Financial Software and Systems Pvt. Ltd. , rep. by its Head-Recruitment and Administration, R. Nandakumar, Chennai v. Flextronics Software Systems Ltd. , Haryana
2006-08-29
S.R.SINGHARAVELU
body2006
DigiLaw.ai
Judgment :- S.R. SINGHARAVELU, J. Original Applications No. 155 and 156 of 2006 are filed by the plaintiff to grant an order of ad-interim injunction restraining the defendant from passing off/infringing the goods and/or services as that of the plaintiff using the mark “FSS”. Applications No. 1064 and 1065 of 2006 are filed by the defendant to reject the plaint and to revoke the leave granted to the plaintiff. 2. Plaintiff is a Software Company carrying on business inter alia of providing Online, Real Time, Electronic transaction processing and switching for financial and non-financial transactions from/to multiple delivery channels and payment systems and co-networks including Automated Teller Machines (ATMs), Point of Sale terminals (PoS), ATM development and management, ATM sharing between banks, international and Domestic interchanges such as Master Card, Visa and others, Value Added Services viz., Mobile top-up, Utility Bill pay etc., as an Application Service Provider to various banks and financial institutions and selling its products and rendering various services under the Trade Mark, artistic work, name and style “FSS” since 1991. The plaintiff was incorporated vide the corporate name styled as ‘Financial Software and Systems Private Ltd’., and since then using the abbreviation “FSS” as a brand equity. 3. Towards consolidating plaintiffs title and right to the said mark “FSS”, the plaintiff has already obtained registration of the said mark as an artistic work under the Copyright Act, 1957 and Certificate dated 21.7.2003 was issued by the Registrar of Copyright. Plaintiff has also filed application under the Trade Marks Act, 1999 for registration of the said mark under the said Act. The applications are pending registration with the Registrar of Trade Marks, Trade Marks Registry, Chennai. 4. Due to the extensive and sustained usage and wide publicity over the past 14 years, the plaintiff has gained prominence, distinctiveness and unique recognition among the concerned public at large. It is also claimed that by virtue of maintaining the quality and genuineness of the products, prompt and reliable services, it has carved out a niche for itself in the market. Plaintiff seems to have a turnover of Rs. 69.11 crores for the financial year ending 31.3.2005. It also owns a domain name and website having a uniform resource locator (URL) called “http//www.fss.co.in”. Of course with the growth of internet usage and electronic commence, the strategic importance of domain names as business identifiers has grown significantly. 5.
Plaintiff seems to have a turnover of Rs. 69.11 crores for the financial year ending 31.3.2005. It also owns a domain name and website having a uniform resource locator (URL) called “http//www.fss.co.in”. Of course with the growth of internet usage and electronic commence, the strategic importance of domain names as business identifiers has grown significantly. 5. The defendant also was in the software business and its original name was Hughes Software Systems Limited, which was incorporated in the year 1991 and it was called so till 2005. The defendants name was changed from Hughes Software Systems Limited to Flextronics Software Systems Limited, consequent to the defendant being acquired by Flextronics International Limited in 2005. Vendor of defendant had no occasion to use the mark “FSS”. It may even be unintentional on the part of the defendant in changing its name from Hughes Software Systems Limited to Flextronics Software Systems Limited, consequent upon defendant being acquired by Flextronics International Limited. But, however, when plaintiff has got a prior use of the word “FSS” with its artistic work, the subsequent use of the same by defendant, even without the artistic work may not only infringe the right of plaintiff but also cause damage in the goodwill carried on by the plaintiff. Therefore, the suit is instituted on the basis of passing off action. 6. True it is that the copyright was registered by the plaintiff and its application for registration of Trade Mark is pending. It is equally true that there is no prayer on account of infringement of copyright. Based upon this fact as well as that there was no registration made under the Trade Marks Act and that the non-obstante clause under Section 134(2) of the Trade Marks Act, 1999 may not apply to the passing off action, defendant resisted the case of plaintiff. 7. Ms. Gladys Daniel, learned counsel appearing for the defendant submitted that there is no cause of action that has arisen for filing the suit before this Court.
7. Ms. Gladys Daniel, learned counsel appearing for the defendant submitted that there is no cause of action that has arisen for filing the suit before this Court. It was also submitted that jurisdiction with respect to passing off action can arise only at the place where commercial sale is taking place through a stockist and distributor; and that inasmuch as plaintiff has not averred in the plaint that the defendant has a place of business or branch office or distributor within the jurisdiction of this Court; and that there is no part of cause of action that has arisen within the jurisdiction of this Court. 8. In this respect, reliance was also placed upon H.P.H.O. Marketing & Proceeding Corporation v. M.M. Breweries H.P.H.O. Marketing & Proceeding Corporation v. M.M. Breweries H.P.H.O. Marketing & Proceeding Corporation v. M.M. Breweries AIR 1981 P&H 117 , wherein it was observed that a suit for passing off or injunction on account of infringement of Trade Mark, the cause of action partly or wholly, can arise in a given jurisdiction only if it is the defendant who is proved to have directly made sale of goods under the impugned Trade Mark, within that jurisdiction, not to an individual consumer but to a distributor, wholesaler or retailer and that such a sale is on a commercial scale. 9. It was also pointed out that as was held in Premier Distilleries Pvt. Ltd. v. Shshi Distilleries 2001 PTC 907 (Mad.-D.B. 907), the cause of action can arise where deceit is practised. It cannot arise at a location where the plaintiff who claims the relief, chooses to lodge an application for registering his mark, without any deceit having been practiced within that jurisdiction. Thus, it was the contention of the learned counsel for the defendant that there is no cause of action that has arisen enabling the plaintiff to invoke the jurisdiction of this Court. 10. But in para 10 of the plaint, it has been stated as follows: “The plaintiff states that this is nothing short of violation and infringement of the plaintiffs Copyright and passing off the plaintiffs Trade Mark over the internet, an offence per se”. Other domain name and website particulars have also been given in para 6 of the plaint.
10. But in para 10 of the plaint, it has been stated as follows: “The plaintiff states that this is nothing short of violation and infringement of the plaintiffs Copyright and passing off the plaintiffs Trade Mark over the internet, an offence per se”. Other domain name and website particulars have also been given in para 6 of the plaint. Thus, an allegation is made in the plaint as if the defendant over internet had used the mark of “FSS”, which had a prior use by the plaintiff. 11. Inthis connection, Mr. Arvind P. Datar, learned senior counsel appearing for the plaintiff relied on the decision in Casio India Co. Ltd v. Ashita Tele Systems Pvt. Ltd. 2003 (27) PTC 265 (Del.), which was a case for infringement and passing off action. Plaintiffs Trade Mark and trade name CASIO was imitated and defendant marketing its productions through website with the domain name “www.casioindia.com”: it was held that there was a prima facie case made out by the plaintiff and injunction was granted. By observing that irrespective of any Trade Mark right, it has an inherent right under common law to seek a restraint on any other business entity from using its corporate name to do business and that too in the same class of products; holding that no specific assignment of Trade Mark or authority is required for instituting the suit, it was further held that once access to the impugned domain name website, could be had from anywhere else, the jurisdiction in such matters cannot be confined to the territorial limits of the residence of the defendant and that furthermore, in a passing off action it is not incumbent upon the plaintiff to prove any actual sale or any particular act of deception, mere likelihood of deception and that the fact that the website of defendant No. 1 can be accessed from Delhi was sufficient to invoke the territorial jurisdiction of the Delhi High Court. Therefore, basing upon that case law, it would be evident that by access to internet and the usage of the same in Chennai, this Court can have jurisdiction. 12.
Therefore, basing upon that case law, it would be evident that by access to internet and the usage of the same in Chennai, this Court can have jurisdiction. 12. Learned counsel for the defendant next raised an objection regarding failure to file application for joinder of cause of action and in this connection, Clause 14 of the Letters Patent was relied on, where it was found that the said High Court shall have original jurisdiction in respect of one of such causes of action, it shall be lawful for the said High Court to call on the defendant to show cause why the several causes of action should not be joined together in one suit. 13. In this connection, reliance was also placed on Dhodha House v. S.K. Maingi Dhodha House v. S.K. Maingi Dhodha House v. S.K. Maingi 2006 (i) CTMR 55. But it is to be noted that there can be a composite suit for Trade Mark and Copyright, as was held in Tata Oil Mills Co. Ltd. v. Reward Soap Works AIR 1983 Del. 286 , wherein the following was held: “The comparative scopes of a Copyright Trade Mark registration are different, even though where a design on a wrapper is registered under the Copyright Act, there is, to an extent, an overlapping between the two remedies. Some controversy is no doubt, possible if the mere jurisdiction of the Court to entertain an action for infringement of copyright would also give the Court the necessary jurisdiction to deal with the corresponding infringement of Trade Mark, where both constitute part of a composite suit. In view of the undoubted jurisdiction of this Court in relation to the infringement of Copyright, Court would be justified in granting injunction of both the Trade Mark and the Copyright at this stage of the proceedings, particularly, where there is a specific averment in the plaint, whatever it may be worth, that the plaintiff has been selling the goods, inter alia, within the territorial jurisdiction of this Court”. So, the objection raised by the defendant regarding jurisdiction is not accepted and no rejection of plaint could be made on that ground. 14. There are also proper allegations made in the plaint about the internet usage of defendant regarding “FSS” mark.
So, the objection raised by the defendant regarding jurisdiction is not accepted and no rejection of plaint could be made on that ground. 14. There are also proper allegations made in the plaint about the internet usage of defendant regarding “FSS” mark. True it is that there is no suit based upon infringement of Copyright and no Trade Mark has so far been registered by the plaintiff. The relief sought for in the plaint is only based upon the passing off action. Therefore, the argument advanced by the learned counsel for the defendant that it is only the artistic work of the word “FSS” involving the manner in which it was artistically used as a monogram of the plaintiff, that could not be infringed and the mere use of alphabet of “FSS” may not infringe the Copy- right, could not be accepted because prayer sought for is not based upon the infringement of Copyright; but merely based upon the passing off action. Therefore, de hors the usage of defendant without artistic mark of word “FSS” used by the plaintiff, the mere usage of the alphabets “FSS” by the defendant may do harm to plaintiff as there was a prior use thereon by the plaintiff and the prayer asked for is based only upon the passing off action. 15. Of course, the learned counsel for the defendant relied on Associated Electronics v. Sharp Tools AIR 1991 Kar. 406 that there can be no Copyright in the word (sic wording) of words, but the right can only be in the artistic manner in which the same is written. But we are not concerned with the artistic work because the prayer is not based upon infringement of Copyright. 16. The next question that would straightaway arise is whether the plaintiff would be entitled for the injunction. Both the plaintiff as well as the defendant are in the same software business. The plaintiff is a prior user. It is only in 2005 after defendant being acquired by Flextronics International Limited, their erstwhile name Hughes Software Systems Limited was converted as Flextronics Software Systems Private Limited as to use the word “FSS”. Originally, their domain name was “HSS” and the plaintiffs domain name was “FSS” and the plaintiff was a prior user of that name.
It is only in 2005 after defendant being acquired by Flextronics International Limited, their erstwhile name Hughes Software Systems Limited was converted as Flextronics Software Systems Private Limited as to use the word “FSS”. Originally, their domain name was “HSS” and the plaintiffs domain name was “FSS” and the plaintiff was a prior user of that name. Plaintiff had created goodwill over the same for the long continued service and the way in which they called it as a niche for use in the market. The prior user will have an exclusive right and the same was so observed in the following cases: In Uniply Industries Ltd. v. Unicorn Plywood Pvt. Ltd. AIR 2001 SC 2083 : 2001 (5) SCC 95 , it was held as follows: “There is a common field of activity between the two parties in respect of goods and Trade Marks sought to be used by either are identical. Therefore, the only question that needs to be decided is as to who is the prior user. In deciding this question, the High Court relied upon: (1) advertisement made by the respondents, (2) invoices, and (3) letters of dealers”. 17. In Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra Ltd. AIR 2002 SC 117 : 2002 (2) SCC 147 , it was observed as follows: “The name “Mahindra” having earned a reputation for a certain standard of good services. Defendant Company incorporated as “Mahendra & Mahendra Paper Mills Ltd”, was yet to commence its business. In such circumstances, in view of the likelihood and probability of creation of an impression of a connection of the defendants Company with the plaintiff and the possibility of a prejudicial effect on plaintiffs business and trading activities, trial Court rightly held that a prima facie case of irreparable prejudice stood made out in favour of the plaintiff which called for an interim injunction restraining the defendant company from using the name “Mahendra” or “Mahendra & Mahendra” for the purpose of its trade and business”.
It was held as follows: “Without intending to be exhaustive, some of the principles which are accepted as well settled for determining whether to grant an interim injunction in a suit for passing off are: that whether there is a likelihood of deception or confusion arising is a matter for decision by the Court, and no witness is entitled to say whether the mark is likely to deceive or to cause confusion; that all factors which are likely to create or allay deception or confusion must be considered in combination; that broadly speaking, factors creating confusion would be, for example, the nature of the market itself, the class of customers, the extent of the reputation, the trade channels, the existence of any connection in course of trade, and others”. Thus, the prior use was a predominant fact in granting injunction. That may go in favour of plaintiff as it has got a prior use. 18. So far as domain name is concerned, it was held in Satyam Infoway Ltd. v. Siffynet Solutions (P) Ltd. 2004 (6) SCC 145 , as follows: “The respondents choice of the word “Siffy” not original but inspired by the appellants business name and that the respondents explanation for its choice of the word “Siffy” as a corporate and domain name is an invented post-rationalisation. … An action for passing off, as the phrase “passing off’ itself suggests, is to restrain the defendant from passing off its goods or services to the public as that of the plaintiffs. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public… The second element that must be established by a plaintiff in passing off action is misrepresentation by the defendant to the public. What has to be established is the likelihood of confusion in the minds of the public (the word” public “ being understood to mean actual or potential customers or users) that the goods or services offered by the defendant are the goods or the services of the plaintiff. ……The word misrepresentation does not mean that the plaintiff has to prove any mala fide intention on the part of the defendant. Of course, if the misrepresentation is intentional, it might lead to an inference that the reputation of the plaintiff is such that it is worth the defendants while to cash in on it”. 19.
……The word misrepresentation does not mean that the plaintiff has to prove any mala fide intention on the part of the defendant. Of course, if the misrepresentation is intentional, it might lead to an inference that the reputation of the plaintiff is such that it is worth the defendants while to cash in on it”. 19. In Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia 2004 (3) SCC 90 , it was held as follows: “Respondent offering no explanation as to why it had changed the offending carton to look almost identical to that of the appellant at a subsequent stage indicates a prima facie dishonest intention to pass of his goods as those of the appellant and interim injunction ought to be granted and continued”. 20. For the reasons stated above, applications No. 1064 and 1065 of 2006 are dismissed. Since the plaintiff has got a prima facie case to grant him an order of interim injunction for passing off, O.A. No. 156 of 2006 is allowed and interim injunction is granted. No order is passed in O.A. No. 155 of 2006.