Unichem Laboratories (P) Ltd. v. Cadila Healthcare (P) Ltd.
2009-07-03
V.JAGANNATHAN
body2009
DigiLaw.ai
Judgment :- This revision petition by the defendant before the court below involves the question of jurisdiction to entertain the suit filed by the plaintiff in a passing off action. The objection raised by the defendant as regards want of jurisdiction by the trial Court was negatived by the learned Judge by answering the additional issue No.1 in favour of the plaintiff. This has led to the present revision by the defendant. 2. The plaintiff went before the trial Court by contending that the plaintiff has been a reputed manufacturer engaged in the business of manufacture and distribution of various health care products including pharmaceutical products and medicaments and one of its pharmaceutical products is being sold under the trade mark LOSACAR since the month of June 1998 and the said product had enjoyed goodwill of all those concerned in the field and more particularly among the Doctors, Chemists, and the consuming public and within a short time, the said product LOSACAR came to be identified with the plaintiff's company and none-else. The plaintiff applied for registration of the said trademark LOSACAR on 28.2.1997. It was also averred in the plaint that plaintiff's product LOSACAR was accepted very well and it is evident from the sales turnover since the date of introduction into the market till 30.9.1998. 3. It was at this juncture, that the plaintiff came across a press report wherein, a new product was sought to be introduced into the market under the trademark LOSAR. As the product of the plaintiff LOSACAR and the product which the defendant wanted to introduce into the market namely LOSAR were the drugs meant for treating patients with hypertension, and as the product launched by the defendant LOSAR appeared to be similar and deceptive and as both names also sound phonetically similar, the plaintiff averred in the plaint that the attempt by the defendant to introduce its product with the name LOSAR is nothing but an attempt to pass off the product of the defendant as if it is the product of the plaintiff. Therefore, the plaintiff sought the relief of an order of perpetual injunction against the defendant and its agents, dealers, stockists and others directly or indirectly from using in any manner, the product with the trademark LOSAR and also for damages and other reliefs. 4.
Therefore, the plaintiff sought the relief of an order of perpetual injunction against the defendant and its agents, dealers, stockists and others directly or indirectly from using in any manner, the product with the trademark LOSAR and also for damages and other reliefs. 4. The petitioners herein being the defendants denied the plaint averments by contending in the written statement among other things that it is a common practice in the pharmaceutical trade to coin trademarks from generic names and the trademark LOSAR is drawn from generic name LOSARTAN POTASIUM and therefore, the defendant made an application for registration of their trademark on 4.3.1997 and it is the case of the defendant that defendant honestly adopted his trademark and there is no question of defendant trying to pass off their goods as and that of goods of the plaintiff as falsely alleged in the plaint. It was also contended that defendant too has its own reputation in the field and it has been manufacturing and selling pharmaceutical products in the factories at Goa, Maharashtra and other places. It is also contended that two trademarks are not deceptively similar and there is no question of any deception or confusion arising from the use of trademark by the defendant because the goods are to be made available on a prescription of a registered medical practitioner. One other contention taken in the written statement was that plaintiff has not averred that plaintiff's products are sold in Bangalore and even the documents which are annexed to the plaint do not give an indication of any sales of plaintiff's products in Bangalore. Therefore, plaintiff on its own standing, has no cause of action to file the suit and consequently, the Civil Court had no jurisdiction to entertain the suit and plaint will have to be returned to the plaintiff for presentation before the proper Court. 5. An application was also filed by the defendant by filing I.A.No.10 under Order 7 Rule 10 of the CPC for direction to return the plaint to the plaintiff for being presented before the proper Court.
5. An application was also filed by the defendant by filing I.A.No.10 under Order 7 Rule 10 of the CPC for direction to return the plaint to the plaintiff for being presented before the proper Court. As the question of jurisdiction was raised both in the course written statement as well as by filing the separate application, learned Judge of the trial Court framed an additional issue No.1 relating to the jurisdictional issue and after considering the argument advanced before it, held that the Court has territorial jurisdiction to entertain the suit. This in substance is the background for this revision petition being preferred by the defendant. 6. I have heard the learned Advocate General of Maharashtra Shri Ravi Kadam for the petitioner and the learned Sr.Counsel Shri Mihir Thakore for the respondent and also heard submission put forward by the learned Counsel Shri K.B.S. Manian for the petitioner supplementing the argument of the Advocate General as well as Shri Bijal Chhatrapati for the respondent. I have also perused the entire record of this case. 7. The first and the foremost submission put forward by the learned Advocate General for the petitioner is that plaintiff in a passing off action, will have to establish the first and the foremost factor of goodwill upon the concerned members of the public and if the first element itself is absent, the suit will have to be dismissed. In other words, it is argued that plaintiff will have to show that his goods are in the market at Bangalore and it is not enough to say in the plaint that defendant's goods are in Bangalore or intended to be launched in Bangalore. Therefore, mere averment in the plaint that plaintiff's drug LOSACAR is in the market at Ahmedabad itself will not be sufficient to say that the plaintiff's goods are also available in Bangalore. Therefore, on a reading of the entire plaint, it cannot be made out that the plaintiff has established goodwill among the public in Bangalore and when the plaintiff's drug is not at all sold in Bangalore, the question of passing off, of the defendant's drug LOSAR as if it is the product of the plaintiff does not arise.
Therefore, on a reading of the entire plaint, it cannot be made out that the plaintiff has established goodwill among the public in Bangalore and when the plaintiff's drug is not at all sold in Bangalore, the question of passing off, of the defendant's drug LOSAR as if it is the product of the plaintiff does not arise. The learned Advocate General also referred to the plaint in this connection to contend that there is a bald plea in the entire plaint and plaint does not indicate any particulars as regards plaintiff's goods being sold in Bangalore or any advertisement having been taken out in Bangalore and therefore, the essential ingredients itself are lacking. When the plaintiff is not carrying on any business of his product in Bangalore the entire plaint averments gives the impression that the plaintiff's drug is hanging in air. The learned Counsel also argued that when the plaintiff's goods have not entered the market in Bangalore in any form namely by way of goods being sold in Bangalore or any advertisement having been carried out in Bangalore, the plaintiff cannot be permitted to do what is known as forum shopping since the plaintiff has failed to mention in the plaint about it having established goodwill in Bangalore nor are there being any indication in the entire plaint as regards the plaintiff's products having a wide reputation all over the country, the question of the plaintiff being affected on account of defendant's drug LOSAR being introduced in Bangalore will not and cannot arise. Since the plaintiff has failed to make submission in the plaint concerning the reputation and goodwill earned by its product, the mere fact of defendant's goods being sold in Bangalore or being intended to be introduced in Bangalore cannot be in anyway affect the plaintiff's product nor can it be said that product of a defendant would in any way deceive the general public. 8. The aforesaid argument of the Advocate General of Maharashtra for the petitioner was also supplemented by the learned Counsel Shri K.B.S. Manian for the petitioner by contending that unless the plaintiff avers in the plaint that plaintiff's goods are also in the market at Bangalore, the plaintiff cannot approach the Court at Bangalore and seek the relief only on the footing that defendant's goods are in Bangalore.
In other words, an action cannot precede the cause and without the plaintiff having entered the market at Bangalore in any form, it would not be permissible to entertain the suit of the plaintiff. Therefore, referring to the provisions of the Order 7 Rule 1 (e), (f) and (g), it is argued that in the instant case, the plaintiff is bereft of the fact showing that the Court has got jurisdiction and facts constituting cause of action are also absent and even as regards the plaintiff having entered market in Ahmedabad is concerned, the submission made by the learned Counsel for the petitioner is that all that the plaintiff has annexed to the plaint is nothing but various invoices which were issued to the distributors but not to the common consumers. Drawing distinction between an action of infringement for trademarks and passing off action, the learned Counsel submitted that in a passing off action, it is essential to establish element of goodwill and the plaintiff cannot stand on the foundation of plaintiff being a prior user. Therefore, when there is no averment in the plaint indicating the vendible nature of the plaintiff's case, the question of defendant passing off its product as that of the plaintiff therefore will not arise. The learned Counsel argued that in a passing off action, it is very relevant for the plaintiff to say that plaintiff's product is also in the market at Bangalore. 9. As far as the basis for the suit of the plaintiff is concerned, the learned Counsel for the petitioner referring to document No.9 submitted that all that was mentioned in the advertisement was that the defendant namely Unichem Laboratories Pvt. Ltd. ('Unichem' for short), introduces new class of drugs for the first time in the country. Therefore, the said statement cannot give the necessary foundation for the plaintiff to lay its suit in Bangalore. 10. The decisions upon which the learned Sr.Counsel for the petitioner placed reliance are the ones reported in (2004) 6 SCC 145 , 1998 PTC (18) 545, XXXVIII CH. D 139, 1992 PTC 1, 2001 AIHC 4901, AIR 2006 SC 730, (2004) 7 SCC 447 , (2006) 5 SCC 638 , 2007 (34) PTC 542, 2007 (35) PTC 627, 2007 (35) PTC 542 (Mad), & 1996 PTC (16).
D 139, 1992 PTC 1, 2001 AIHC 4901, AIR 2006 SC 730, (2004) 7 SCC 447 , (2006) 5 SCC 638 , 2007 (34) PTC 542, 2007 (35) PTC 627, 2007 (35) PTC 542 (Mad), & 1996 PTC (16). Relying on the aforesaid decisions of the Apex Court as well as other High Courts, learned Advocate General for the petitioner submitted that in view of the law laid down in the cases referred to by him, the question of Civil court having the jurisdiction to entertain the suit of the plaintiff cannot arise and as such, the impugned order of the trial Court will have to be set-aside and the plaintiff will have to be directed to present its suit in proper Court. 11. On the other hand, learned Sr. Counsel Shri Mihir Thakore for the respondent-plaintiff put forward the following submissions. It is the provision contained in section 20 of the CPC that will have to be considered in order to decide as to whether the trial Court has got jurisdiction to entertain the suit of the plaintiff. While admitting that the plaintiff has not pleaded in the plaint about the plaintiff's product being marketed in Bangalore, learned Sr.Counsel argued that the relevant provisions of Section 20 of the CPC for the purpose of deciding the jurisdiction of the Court are section 20(a) and 20(c). Referring to section 20(c), it is contended that the cause of action for the plaintiff's suit in a passing off action like the present one will arise once it is shown that the defendant's drug is available in the market at Bangalore. In other words, it is availability of the defendant's drug in the market at Bangalore that will have to be taken into consideration and not whether the plaintiff's product is available in Bangalore or not. Referring to the various dates, learned Sr. Counsel submitted that plaintiff's publication for trademark was on 28th February 1997 whereas that of the defendant's application is dated 4.3.2007 and the plaintiff entered the market with its drug LOSAKAR on 17.6.1998 whereas defendant launched its product LOSAR later i.e., on 19.7.1998. Therefore, learned Sr. Counsel argued that what is relevant for the purpose of a passing off action is who entered the market first.
Therefore, learned Sr. Counsel argued that what is relevant for the purpose of a passing off action is who entered the market first. In other words, if the plaintiff is able to show that the plaintiff is the prior user, it is immaterial whether the plaintiff's goods are also available at Bangalore along with the goods of the defendant. Referring to the plaint averments that the plaintiff entered the market at first in Ahmedabad, learned Counsel Sr.Counsel argued that even though the plaintiff's product was not available at Bangalore, the very fact that plaintiff entered the market first in point of time with its product LOSAKAR itself is sufficient for the plaintiff to seek the relief from the trial Court against the defendant in respect of the defendant using the name LOSAR which trademark name sound similar to the plaintiff's product and as such, it is likely that plaintiff would suffer loss on account of deception on the part of the defendant. 12. As far as the element of goodwill or reputation is concerned, learned Sr.Counsel argued that all these are the matters of evidence which will have to be established at the trial and for the limited purpose of jurisdiction, all that the plaintiff will have to aver in the plaint is that the cause of action has arisen for the plaintiff following the defendant's product entering the market at Bangalore. Stating that plaintiff entered the market prior to the defendant, learned Counsel submitted that the fact that plaintiff entered the market at Ahmedabad itself is sufficient to establish the goodwill of the plaintiff's product and cause of action for the plaintiff to sue the defendant will arise wherever the defendant sells its product. The learned Sr. Counsel also pointed out that in so far as the factors to be considered in a passing off action are concerned, as far as English Law is concerned, reputation or goodwill has to be established whereas position in our country in the light of the various decisions referred to by him is that it is sufficient for the plaintiff to establish that plaintiff is the prior user and nothing more needs to be averred in the plaint. Referring to the submission made in para-11(iv) of the plaint, learned Sr.Counsel submitted that the cause of action arose at Bangalore where the defendant has been marketing its pharmaceutical products with the impugned trademark LOSAR.
Referring to the submission made in para-11(iv) of the plaint, learned Sr.Counsel submitted that the cause of action arose at Bangalore where the defendant has been marketing its pharmaceutical products with the impugned trademark LOSAR. The decisions upon which the learned Sr. Counsel for the respondent placed reliance are the ones reported in AIR 1965 Bom 35 , AIR 1978 Delhi 250, Arb. Law Report (Supplement) Vol. 24 625, (2004) 12 SCC 624 , (2005) 3 SCC 63 , (2001) DLT 508, 1996 PTC (16), AIR 2002 SC 275 , 1969 (2) SCC 727 , (2001) 2 SCC 294 , (2006) 6 SCC 207 , (2006) 9 SCC 41 , 2009 (39) PTC 358 (Del), AIR 2008 SC 685 , AIR (34) 1947 Lah. 289, 1995 PTC (15), & AIR 1981 P&H 117 . 13. In the light of the aforesaid contentions put forward by the learned Counsel for the parties and taking note of the various decisions cited by them and having regard to the emphasis put by the respective counsels in respect of the observations made by the Apex Court in the decisions upon which they have relied on, the only point that requires to be considered is whether the trial Court was justified in recording a finding that it has jurisdiction to entertain the suit of the plaintiff. 14. The answer to the above question revolves on answering the main contentions put forward by the learned Advocate General for the petitioner. 15. The first and the foremost contention put forward is that the plaintiff has not established either goodwill or reputation in respect of its product Losacar insofar as the place where defendant's product Losar is said to have entered the market. In other words, unless the plaintiff is able to establish reputation and goodwill in respect of its trade mark Losacar, the suit of the plaintiff will have to be dismissed. 16. The rival submission made by the learned senior counsel for the respondent is that, it is not necessary for the plaintiff to establish reputation or goodwill but, all that is required to show or aver in the plaint is that the plaintiff is the prior user of the drug Losacar in the sense that the plaintiff's produce entered the market at first, though at Ahmedabad.
In the face of the above contention put forward, it is necessary to know the position in law and this takes us to the decisions referred to by the learned counsel for the parties. Incidentally, some of the decisions were referred to by both the parties and, therefore, I will refer to such of the decisions, where this aspect has been considered, and the law that has been laid down by the Apex Court in particular. 17. In the case of Duncan Agro Industries Ltd. vs. Samabhai Tea Processors (P) Ltd, reported in Arbitration Law Reporter (Suppl.), page 625, on facts, it was found that the plaintiff had entered the market earlier than the defendant with its product tea under the trade mark "SARGAM" and the plaintiff had effected its first sale of tea under the trade mark "SARGAM" on June 28, 1991 and the defendant had its first dispatch of tea to its consignment agent on August 5, 1991 and the trial court, therefore, took the view that as the plaintiff had entered the market first, what is all important in an action for passing off is as to who entered the market first. This finding of the trial judge was ultimately called in question before the Apex Court and, dealing with the contentions raised in this regard, the law on the point was discussed elaborately and it is proper to refer to the various decisions in which this question was involved. The relevant paragraphs which are of much use to the present case are paragrpahs-24 to 30 and they read as under: "24. In Gaw Kan Lye v. Saw Kyone Saing (AIR 1939 Rangoon 343), the Full Bench of the Rangoon High Court was concerned with a passing off action. At the relevant time, in Burma, a suit lay for passing off, and not for infringement of trade mark as there was no statutory provision for the registration of trade marks. In that case, the Full Bench said: "If the mark of design be a distinctive one, the trader who adopts it is entitled to protection directly the article having assumed a vendible character is launched upon the market. As between two competitors who are each desirous of adopting a mark which is distinctive in character, it is entirely a question who gets there first".
As between two competitors who are each desirous of adopting a mark which is distinctive in character, it is entirely a question who gets there first". The Full Bench of the Rangoon High Court referred to the decision in (1931) 48 RPC 227 (at p. 253), where Lawrence, L.J. said: "The cases to which I have referred (and there are others to the like effect) show that it was firmly established at the time when the Act of the 1875 was passed that a trader acquired a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and of the extent of his trade and that such right of property would be protected by an injunction restraining any other person from using the mark." The Full Bench also referred to the opinion of Romer, L.J. at page 260 in the aforesaid judgment in (1931) 48 RPC 227, where Romer L.J. inter alia said: "If a trader uses a mark upon or in connection with his goods with the intention of indicating their origin, surely he is using it as a trade mark from the moment of the first user, which will probably be many months before the public has come to recognize the mark as indicating origin." Roser, L.J. further observed: "In my opinion a trader is at any rate using a mark as a trade mark when he first uses it upon or in connection with his goods with the intention of indicating origin, assuming of course that it is a mark capable of so doing in other words, intention without public recognition is enough". The Full Bench of the Rangoon High Court, on page 345, left hand column, of the report, observed: Now, if the mark of design be a distinctive one it seems clear upon authority that the trader who adopts it is entitled to protection directly the article having assumed a vendible character, is launched upon the market. As between two competitors who are each desirous of adopting a mark which is distinctive in character it is, to use familiar language, entirely a question of who get there first". The Full Bench of the Rangoon High Court referred to the opinion of Iqbal Ahmed, J. in 57 All.
As between two competitors who are each desirous of adopting a mark which is distinctive in character it is, to use familiar language, entirely a question of who get there first". The Full Bench of the Rangoon High Court referred to the opinion of Iqbal Ahmed, J. in 57 All. 510 (at p.548) to the following effect: "All that is necessary for the plaintiff to prove is that the mark used by the defendant is likely to deceive purchasers of the class bearing the plaintiff's marks, and it is not necessary to prove actual deception". 25. In T.G. Balaji Chettiar v. Hindustan Lever Ltd., Bombay (AIR 1967 Madras 148 the learned single Judge of the Madras High Court held: "The person who first designed or who used a trade mark first is the person entitled to claim the proprietorship thereof unless subsequently he has dealt with the same and some other has obtained rights thereto in the manner known to and recognized by law". 26. The Division Bench of the Delhi High Court in Century Traders v. Rosan Lal Duggar & Co. and others (AIR 1978 Delhi 250), held: "In an action for passing off in order to succeed in getting an interim injunction the plaintiff has to establish user of the mark prior in point of time than the impugned user by the defendants. The registration of the mark of similar mark prior in point of time to user by the plaintiff is irrelevant in an action for passing off and the mere presence of the mark in the register maintained by the trade mark registry does not prove the user by the persons in whose names the mark is registered and is irrelevant for the purposes of deciding the application for interim injunction unless evidence has been led or is available of user of their registered trade mark". 27. In Dr. Ganga Prashad Gupta & Sons v. S.C. Gulimani (AIR 1986 Delhi 329), it has been held: ."A trader acquires a right in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade, and this is independent of its registration which merely affords further protection under the statute. Priority in adoption and use of trade mark is superior to priority in registration". 28.
Priority in adoption and use of trade mark is superior to priority in registration". 28. In M/s Manoj Plastic India v. M/s. Bhola Plastic Industries (AIR 1984 Delhi 441), Sultan Singh, J. held: ."In an action for passing off the plaintiff has to establish user of the mark prior in point of time than the impugned user by the defendant. The registration of the mark prior in point of time to user by the plaintiff is irrelevant in an action for passing off. Proof of actual damage or fraud is also unnecessary in a passing off action. If there is a likelihood of the offending trade mark invading the proprietary right. A case for temporary injunction is made". 29. In Macwell Engineering Works Ahmedabad v. Divya Industries, Rajkot (Appeal from order No.84 of 1973) decided by M.P. Thakkar, J. (as His Lordship then was), on November 18, 1974, the facts inter alia were that the plaintiff had started manufacturing oil engines only a few months earlier than the defendant, and applications of both the plaintiff and the defendants for registration of their mark were pending. As the learned District Judge, in that case, inter alia found that the use of the trade mark by both the plaintiff and the defendant was almost around the same period, with a difference of some few months, he refused to grant interim relief to the plaintiff. However, M.P. Thakkar, J. In that judgment held: "Having come to the conclusion that the plaintiff had started the manufacture of oil engines under the trade name "Macwell" earlier then the defendant, in view of the aforesaid circumstance, the learned trial judge ought to have granted the interim injunction. It ought to have been realized that it was not merely a case of protecting the right of the plaintiff. The court was also concerned in protecting the consumers." The reference by the words "the aforesaid circumstance" was to the similarity of the two marks. 30. In Consolidated Foods Corporation v. Brandon and Co.
It ought to have been realized that it was not merely a case of protecting the right of the plaintiff. The court was also concerned in protecting the consumers." The reference by the words "the aforesaid circumstance" was to the similarity of the two marks. 30. In Consolidated Foods Corporation v. Brandon and Co. Private Ltd. (AIR 1966 Bombay 35), Shah, J., after considering a number of judgment on the point similar to the one with which I am concerned in this appeal, in paragraph 27 of the report said: "To summarise, therefore, a trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. As between two competitors who are each desirous of adopting such a mark. "It is, to use familiar language, entirely a question of who gets there first." The aforesaid observation made by Shah, J. by way of summary are, it appears, taken by him from the decision in the case reported at AIR 1939 Rangoon p. 343 (Full Bench) (supra). In other words, the observations made by the Full Bench of Rangoon High Court, after a reference to the opinions of Lawrence L.J. and Romer, L.J. in (1931) 48 RPC p. 227, have been approved by Shah, J. in the aforesaid judgment. Mr. Nanavati, L.A. for the Defendant, tried to distinguish this judgment of Shah, J. by submitting that as the opening words in paragraph 27 show, the Bombay High Court was, in that case, not concerned with a passing off action or an action for infringement of trade mark. In the submission of Mr. Nanavati, therefore, that decision can have no application to the facts of the case before me. I am afraid, the submission of Mr. Nanavati is not well founded.
In the submission of Mr. Nanavati, therefore, that decision can have no application to the facts of the case before me. I am afraid, the submission of Mr. Nanavati is not well founded. what is required to be noticed is the principle of law enunciated by the Full Bench of the Rangoon High Court in AIR 1939 (Rangoon) p. 343, which has been approved by Shah, J. in the aforesaid judgment." After referring to the aforesaid decisions, in the end, the court observed at paragraph-31 that the aforementioned judgments clearly showed that a trader, who first comes to the market with his produce under a particular trade mark or trade name as a distinctive mark, gets the proprietary right to use that mark to the exclusion of others irrespective of the length of user or extent of his business. 18. The next decision is that of the Bombay High Court in the case of Consolidated Foods Corporation vs. Brandon & Co. Private Ltd., reported in AIR 1965 Bombay 35. As regards the question concerning the point of time at which the rival traders enter the market, the court observed that the trader, who adopts such a mark is entitled to protection directly when the article having assumed a vendible character is launched upon the market. It was observed that the trade mark exists independently of registration which merely affords further protection under the statute. However, the common law rights are left wholly unaffected and priority in adoption and use of a trade mark is superior to priority in registration. Further, dealing with this aspect and whether in India, the Trade Marks Act of 1940 has made any change on the rights of the owner of a trade mark is concerned, the court observed at page-47 thus: ".... To Summarise, therefore, a trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. As between the two competitors who are each desirous of adopting such a mark, "it is, to use familiar language, entirely a question of who gets there first," (Gaw Kan Lye v. Saw Kyone Saing, AIR 1939 Rang 343 (FB).
As between the two competitors who are each desirous of adopting such a mark, "it is, to use familiar language, entirely a question of who gets there first," (Gaw Kan Lye v. Saw Kyone Saing, AIR 1939 Rang 343 (FB). Registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed at common law and at equity without registration. It does, however, facilitate a remedy which may be enforced and obtained throughout the State and it established the record of facts affecting the right to the mark. Registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the statute. Common law rights are left wholly unaffected. Priority in adoption and use of a trade mark is superior to priority in registration." Again at para-48, the observations made are worth reproduction here and they are as under: ".... As a matter of fact, a single actual use with intent to continue such use eo instanti confers a right to such mark as a trade mark. It is sufficient if the article with the mark upon it has actually become a vendible article in the market with intent on the part of the proprietor to continue its production and sales. It is not necessary that the goods should have acquired a reputation for quality under that mark. Actual use of the mark under such circumstances as showing an intention to adopt and use it as a trade mark is the test rather than the extent or duration of the use. ....." 19. Another decision of the Apex Court which will have to be referred in this context is in the case of Dhariwal Industries Ltd. vs. M.S.S. Food Products, reported in (2005) 3 S.C.C. 63 . That was a case where the controversy surrounded the use of the mark "Manikchand" by the defendant as against the use of the mark "Malikchand" by the plaintiff and the trial court has held that the plaintiff has prima facie established prior user of the mark "Malikchand" by itself and its predecessors and, as regards the other questions concerning assignments being genuine or not, the court held that, that was a question to be decided at the trial.
When the order of the trial court granting ad interim injunction was questioned by the defendant in the Apex Court, the Apex Court had this to say at paragraphs-7 and 10: "7. Section 27 of the Trade Marks Act, 1999 provides that nothing in that Act shall be deemed to effect the right of action against any person for passing off goods or services as the goods of another person or as services by another person or the remedies in respect thereof. Therefore, the fact that neither party has a registered trade mark as on the date of the suit cannot stand in the way of entertaining the claim of the plaintiff and granting the plaintiff an injunction in case the plaintiff is in a position to show prima facie that it was the prior user of its mark, that it had a prima facie case and that the balance of convenience was in favour of the grant of an interim injunction. It is provided in Section 39 of the Act that an unregistered trade mark may be assigned or transmitted with or without goodwill of the business concerned. It is, therefore, possible for a plaintiff or a defendant to show that an unregistered trade mark that was being used by another person earlier had been assigned to it and that it can tack on the prior user of its predecessor. xxx xxx xxx 10. .... The said approach adopted by the trial court and the first appellate court, in the circumstances, cannot be said to be perverse or so unreasonable as to warrant correction by this court, considering that this court is sitting in appeal by special leave, at an interlocutory stage. Suffice it to say, prima facie on the materials produced, it could not be said that the trial court and the High Court committed such an error in prima facie accepting the case of prior user of the mark "Manikchand" set up in the plaint so as to warrant interference by this court". 20.
Suffice it to say, prima facie on the materials produced, it could not be said that the trial court and the High Court committed such an error in prima facie accepting the case of prior user of the mark "Manikchand" set up in the plaint so as to warrant interference by this court". 20. The question concerning who gets the right of passing off action was also considered by the Apex Court in the case of Satyam Infoway Ltd. vs. Sifynet Solutions (P) Ltd., reported in (2004) 6 S.C.C. 145 , and the court, after dealing with elements or ingredients to be established by a plaintiff in a passing off action, held that it is not necessary to show long user to establish reputation, but that would depend upon the volume of the sales and the extent of advertisement and if two trade rivals claim to have individually invented the same mark, then the trader who is able to establish prior user will succeed. In other words, who gets it first is the question and it is not essential for the plaintiff to prove long user to establish reputation in a passing off action. The relevant paragraphs, which were referred to by the learned counsel for the parties, are required to be reproduced and they are as under: "13. The next question is, would the principles of trade mark law and in particular those relating to passing off apply? 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 plaintiff's. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public. The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant's goods or services are the plaintiff's. The action is normally available to the owner of a distinctive trade mark and the person who, if the word or name is an invented one, invents and uses it. If two trade rivals claim to have individually invented the same mark, then the trader who is able to establish prior user will succeed. The question is, as has been aptly put, who gets these first?
If two trade rivals claim to have individually invented the same mark, then the trader who is able to establish prior user will succeed. The question is, as has been aptly put, who gets these first? It is not essential for the plaintiff to prove long user to establish reputation in a passing off action. It would depend upon the volume of sales and extent of advertisement. 14. The second element that must be established by a plaintiff in a passing-off action is misrepresentation by the defendant to the public. The word misrepresentation does not mean that the plaintiff has to prove any malafide 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 defendant's while to cash in on it. An innocent misrepresentation would be relevant only on the question of the ultimate relief which would be granted to the plaintiff. 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. In assessing the likelihood of such confusion the courts must allow for the "imperfect recollection of a person of ordinary memory". 21. Thus, the law laid down by the Apex Court in the aforementioned cases lead to the inevitable conclusion viz., the person who shows that he is the prior user has to succeed and the extent of advertisement or volume of sales are not very relevant. 22. In the instant case, the plaintiff has averred that the defendant has his product let into the market at Bangalore and also relied on the advertisement taken out by the defendant company, a copy of which is produced as document No.9 to the plaint. The relevant paragraph of the advertisement will have to be referred to at this juncture in the light of the contentions issues raised by the learned counsel for the petitioner.
The relevant paragraph of the advertisement will have to be referred to at this juncture in the light of the contentions issues raised by the learned counsel for the petitioner. The advertisement taken out in a Bombay newspaper reads thus: "Unichem introduces two novel drugs for BP and depression UNICHEM Laboratories is to introduce two new class of drugs for the first time in the country." Though the learned counsel Shri K.B.S. Manian for the petitioner argued that the above caption and the statement indicates that the defendant has come out with two new products and the statement only makes a mention of the two drugs being introduced for the first time in the country, the question that was posed by the learned counsel for the petitioner is as to how the above statement could have the impact of confusing the general public at Bangalore when the plaintiff's product did not make any entry into the market at Bangalore. 23. As far as this contention is concerned, it is also very pertinent to refer to another decision of the Apex Court in the case of Milmet Oftho Industries vs. Allergan Inc. reported in (2004) 12 S.C.C. 624 . How the advertisement taken out at one corner of a country or world can have its impact on the rest of the world has been referred to in this decision and the relevant observations are at paragraph-8 and they are: "8. .... The court has to keep in mind the possibility that with the passage of time, some conflict may occur between the use of the mark by the applicant in India and the user by the overseas company. The court must ensure that public interest is in no way imperilled. Doctors, particularly, eminent doctors, medical practitioners and persons or companies connected with the medical field keep abreast of latest developments in medicine and preparations worldwide. Medical literature is freely available in this country. Doctors, medical practitioners and persons connected with the medical field regularly attend medical conferences, symposiums, lecturers, etc. It must also be remembered that nowadays goods are widely advertised in newspapers, periodicals, magazines and other media which is available in the country. This results in a product acquiring a worldwide reputation.
Medical literature is freely available in this country. Doctors, medical practitioners and persons connected with the medical field regularly attend medical conferences, symposiums, lecturers, etc. It must also be remembered that nowadays goods are widely advertised in newspapers, periodicals, magazines and other media which is available in the country. This results in a product acquiring a worldwide reputation. Thus, if a mark in respect of a drug is associated with the respondents worldwide it would lead to an anomalous situation if an identical mark in respect of a similar drug is allowed to be sold in India. ... ... ... Thus, the ultimate test should be, who is first in the market". In the very same decision, dealing with the question put to the court as regards the proof as to who entered the market first, the Apex Court observed that these are matters which would require examination on evidence. 24. In the light of the aforesaid observations of the Apex Court, it cannot be said that an advertisement taken out in the newspapers in Bombay, cannot have any effect on the general public and others concerned in the field, who are at Bangalore. In theses days of internet applications, it is no surprise that information and advertisements reach the nooks and corners of the world within no time. It is also to be mentioned at this juncture that, even in the plaint, there is an averment at paragraph-2 that the plaintiff's product enjoys the goodwill among the doctors, chemists and consuming public. 25. One other aspect to which I will have to refer at this juncture is as regards the proof of actual damage. One decision to which reference will have to be made is in the case of Century Traders vs. Roshan Lal Duggar & Co., reported in AIR 1978 Delhi 250. In the said case, it was held that "proof of actual damage or fraud is unnecessary in a passing off action whether the relief asked for is injunction alone or injunction, accounts and damages. If there is a likelihood of the offending trade mark invading the proprietary right, a case for injunction is made out". 26.
In the said case, it was held that "proof of actual damage or fraud is unnecessary in a passing off action whether the relief asked for is injunction alone or injunction, accounts and damages. If there is a likelihood of the offending trade mark invading the proprietary right, a case for injunction is made out". 26. Coming to the next important contention put forward by the learned Advocate General for the petitioner viz., the cause of action for the suit, is concerned, it is strongly contended and emphasized by referring to various decisions that the cause of action for the plaintiff's suit does not exist in the present case because, the plaintiff's goods rather drug, had never made its impact in Bangalore and that the plaintiff's drug had not even entered the market in Bangalore and, therefore, merely because the defendant's drug is in Bangalore or intends to enter the market in Bangalore, that cannot give raise to the cause of action for the plaintiff's suit. 27. As far as the cause of action is concerned, two decisions of the Apex Court will have to be kept in view for a clear understanding of the concept of cause of action. In the case of Laxman Prasad vs. Prodigy Electronics Ltd., reported in AIR 2008 SC 685 , dealing with the concept of cause of action, of Apex Court made the following observations at paragraphs-15 to 21: "15. ... .... In our view, 'cause of action' and 'applicability of law' are two distinct, different and independent things and one cannot be confused with the other. The expression 'cause of action' has not been defined in the Code. It is however settled law that every suit presupposes the existence of a cause of action. If there is no cause of action, the plaint has to be rejected (Rule 11(a) of Order VII). Stated simply, 'cause of action' means a right to sue. It consists of material facts which are imperative for the plaintiff to allege and prove to succeed in the suit. The classic definition of the expression ('cause of action') is found in the observations of Lord Brett in Cooke v. Gill (1873) 8 CP 107: 42 LJ CP 98. 16.
Stated simply, 'cause of action' means a right to sue. It consists of material facts which are imperative for the plaintiff to allege and prove to succeed in the suit. The classic definition of the expression ('cause of action') is found in the observations of Lord Brett in Cooke v. Gill (1873) 8 CP 107: 42 LJ CP 98. 16. His Lordship stated: "Cause of action means every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court." 17. In A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies (1989) 2 SCC 163 , this court said: "A cause of action means every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff". 18. Now, Sections 16 to 20 of the Code deal with territorial jurisdiction of a court (place of suing). Whereas Sections 16 to 18 relate to immovable property, suits for compensation for wrongs to persons or movables have been dealt with under Section 19. Section 20 of the Code is a residuary provision and covers all cases not falling under Sections 16 to 19. 19. The relevant part of Section 20 reads thus: 20. Other suits to be instituted where defendants reside or cause of action arises.
Section 20 of the Code is a residuary provision and covers all cases not falling under Sections 16 to 19. 19. The relevant part of Section 20 reads thus: 20. Other suits to be instituted where defendants reside or cause of action arises. – Subject to the limitations aforesaid, every suit shall be instituted in a court within the local limits of whose jurisdiction – .(a) the defendant or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or .(b) any of the defendants, where there are more than one, at the time of commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the court is given or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or .(c) the cause of action, wholly or in part arises, ...... (emphasis supplied) 20. Bare reading of Clause (c) leaves no room for doubt that a suit would lie in a court within the local limits of whose jurisdiction the cause of action has arisen, wholly or partly. 21. Section 20 has been designed to secure that justice might be brought as near as possible to every man's hearthstone and that the defendant should not be put to the trouble and expense of travelling long distances in order to defend himself". 28. The other decision is in the case of Rajasthan High Court Advocates' Association Vs. Union of India, reported in (2001) 2 S.C.C. 294 , and the relevant observation for our purpose is at paragraph-17 and it is as under: 28. The other decision is in the case of Rajasthan High Court Advocates' Association Vs. Union of India, reported in (2001) 2 S.C.C. 294 , and the relevant observation for our purpose is at paragraph-17 and it is as under: "17. The expression "cause of action" has acquired a judicially-settled meaning. In the restricted sense, cause of action means the circumstances forming the infraction of the right or the immediate occasion for the action.
Union of India, reported in (2001) 2 S.C.C. 294 , and the relevant observation for our purpose is at paragraph-17 and it is as under: "17. The expression "cause of action" has acquired a judicially-settled meaning. In the restricted sense, cause of action means the circumstances forming the infraction of the right or the immediate occasion for the action. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but the infraction coupled with the right itself. Compendiously the expression means every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Every fact which is necessary to be proved, as distinguished from every piece of evidence which is necessary to prove each fact, comprises in "cause of action". It has to be left to be determined in each individual case as to where the cause of action arises. ... ...." 29. In the light of the aforesaid exposition of law on the concept of cause of action, we will have to examine the case before us. As could be made out from the pleadings of the parties and the arguments advanced by the learned counsel for the parties before this court, it is not in dispute that the defendant's product had entered the market at Bangalore and the plaintiff's product has not entered the market. In other words, it is the defendant's drug Losar alone that is holding the field at Bangalore. Whether it can be said that the plaintiff's goods also will have to be in the market at Bangalore in order to sue the defendant for a passing off action. The learned counsel for the petitioner argued that what is relevant is the activity of the plaintiff and not the defendant's activity. The action cannot precede the cause. To put it in a more popular sense, the cart cannot go before the horse. The point that the petitioner's counsel wants to drive home is that, unless the plaintiff's goods are also available in the market at Bangalore, merely because the defendant's product has entered market, that itself will not give the right to the plaintiff to sue for passing of action. I am unable to subscribe myself to the said view of the learned counsel for the petitioner. 30.
I am unable to subscribe myself to the said view of the learned counsel for the petitioner. 30. As far as the cause of action is concerned, having regard to the provisions contained in Section 20, sub-clauses (a) and (c) of the C.P.C. and the aforementioned law laid down by the Apex Court in Laxman Prasad's case as well as the Rajasthan High Court Advocates' Association's case, if there are circumstances forming infraction of the right of the plaintiff, the cause of action arises. It is not the activity of the plaintiff that will have to be taken into consideration but, whether the defendant's activity in launching its product in Bangalore that the trade mark Losar has in any way affected or caused infraction of the right of the plaintiff is the more important question, which will have to be addressed having regard to the plaint averments. 31. In the case of Pfizer Enterprises Sarl Vs. Cipla Ltd & P.M. Diesels Ltd. Vs. Patel Field Marshal Industries, reported in 2009 (39) PTC 358 (Del), the Delhi High Court, after referring to the averments made in the plaint and the written statement of the parties, ultimately dealing with the question concerning territorial jurisdiction, held thus: "12. ... ... .... However, if the territorial jurisdiction is invoked by the plaintiff on the ground of the cause of action having arisen in the form of sale of offending goods within the territories of that court, the question of defendant's activity would become relevant and the plaintiff's activity would become irrelevant. If the plaint discloses that the defendant has violated the plaintiff's trademark or copyright in a particular place, the cause of action would arise therein and the observations in Laxman Prasad would clothe that court with jurisdiction." 32. In the instant case, it is not in dispute that the plaintiff entered the market first and secondly, the plaintiff's product also made its entry at Ahmedabad, which is sought to be established by the plaintiff by relying on various invoices which have been annexed as documents to the plaint. The plaintiff is, therefore, the trader who came first to the market and can be labeled as the prior user. The extent of advertisements and volume of sales are not the relevant factors but, who entered first into the market will decide as to whether the plaintiff can maintain a suit for passing off action.
The plaintiff is, therefore, the trader who came first to the market and can be labeled as the prior user. The extent of advertisements and volume of sales are not the relevant factors but, who entered first into the market will decide as to whether the plaintiff can maintain a suit for passing off action. As far as the plaintiff's goods being marketed in Bangalore is concerned, the decision referred to by me dealing with the cause of action and the party whose activity is relevant, will make it clear that even if the plaintiff's products are not marketed in Bangalore, once it is averred in the plaint that the defendant's product had entered the market at Bangalore within the jurisdiction of the trial court, the cause of action for the suit can be said to have arisen and, as such, having regard to the provision contained in Section 20(c) of the C.P.C., the plaintiff is certainly entitled to file a suit where cause of action in whole or part arises. 33. To sum up, the law laid down by the Apex Court in the aforementioned cases leaves no doubt as to who will succeed insofar as the territorial jurisdiction of the court to entertain the suit is concerned and, in the instant case, it is the plaintiff who has averred in the plaint that it had entered the market first, which fact is not denied by the defendant and the further fact that the defendant's goods are marketed in Bangalore under the trade mark Losar has, therefore, gives the plaintiff the right to sue the defendant at Bangalore since the defendant's goods are marketed in Bangalore. As such, the trial court was not in error in recording a finding in favour of the plaintiff as regards the jurisdiction to maintain the suit is concerned. The learned judge of the trial court placed reliance on the decision in the case of Calvin Klein Inc. Vs.
As such, the trial court was not in error in recording a finding in favour of the plaintiff as regards the jurisdiction to maintain the suit is concerned. The learned judge of the trial court placed reliance on the decision in the case of Calvin Klein Inc. Vs. International Apparel Syndicate, although the said decision was sought to be distinguished by the learned counsel appearing for the petitioner before this court on the ground of the plaintiff's product not having trans-world reputation or goodwill but we have seen from the above decisions of the Apex Court that in a suit for passing off, what is relevant is not the reputation or goodwill which may be factors to be considered in the course of the trial and the success or otherwise of the plaintiff's suit would depend upon those factors. But, they are all in the realm of evidence. 34. As far as the jurisdiction aspect is concerned, if the plaintiff is able to aver in the plaint that he came into market first and, if the defendant's goods are being marketed in Bangalore, these two averments in the plaint are sufficient to give rise to the cause of action to institute a suit at Bangalore. Therefore, in the light of the foregoing analysis of the law in particular and the averments in the pleadings which alone will have to be taken into consideration at this juncture and not what is contained or pleaded in the written statement, I am of the view that the impugned order of the trial court cannot be said to be erroneous on any count. 35. In the result, the petition is liable to be dismissed and it is dismissed. All the observations made in the course of this order are confined to the contentions put forward surrounding the issue relating to jurisdiction aspect only and they shall have no effect on the merits of the case as far as the plaintiff succeeding in the suit is concerned. The trial court also shall not get influenced by any of the observations made herein above, but shall proceed to consider the case of the parties on merits.