B D N PHARMACEUTICALS v. SHREE GOPAL ENGINEERING AND CHEMICAL WORKS
1994-12-15
S.R.SINGH
body1994
DigiLaw.ai
S. R. SINGH, J. This appeal has its advent to this Court from the judg ment and decree dated 9-12-1993, rendered by 4th Additional District Judge, Kanpur Dehat in a passing-off action being original Suit No. 4 of 1987 instituted by plaintiff-respondent, Shree Gopal Engineering and Chemical Works, 91 Government Industrial Estate, Kanpur under Sections 105 and 106 under the Trade Merchandise Marks Act, 1958 (In short the Act), The relief sought was for permanent as well as mandatory injunction and also for rendi tion of accounts etc. 2. The synoptical resumption of the case, which has given rise to the present appeal may be briefly stated and it is that the plaintiff, a partnership farm is engaged in the business of manufacturing Phenyle Nepthalene balls and cotton bandages under Drug Licence No. 27 of 1965 and has been using trade name doctor Brand with bust portrait of Jugal Bihari Gupta, one of the partners of the Firm. It is beyond the pale of controversy that the plaintiff has been using the said Trade Mark and Trade Name since the year, 1963 on its drugs. 3. The suit was instituted with the allegations that the venture of the plaintiff firm was diffused one and goods had circulation in major parts of the country including the States of Uttar Pradesh, Madhya Pradesh, Bihar, West Bengal, Himachal Pradesh, Punjab, Haryana and Delhi. It was also alleged in the plaint that the plaintiff had given wide publicity of its goods in the Newspapers, conspicuously at play- Boards, Calendars, Walls Painting, Cinema Slides etc. and further that it maintained a strict quality control over its goods and commanded reputation on Trade Name/trade Mark aforesaid. The defendant appellants business is neoterical, inasmuch as they started manufacturing pharmaceutical disinfectant etc. and adopted the name of doctor Brand owing to popularity of the same and began to pass off the goods of inferior quality under the said Trade name doctor Brand, which the plaintiff had been harnessing on use since 1963. It was alleged that the defen dant also embarked upon manufacturing Phenyle Nepthalene balls under the Trade Mark doctor Brand label with bust portrait similar to that of the plaintiff.
It was alleged that the defen dant also embarked upon manufacturing Phenyle Nepthalene balls under the Trade Mark doctor Brand label with bust portrait similar to that of the plaintiff. This, according to the plaintiff, spawned confusion in the mind of the public and amounted to deception in the matter of passing-off the goods manufactured by the defendant which were inferior in quality to the goods produced by the plaintiffs. The plaintiff accordingly, prayed that by means of a decree of permanent injunction, the defendant, their agents, dealers etc. be refrained from manufacturing, selling, advertising their goods under the Trade-mark doctor Brand and by a decree of mandatory injunction, they as restrained from passing off the goods under the aforesaid Trade-mark. The defendant appellant filed a written statement and contested suit with the allegations inter alia that it had been using an imaginary name doctor Brand and Liquooplin dipicted in a black rectangular design on their drugs since 1977 and the sale of their goods was being made in the States of Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Goa and Delhi. 4. It would be worth while to set out here that Trade-mark doctor Brand is conspicuous by its not being registered as yet either in the name of the plaintiff or in the name of the defendant. The application for registration moved on behalf of the plaintiff-respondent has, no doubt, been allowed and the objection by the appellant rejected by Deputy Registrar of Trade-marks, New Delhi vide order dated 17-9-1992, but the operation of the said order has been stayed by the appellate court vide order dated 11-12-1992 and the stay order is still operating with the result that the registration of the Trade-mark in question stands deferred. 5. On the pleading of the parties, the following issues stemmed and were formulated. (i) Whether the defendants have no right to manufacture and sell Pharmaceuticals, medicines preparations, disinfectants, such as phenyle and nepthalene balls etc. under the brand of Trade mark doctor Brand and stated in para 9 of the plaint? (ii) Whether the court has no jurisdiction to try the suit? (iii) Whether the defendants are illegally passing off their goods as those of the plaintiff under the Trade-mark doctor Brand? (iv) Whether the plaintiff is entitled to injunctions and damages? If yes, its amount? (v) Whether the suit is barred by limitation? (vi) To what relief?
(ii) Whether the court has no jurisdiction to try the suit? (iii) Whether the defendants are illegally passing off their goods as those of the plaintiff under the Trade-mark doctor Brand? (iv) Whether the plaintiff is entitled to injunctions and damages? If yes, its amount? (v) Whether the suit is barred by limitation? (vi) To what relief? (vii) What if effect of advertisement of defendants Trade marks under Section 20 (1) of the Trade and Merchandise marks as alleged in para 22 (a) of W. S. ? 6. The learned trial court decreed the suit and perpetually restrained the defendant-appellant, its agents, dealers, stockists from manufacturing selling advertising directly or indirectly under the Trade mark doctor Brand and further restrained them, by means of a mandatory injunction from passing off their goods and selling the same throughout the country under the label and name of doctor Brand Trade-mark. The suit for rendition of accounts was however, dismissed but damages to the tune of Rs. 2000 were awarded by the learned trial court. Aggrieved, the defendant-appellant has preferred the instant appeal. 7. I have heard Sri Murlidhar, Senior Counsel assisted by Sri Sudhanshu Dhulia for the appellant and Sri L. P. Nathani, Senior Counsel appearing for the plaintiff-respondent. 8. Since the suit giving rise to the present appeal was admittedly an action for passing off as distinguished from an infringement action, it would be opposite, with a view to appreciating the controversy, to set out the distinc tion between the two which can be explained aptly and with a telling effect by pointing it out in terms of the issues involved therein that is to say, by point ing out the difference between the issues involved therein. In a passing off action, the issue is as follows - "is the defendant selling goods so marked as to be designed or calculated to lead the purchaser to believe that they are the plain tiffs goods? On the other hand, in an action for infringement, the issue is as follows: "is the defendant using a trade-mark which is the same as or which is a colourable imitation of the plaintiffs registered Trade-mark? 9. In Ruston Hornby Ltd. v. Z. Engineering Co.
On the other hand, in an action for infringement, the issue is as follows: "is the defendant using a trade-mark which is the same as or which is a colourable imitation of the plaintiffs registered Trade-mark? 9. In Ruston Hornby Ltd. v. Z. Engineering Co. , AIR 1979 SC 1649, the Supreme Court held as under: "it very often happens that although the defendant is not using the trade mark of the plaintiff, the get- up of the defendants goods may be so much like the plaintiffs that a clear case of passing off would be proved. It is on the contrary conceivable that although the defendant may be using the plaintiffs mark the get-up of the defendants goods may be so different from the get-up of the plaintiff goods and the prices also may be different that there would be no probability of deception of the public. Nevertheless, in an action on the trade-mark that is to say, in an infringement action, an injunction would issue as soon as it is proved that the defen dant is improperly using the plaintiffs mark. It was further held as under: "the action for infringement is a statutory right. It is dependent upon the validity of the registration and subject to other restrictions laid down in Sections 30, 34 and 35 of the Act. On the other hand, the gist of a passing-off action is that a is not entitled to represent his goods as the goods of b but it is not necessary for b to prove that a did this knowingly or with any intent to deceive. It is enough that the get-up of Bs goods has become distinctive of them and that there is a probability of confusion between them and the goods of a. No case of actual deception nor any actual damage need be proved. At common law the action was not maintainable unless there had been fraud on As part. In equity, however, Lord Cottenham L. C. in Millington v. Fox (1838) 3 My and Cr 338 held that it was immaterial whether the defendant had been fraudulent or not in using the plaintiffs trade mark and granted an injunction accordingly. The common law courts, however, adhered to their view that fraud was neces sary until the Judicature acts, by fusing law and equity, gave the equitable rule the victory over the common law rule.
The common law courts, however, adhered to their view that fraud was neces sary until the Judicature acts, by fusing law and equity, gave the equitable rule the victory over the common law rule. In Savillo Perfumery Ltd. v. June Perfect Ltd. (1941) 58 RFC 147 at p. 161. Master of the Rolls observed as under: ". . . . . . . . . . In an action for infringement where the defendants trade-mark is identical with the plaintiffs mark, the Court will not inquire whether the infringement is such as is likely to deceive or cause confusion. But where the alleged infringement consists of using not the exact mark on the Register but something similar to it the test of infringement is the same as in an action for passing-off. In other words the test as to likelihood of confusion or deception arising from similarity of marks is the same both in infringement and passing-off action. " 10. The principle on which the court acts in a passing-off action was succinctly stated by James, L. J. in Levy v. Walker, (1879) 10 Ch. D. 436 a p. 447, as thus: "it should never be forgotten that in these cases the sole right to restrain anybody from using any name he likes in the course of any business he chooses to carry on is a right in the nature of a trade-mark that is to say a man has a right to say, you must not use a name, whether fictitious or real - you must not use a description whether true or not, which is to represent, or calculated to represent, to the world that your business is my business, and so by a fraudulent misstatement deprive me of the profits of the business which would otherwise come to me. An individual plaintiff can only proceed on the ground that having established a business reputation under a particular name, he has a right to restrain any one else from injuring his business by using that name. The plaintiff in order to succeed in a passing-off action must prove the following facts: (i) A disputed name or mark or sound or get-up has become distinctive of the plaintiffs goods so that the use of the said name of mark, etc.
The plaintiff in order to succeed in a passing-off action must prove the following facts: (i) A disputed name or mark or sound or get-up has become distinctive of the plaintiffs goods so that the use of the said name of mark, etc. in relation to goods are regarded by a substantial number of members of public or in the trade as coming from the same source. (ii) The defendants use of name or mark was likely or calculated to deceive and cause confusion and injury, actual or probable to the good-will of the plaintiffs business. " In Liasen Ltd. v. Barley, (1929) 46 RFC 11 at p. 19 Clauson, J. observed as under: "the matter was carefully considered by Mr. Justice Russell not long ago, and he pointed out that, if you are restraining the infringe ment of a registered trade-mark, you can restrain the man from using the mark, but, if it is what is known as an unregistered trade-mark, all you can de is to restrain him from selling the article under a label containing that word without clearly dis tinguishing his goods from the goods of the plaintiffs, which is quite a different thing. The defendant is perfectly entitled to use the word (Lissen as it is not a registered trade-mark, he is perfectly entitled to put the word lissen on his goods if he puts a statement below, but please take notice that although this is called Lissen, it is not made by the plaintiffs but is made by me and has nothing to do with the plaintiffs. . . . . . . . . . " 11. The question for consideration in the present appeal is whether the learned lower court was alive to the distinction between passing-off and infringement actions, and has decreed the plaintiffs suit on a proper self-direction to the factors relevant in a passing-off action. A perusal of the issue No. 1 framed by the learned lower court would indicate that the relevant issue was not framed keeping in view the distinction between a passing-off action and an infringement action. Issue No. 1 as framed is conceptually misleading and in my opinion it has vitiated the decision under appeal. It cannot be gainsaid that the object of framing issues is to shorten/ narrow down the arena of conflict and pin-point the real dispute to be determi ned.
Issue No. 1 as framed is conceptually misleading and in my opinion it has vitiated the decision under appeal. It cannot be gainsaid that the object of framing issues is to shorten/ narrow down the arena of conflict and pin-point the real dispute to be determi ned. The issue No. 1 as framed by the trial court does not reflect proper perception about the real controversy to be determined. As noticed above, the issue in a passing-off action should be, whether the defendant is selling goods so marked as to be designed or calculated to lead the purchasers to believe that they are the plaintiffs goods. On the pleadings of the parties, in the present case, the issue which ought to have been framed is, whether the use by the defendant of the Trade-name doctor Brand in the context of the design and setting of letters used in the trade-name doctor Brand read in conjunction with the colour combination, the bust photograph ate. is likely to mislead the purchaser to believe that the goods sold under the said trade name are plaintiffs made and a positive finding on this issue would be a sine quo non for a valid decree of perpetual mandatory injunction sought for in the present case. 12. In the instant case, the learned lower court has not only failed to frame proper issue pin-pointing the real dispute but it has failed to record a finding, on a proper self-direction to the relevant factors, that the use by the defendant of the Trade-mark doctor Brand in respect of its goods, in the background of the entire design, the colour, the scheme, the get-up of the label was such as to reasonably create a confusion in the mind of the public that the goods being passing off by the defendant are the goods manufactured by the plaintiff. Mere use of name and brand doctor Brand by the defen dant, would not entitle the plaintiffs to a decree in an action for passing-off as observed in Liasen Ltd. v. Hirley (supra ). The defendant may be perfectly entitled to use the words doctor Brand if the get-up and the use thereof as a label points goods in combination with the bust photograph, texture and scheme of colour, desing of letters, used in the said Trade-name etc.
The defendant may be perfectly entitled to use the words doctor Brand if the get-up and the use thereof as a label points goods in combination with the bust photograph, texture and scheme of colour, desing of letters, used in the said Trade-name etc. is not likely to create any reasonable suspicion about the identity of the manufac turers of the goods. If the things aforestated are found to be reasonably sufficient to tell the people at large that the goods being manufactured and sold by the defendant are not the goods manufactured and sold by the plaintiffs then defendant cannot be restrained from using the said Trade-name which is still unregistered. The learned lower court has illegally taken the order of regis tration of trade-mark in favour of the plaintiff as if the trade-mark had been registered in its favour. As stated supra, only an order for registration was passed operation of which has since been stayed by the Delhi High Court. Observations that trade-mark trade-name under doctor Brand has been registered in favour of the plaintiff from the Dy. Registrar of Trade-marks in Bombay and Dy. Registrar of Trade-marks, Delhi, then it is the plaintiff who can use doctor Brand name and mark on its goods and that too is registered in the name of the plaintiff, then defendant has no right at all to use that Trade-mark doctor Brand to the same goods otherwise it will be infringement of various sections of Trade and Merchandise Act 1958, occurring in the judgment under appeal indicate that the learned Judge has taken the plaintiff to be the registered proprietor of the Trade-mark in question entitled to its exclusive use and it was, perhaps, on that basis that the learned lower court has granted a decree of injunction as well as damages in favour of the plaintiff. As stated above, it was not a case of infringement of registered trade-mark. Rather, it was a case of passing-off. As provided in Section 27 (1) of the Act, no person shall be entitled to institute any proceeding to prevent or to recover damages for the infringement of unregistered trade-mark. The learned Judge has awarded damages to the extent of Rs.
Rather, it was a case of passing-off. As provided in Section 27 (1) of the Act, no person shall be entitled to institute any proceeding to prevent or to recover damages for the infringement of unregistered trade-mark. The learned Judge has awarded damages to the extent of Rs. 2,000 without record ing the requisite finding to sustaia decree for damages in a passing-off action and since it was not a suit for damages, for infringement of trade-mark, the decree passed by the learned lower court cannot be sustained. 13. Considering the facts and circumstances of the case as discussed above, I am of the view that the decree under appeal has to be set aside and the suit to be remanded to the lower court for decision afresh in accordance with law. 14. Accordingly, the appeal succeeds and is allowed. The judgment and decree are set aside and the suit is remanded to the lower court for decision afresh in accordance with law and in the light of the observations embodied in the judgment. Appeal allowed. .