ( 29 ) LEARNED counsel for the defendants raised objections to the genuineness of the excise gate passes dated 8. 1. 85 and 14. 2. 85 under which few sets of the televisions were removed from the premises of Toyo Electronics Pvt. Ltd. by the plaintiffsfor use of the plaintiffs. Learned counsel points out that the word "marked for Usha" are in different ink and are in the hand of another person than the person who has scribed the gate pass. Prima facie there does not appear to be any manipulation or addition in the excise pass because the name and address of the plaintiffs find clearly mentioned. Even otherwise there was no bar for the plaintiffs to have picked-up the goods from their suppliers with or without the trade mark Usha. They were at liberty to attach their trade mark Usha and sell them as such in the market. The entire chain of events from the point of purchase of goods by the plaintiffs from their suppliers, to the point of sale to the ultimate consumers, is corroborated by authentic evidence, and there is no reason to doubt the genuiness of the excise gate passes. The entire chain of events from the point of purchase of goods by the plaintiffs from their suppliers, to the point of sale to the ultimate consumers, is corroborated by authentic evidence, and there is no reason to doubt the genuiness of the excise gate passes. ( 30 ) ALL these facts taken together, lead to the following conclusion : (A) That the plaintiffs adopted the trade mark Usha in relation to televisions as far back as July, 1982; (b) That the defendants adopted the trade mark Usha in relation to televisions sometime in September, 1984 ; (c) That the plaintiffs introduced Usha brand televisions in the market in January, 1985 ; (d) That the defendants introduced Usha brand televisions in the market only in March, 1985 ; (e) That the plaintiffs are the prior users of the trade mark and have acquired a vast reputation not only in Usha brand consumer durables but also in respect of televisions as well ; (f) The use of the identical trade mark Usha in relation to identical goods, namely, televisions, in the same territories would cause considerable confusion and deception and pass off the defendants goods as those of the plaintiffs ; (g) The defendants were put to notice by the plaintiffs in the month of January, 1985 by a legal notice duly received by them that it should not use the trade mark Usha in relation to televisions. Despite this notice, they chose to release the goods into the market, for reasons best known to them. ( 31 ) THE plaintiffs have made out a prima facie case for the confirmation of the ad-interim injunction dated 10. 4. 85. The balance of convenience also lies in favour of the plaintiffs inasmuch as the mark being identical in relation to identical goods, the possibility of confusion and deception is almost unquestionable. The plaintiffs being prior in adopting and use of the trade mark will suffer irreparable injury in case the defendants arc allowed to the use of the trade mark Usha in respect of their televisions. ( 32 ) AS a result of the above discussion, I hereby confirm the ex parte injunction granted in favour of the plaintiffs and against the defendants by this Court on 10. 4. 85. No costs.