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2008 DIGILAW 222 (CAL)

New Howrah Bakery Bapuji Private Limited v. Pratyosh Kumar Jana

2008-02-21

SANJIB BANERJEE

body2008
Judgment : SANJIB BANERJEE, J. (1.) AN aunt by marriage and her nephew have locked horns over the valuable rights relating to inexpensive tiffin cakes sold primarily at roadside tea stalls in this part of the country. The principal person in control of the plaintiff is the wife of the fathers brother of the first defendant who is the human agency behind the second defendant. Both sets of parties claim to be exclusively entitled to the mark "bapuji" and have the mark as part of their business names. (2.) THE plaintiff claims that the bakery business now continued by it was established by one Sital Chandra Laha in January, 1969 with his daughter aparna Jana later assisting him in such business. The plaintiff suggests that aparna was the previous owner of the mark "bapuji" and had carried on business using such brand name since 1973, though the additional representation in Aparnas application for registration shows the label to be in use since April 10, 1975. The registration of the mark is in class 30 and stands in the name of the plaintiff as the plaintiff was incorporated in 1998 with Aparna, her husband and their son being the first subscribers to its memorandum of association. According to the plaintiff, Aparnas husbands nephew, the first defendant, lived with his uncle and aunt and in such circumstances came to be introduced to Aparnas business. The plaintiff has also obtained registration of the copyright relating to the artistic work in its label in 1997. The sales figures indicated by the plaintiff show a jump from thousands to lakhs to crores between 1973 and 1993 but reveal a decline from about Rs. 3. 26 crore in 2001-02 to about Rs. 2. 71 crore in 2004-05. The plaintiff claims to have advertised its products from 1973 but figures are available for the year 1995-96 and thereafter from 1999-2000 onwards. The plaintiff shows to have expended in excess of Rs. 1 lakh in the two years preceding the institution of the suit. (3.) THE plaintiff and the second defendant, whether in their avatars as bodies corporate or through the principal persons in control prior to the companies being incorporated, have crossed swords at various forums and it is unlikely that matters would rest hereafter. 1 lakh in the two years preceding the institution of the suit. (3.) THE plaintiff and the second defendant, whether in their avatars as bodies corporate or through the principal persons in control prior to the companies being incorporated, have crossed swords at various forums and it is unlikely that matters would rest hereafter. The plaintiff urges that on a reading of the orders made in its favour, the defendants can assert no right in respect of the mark and a blanket injunction has to follow. The defendants counter that the plaintiffs registration is on thin ice and the defendants challenge thereto has been warded off temporarily and is subject to resumption at the appropriate stage. The defendants urge that since the registration is not free from doubt, the other matters that the defendants bring become relevant. (4.) APARNA applied for registration of the mark in 1987. The defendants gave notice of opposition which was disallowed in 1995 and the plaintiffs mark was directed to proceed to registration. The defendants statutory appeal relating to the plaintiffs application no. 476371 was dismissed and the Letters Patent appeal also failed. The defendants carried the Division Bench order to the supreme Court, but by then matters pertaining to the defendants application for registration overtook the parties. (5.) IN 1988 the defendants applied for registration of the same mark claiming user since March, 1974. Aparna opposed as she had applied for and subsequently obtained registration of the same mark. The opposition was disregarded and registration was allowed in favour of the defendants in 1998 of application no. 502172. Aparna preferred a statutory appeal. Such appeal was allowed, the order of registration set aside and the matter remanded for fresh adjudication. In January, 2001 the Registrar of Trade Marks disallowed the defendants application on remand. Such order was noticed by the Supreme court in the defendants special leave petition arising out of the registration of the mark in favour of the plaintiff. The Supreme Court held that in view of the order of the Registrar on the defendants application, "prima facie the right of the petitioner (the defendant No. 1 herein) in this petition to challenge the impugned judgment (the Division Bench judgment rejecting the appeal from the dismissal of the defendants statutory appeal against the order of registration in favour of the plaintiff) would not survive. However, as he has right of appeal against the order dated 22nd January, 2001, we dispose of this special leave petition by directing that if at any point of time the order dated 22nd January, 2001 is set aside and registration granted in favour of the petitioner, then the petitioner will have a right to apply for revival of this special leave petition. " (6.) THE first defendants appeal from the Registrars refusal to allow registration of the mark in his favour succeeded in that the matter was remanded for reconsideration by the Registrar. The plaintiffs Letters Patent appeal from the remand order of the Single Judge has been admitted and the order of remand remains stayed. The Letters Patent appeal is pending. There are observations in the Division Bench order of stay, but these are tentative views taken at the admission stage and, as the defendants correctly suggest, should be no guide to seek any answer to the matters in dispute in the present application. (7.) THE defendants cite the Supreme Court order and the proceedings had between the parties thereafter to assert that neither has the registration in favour of the plaintiff attained finality nor are the defendants precluded from assailing such registration. The plaintiff obtained the certificate of registration on november 15, 2001 though under the no. 476370 rather than its application no. 476371. The defendants have made some noise about the anomaly in the numbering without clearly indicating the legal effect of any difference between the trade mark number and the application number, although ordinarily the trade mark number bears the application number. (8.) THE defendants submit that the inordinate delay of five years between the date of registration and the date of institution of the suit should entail refusal of the interlocutory injunction that the plaintiff seeks, subject to the result that may come about at the trial. The defendants cite the ad-interim order passed on this application when injunction was refused, and the plaintiffs failed appeal therefrom. There is no explanation, the defendants emphasise, as to why the plaintiff chose to remain silent for the five years prior to the filing of the suit and allow the defendants to consolidate their business. The defendants cite the ad-interim order passed on this application when injunction was refused, and the plaintiffs failed appeal therefrom. There is no explanation, the defendants emphasise, as to why the plaintiff chose to remain silent for the five years prior to the filing of the suit and allow the defendants to consolidate their business. The solitary paragraph in the petition, vague as it is, as to the apparent discovery by the plaintiff of the defendants product is put forth by the defendants to resist the interlocutory injunction sought. At paragraph 31 of the petition, the plaintiff has blandly averred that it discovered from the market that the defendants were selling breads and cakes manufactured by the defendants "with very similar or almost identical trade mark and name as that of the registered mark" of the plaintiff. The defendants say that no attempt was made by the plaintiff to explain away the delay in filing the suit and even if the suit may not be dismissed on such count, the plaintiff should not be rewarded with an interlocutory injunction and be left to its fate at the trial. The defendants refer to a passing off action instituted by aparna in a Howrah court prior to the plaintiff obtaining registration and submit that this would show that the defendants had not suddenly started manufacturing products under the mark but had been doing so over a considerable period of time. The defendants speak of the substantial volume of sales of the defendants products and assert that subject to the defendants right to erase the plaintiffs mark from the register, the defendants are entitled to use of the mark as honest and concurrent user with that of the plaintiffs registered mark. (9.) IT is such case under Section 12 of the Trade Marks Act, 1999, which is in pari materia with Section 12 (3) of the predecessor statute of 1958, that the defendants put up in justification of the use of the mark. Such ground and the inordinate, unexplained delay on the plaintiffs part are the two counts put forward to resist the injunction. Section 12 of the 1999 Act reads as follows: "12. Registration in the case of honest concurrent use, etc. ? Such ground and the inordinate, unexplained delay on the plaintiffs part are the two counts put forward to resist the injunction. Section 12 of the 1999 Act reads as follows: "12. Registration in the case of honest concurrent use, etc. ? In the case of honest concurrent use or of other special circumstances which in the opinion of the Registrar, make it proper so to do, he may permit the registration by more than one proprietor of the trade marks which are identical or similar (whether any such trade mark is already registered or not) in respect of the same or similar goods or services, subject to such conditions and limitations, if any, as the Registrar may think fit to impose. " (10.) THE plaintiff refers to a judgment reported at (2004) 3 SCC 90 (Midas hygiene Industries (P) Ltd. and anr. v. Sudhir Bhatia and ors.) to fight off the ground of delay. The dates are not clear from the judgment but the principle may be noticed from paragraph 5 of the report: "5. The law on the subject is well settled. In cases of infringement either of trade mark or of copyright, normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the mark was itself dishonest. " (11.) IT is of significance that the Supreme Court lays down the law that the grant of injunction becomes necessary if it prima facie appears that the adoption of the mark was itself dishonest. Such proposition is of great relevance in the context of a defence of honest concurrent use. As would appear from the relevant provision, "concurrent" is qualified by "honest" and the mere fact that two identical or similar marks have been used for a long time would not be an answer unless the honesty in the adoption thereof by the defendant is established. (12.) THE plaintiff has relied on a judgment reported at (2006) 8 SCC 726 (Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel and ors.) as to whether laches would amount to acquiescence. (12.) THE plaintiff has relied on a judgment reported at (2006) 8 SCC 726 (Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel and ors.) as to whether laches would amount to acquiescence. The issue has been discussed at paragraphs 100 to 110 of the report and the plaintiff specifically refers to the supreme Courts quoting with approval of a passage from Kerr in his Treatise on the Law and Practice of Injunction, (6th Edn. at pp. 360-361) that lapse of time unaccompanied by anything else would be no more a bar to a suit for an injunction in aid of the legal right than it is to an action for deceit. The defendants, however, suggest that delay would not be altogether irrelevant in every case and refer to the last sentence at paragraph 102 of the report to argue that an explanation as to delay is called for or the plaintiff may not have his injunction: "102. ?delay in some cases may defeat equity but the chronology of events noticed hereinbefore do not suggest that the appellants consciously allowed the respondents to use the trade mark. " (13.) A Division Bench judgment of this Court reported at 2007 (1) CHN 143 (Pankaj Jaiswal and Anr. v. Virendra Prasad Jaiswal and ors.) is next placed by the plaintiff where the Midas principle has been noticed in course of dismissing an appeal from an order granting interlocutory injunction. The celebrated Duck back case reported at AIR 1997 SC 1398 (M/s. Bengal Waterproof Limited v. M/s. Bombay Waterproof Manufacturing Company and anr.) is cited by the plaintiff for the enunciation of the following proposition at paragraph 8 of the report: "8. ? It is obvious that thus the alleged infringement of plaintiffs trade mark duck BACK and the alleged passing off action on the part of the defendants in selling their goods by passing off their goods as if they were plaintiffs goods has continued all throughout uninterrupted and in a recurring manner. ? It is obvious that thus the alleged infringement of plaintiffs trade mark duck BACK and the alleged passing off action on the part of the defendants in selling their goods by passing off their goods as if they were plaintiffs goods has continued all throughout uninterrupted and in a recurring manner. It is obvious that such infringement of a registered trade mark carried on from time to time would give a recurring cause of action to the holder of the trade mark to make a grievance about the same and similarly such impugned passing off actions also would give a recurring cause of action to the plaintiff to make a grievance about the same and to seek appropriate relief from the court. It is now well settled that an action for passing off is a common law remedy being an action in substance of deceit under the Law of Torts. Wherever and whenever fresh deceitful act is committed the person deceived would naturally have a fresh cause of action in his favour. Thus every time when a person passes off his goods as those of another he commits the act of such deceit. Similarly whenever and wherever a person commits breach of a registered trade mark of another he commits a recurring act of breach of infringement of such trade mark giving a recurring and fresh cause of action at each time of such infringement to the party aggrieved. It is difficult to agree how in such a case when in historical past earlier suit was disposed of as technically not maintainable in absence of proper reliefs, for all times to come in future defendant of such a suit should be armed with a licence to go on committing fresh acts of infringement and passing off with impunity without being subjected to any legal action against such future acts. ?" AIR 1965 SC 980 (Kaviraj Pandit Durga Dutt Sharma v. Navaratna pharmaceutical Laboratories) is placed by the plaintiff as to what would amount to infringement. ?" AIR 1965 SC 980 (Kaviraj Pandit Durga Dutt Sharma v. Navaratna pharmaceutical Laboratories) is placed by the plaintiff as to what would amount to infringement. At paragraph 28 the Supreme Court held that the plaintiff in an action for infringement has to make out that the use of the defendants mark was likely to deceive but where the defendants mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further evidence is required to be adduced by the plaintiff that the plaintiffs rights are violated. The plaintiff here says that the defendants mark is not similar, it is identical and, by the defendants admitted use thereof, there is infringement. (14.) TWO further cases, one of a Single Judge of the Delhi High Court reported at AIR 1990 Delhi 19 (M/s. Hindustan Pencils Pvt. Ltd. v. M/s. India Stationery products Co. and anr.) and the other of a Single Judge of the Bombay High Court reported at 1998 PTC (18) 267 (Biochem Pharmaceutical Industries v. Biochem synergy Limited) have also been placed. In the Delhi case, it was held that laches or delay is not the same as acquiescence and a distinction was made between inordinate delay and acquiescence. Relying on an American decision, the Delhi high Court held that mere passage of time would not constitute laches, but if the passage of time can be shown to have lulled the defendant into a false sense of security, and the defendant acts in reliance thereon, the Court may find the plaintiff guilty of laches. In the Bombay case it has been held that the question of balance of convenience is irrelevant in an action for infringement. Such judgment was rendered in a matter where there was delay on the plaintiffs part to approach court. Though the delay was for a period of about three years in the bombay case, it was held that "balance of convenience becomes relevant in an infringement action in a very rare case. " (15.) THE defendants have sought to distinguish the judgments cited by the plaintiff on the ground that there is no absolute proposition that delay is not a relevant consideration. " (15.) THE defendants have sought to distinguish the judgments cited by the plaintiff on the ground that there is no absolute proposition that delay is not a relevant consideration. The question is addressed, and very rightly so, with the help of an absurd example: a registered owner who brought an action on the last day of the validity of his registration or on the last day of the extended period of validity without an explanation as to delay may not be entitled to an interlocutory injunction for the asking. It would appear that there is some room left for such an argument to be advanced in an appropriate case, notwithstanding the authorities referred to above. But the delay of nearly five years in the instant case with the history of the previous litigation would not permit the plaintiffs admitted inaction to be construed as acquiescence. (16.) THE answer probably lies elsewhere. An action for deceit has, as the Midas case shows, only to be countered by honesty. The facts here, despite the plaintiff glossing over the matter, would not lead to a conclusion of honest adoption of the mark by the first defendant or the defendants. Even on the anvil of a test on balance of probabilities, interlocutory injunction may not be refused if the court is of the view that an injunction would, more likely than not, ensue at the trial. It is the prima facie case that is to be assessed. (17.) THE defendants attempt to rely on their application for registration made in 1988 and the user claimed since March, 1974. Though the papers filed in support of the registration have not been referred to in the defendants affidavit, nor have the defendants referred to the dismissal by default of Aparnas passing off action in a Howrah court, the defendants seek to rely on such matters citing the apprehended inconvenience at the appellate stage of invoking the provisions of Order 41 Rule 27 of the Code to bring such matters on record. The papers have not been accepted but the facts have been taken into account for whatever is their worth. (18.) THE defendants have also referred to Section 33 (1) (b) of the 1999 Act as to the effect of acquiescence. Section 33 of the 1999 Act provides as follows: "33. Effect of acquiescence. ? The papers have not been accepted but the facts have been taken into account for whatever is their worth. (18.) THE defendants have also referred to Section 33 (1) (b) of the 1999 Act as to the effect of acquiescence. Section 33 of the 1999 Act provides as follows: "33. Effect of acquiescence. ? (1) Where the proprietor of an earlier trade mark has acquiesced for a continuous period of five years in the use of a registered trade mark, being aware of that use, he shall no longer be entitled on the basis of that earlier trade mark? (a) to apply for a declaration that the registration of the later trade mark is invalid, or ( b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used, unless the registration of the later trade mark was not applied in good faith. (2) Where sub-section (1) applies, the proprietor of the later trade mark is not entitled to oppose the use of the earlier trade mark, or as the case may be, the exploitation of the earlier right, notwithstanding that the earlier trade mark may no longer be invoked against his later trade mark. " (19.) THE reliance on Section 33 appears clearly to be misplaced. Section 33 presupposes the mark the use whereof is acquiesced in, to be a registered mark. The expression "the later trade mark" in clause (b) refers to "a registered trade mark" used in the opening words of the sub-section. Section 33 is a special right conferred on a registered owner to ward off a challenge to the registration or the use of the registered mark by an earlier user of the same mark. (20.) SINCE it is a tentative adjudication as to the honest adoption of the mark by the defendants that is called for, it is best to notice the defendants version of things juxtaposed to what the plaintiff asserts. The plaintiff has claimed to be running such confectionery business under her father since 1969 and having taken over such business and manufacturing products under the "bapuji" mark since 1973 (or even April, 1975 as would appear from the plaintiffs representation in connection with the application for registration). The plaintiff has claimed to be running such confectionery business under her father since 1969 and having taken over such business and manufacturing products under the "bapuji" mark since 1973 (or even April, 1975 as would appear from the plaintiffs representation in connection with the application for registration). The plaintiff says that the first defendant and his brother lived with Aparna and her husband before the first defendants brother returned to his native village in 1975 and the first defendant was thereafter introduced in Aparnas business and was associated with such business till April 16, 1987. It is more than likely that given the nature of relationship between Aparna and the first defendant and the fact that it was admittedly Aparnas father who started the confectionery business, that it would be the first defendant who would be the later entrant in the business and the later user of the mark. The defendants have not dealt with the averments at paragraphs 6, 7 and 8 of the petition save with the cavalier assertion at paragraph 17 of their affidavit denying the various statements contained in paragraphs 1 to 10 of the petition except what were matters of record. (21.) AGAIN, at paragraph 18 of the defendants affidavit, while insisting that the defendants had honestly used the mark since 1974, the following version of things appears: "18. ?it is stated that the petitioner company was originally doing business as New Howrah Bakery and used to use the trademark "bapuji" under licence from the respondent no. 1. It is stated that the respondent claims rights in the trademark "bapuji" as it took over the business of new Howrah Bakery which was actually the business of the father of Smt. Aparna Jana, the proprietress of said New Howrah Bakery. It is stated that there is no valid assignment in favour of Smt. Aparna Jana at any point in time and therefore Smt. Aparna Jana did not acquire and own the trademark validly and no right has accrued in favour of the petitioner or its predecessor in title in respect of the trademark "bapuji". It is stated that there is no valid assignment in favour of Smt. Aparna Jana at any point in time and therefore Smt. Aparna Jana did not acquire and own the trademark validly and no right has accrued in favour of the petitioner or its predecessor in title in respect of the trademark "bapuji". ?" (22.) EVEN though such account appears to be improbable, particularly the defendants assertion that Aparnas fathers business came to be controlled by the first defendant ahead of Aparna, it may have been more acceptable if the defendants had demonstrated their use of the mark prior to Aparnas or in 1974 as they claim when they first adopted the mark. In the many pages that accompany the defendants affidavit, there appears to be no document? at least none has been shown by the defendants despite the plaintiffs challenge at the hearing ? to show user of the mark since 1974. There is no material that the defendants bring to assert adoption of the mark at the time that they claim, far less documents to suggest honest adoption. (23.) IN an action of such nature, there is the plaintiffs goodwill in a mark that has to be considered just as the likelihood of unwary customers being deceived that has to be weighed. There appears to be no principle that merely because an action for infringement is delayed for such duration as in the present case, the court will require the plaintiff to get his injunction at the trial even if the facts otherwise warrant the grant of interlocutory injunction. If the adoption of the mark is as deliberate and dishonest as it tentatively appears on the materials now shown, mere prolonged delay in asserting the rights in respect of a registered mark would not disentitle the plaintiff to interim protection. It may be a relevant consideration at the ad-interim stage where the court may afford the defendant an opportunity to rely on material to suggest that the plaintiffs conduct amounts to acquiescence, but not at the final hearing of the plaintiffs motion when neither acquiescence nor honest adoption is demonstrated by the defendant. (24.) IN Aparna having filed the Howrah suit prior to the registration, it is evident that the defendants had been using the mark prior to the registration in favour of the plaintiff. To such extent, there has been concurrent use. (24.) IN Aparna having filed the Howrah suit prior to the registration, it is evident that the defendants had been using the mark prior to the registration in favour of the plaintiff. To such extent, there has been concurrent use. But the law protects not mere concurrent use but honest concurrent use. The defendants have neither been able to establish that it was they or the first defendant who first came upon or coined the mark, nor does it appear that there was any honesty about the adoption thereof whenever it was adopted. (25.) THE defendants here ought to be restrained immediately from using the mark "bapuji" in connection with any confectionery item. There will be an order in terms of prayers (a) and (b) of the notice of motion, but no receiver is called for in view of the admitted position that the defendants have been using the "bapuji" mark in relation to their products for a substantial period. The defendants are restrained from using such mark any further and shall ensure that their products under the infringing mark do not find place in the market beyond a week from date. The defendants will pay costs assessed at 3000 GMs to the plaintiff.