Century Traders v. Roshan Lal Duggar Co.

Century Traders v. Roshan Lal Duggar Co.

AIR 1978 Delhi 250

Brief Facts:

Appellant manufactured voiles which were processed by Respondent No.3 (out of 3 Respondents) from the year 1973 until the end of the year 1975. It was claimed that the Appellant had directed Respondent No.3 to put the trade mark in question, “RAJA RANI” on the voiles after they were processed and this direction was complied with by Respondent No.3.

From 1976, the goods manufactured by the Appellant were being processed by another party. This party was also given the same direction as Respondent No.3 of placing the mark “RAJA RANI” on the voiles.

In the middle of 1976, the Appellant discovered that Respondents 1 & 2 were using the same mark for their voiles which were processed by Respondent No.3.

The Appellant filed a suit in the Delhi High Court. Learned Single Judge of the Hon’ble Delhi High Court, was of the view that neither of the Respondents or the Appellant could claim proprietary interest in the mark in question on account of the prima facie evidence of earlier registrations of the mark “RAJA RANI”. Against the said order, Appellant filed an appeal.

Appellant’s Claim:

• Appellant claimed proprietary interest in the mark, ‘RAJA RANI” by virtue of prior user.

• Appellant also claimed that the Respondents were guilty of passing of their goods bearing the Appellant’s trade mark.

Respondents’ Contentions:

• The said mark was developed by and belongs to Respondent No.3 who was previously affixing the same on the voiles processed by it for the Appellant but now is affixed by it on the voiles processed by it for Respondents 1 & 2.

• Mark was common to the trade and there have been registrations of the mark prior to 1973.

• Appellant had failed to show exclusive user and so no prima facie case had been made out by it for issue of an interim injunction.

• A passing off action is an action in deceit and the appellant had to prove that either there was actual passing off or use of the mark by the Respondents that had actually caused confusion or damage to the Appellant.

• Respondents relied on Prina Chemical Works and others v. Sukndayal and others, I.L.R. 1974 (1) Delhi 545(7) case to contend that a pirated mark cannot be protected. The Appellant and also Respondent No.3 having pirated the mark “RAJA RANI” from the proprietors of the same registered trade mark, namely M/s Karam Shetty Venkaratnam of Chirala, Andhra Pradesh and Raj Mal Pahar Chand of Amritsar, the Appellant cannot claim protection of this Court.

Court’s Observations:

To determine if ad interim injunction is to be granted, it is settled law that three factors have to be kept of in view: (i) establishment of a prima facie case (ii) the balance of convenience between the parties (iii) if the interim injunction is not issued, will it cause irreparable injury to the applicant.

Prima facie case in favour of the Appellant stands established by admitted user of the mark by the Appellant on the voiles produced and marketed by it. But this prima facie case made out the Appellant is watered down by the fact that the mark is alleged to be common to the trade and that various registrations were adverted to it.

The suit is based on claim of passing off and is not a suit of infringement of a registered trade mark. In a passing off action registration of the trade mark is immaterial. If Section 27 (1) & (2) and relevant parts of Section 106 of the Trade and Merchandise Marks Act, 1958 are read, it is clear that registration of mark in the trade mark registry would be irrelevant in an action for passing off. 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 trade mark is superior to priority in registration.

Mere presence of the mark in the register maintained by the trade mark registry does not prove its user by the persons in whose names the mark was registered and was irrelevant for the purposes of deciding the application for interim injunction unless evidence had been led or was available of user of the registered trade marks.

The Hon’ble Court relied on the judgements in T. Oertli AG’s case and refused to accept the contention that there is any rule of law laid down by any court that exclusive user must be shown before a case can be said to have made out for issue of an of an interim injunction.

It was also believed by the Hon’ble Court that proof for actual damage or fraud is unnecessary in a passing off action. If there is a likelihood of the offending trade mark invading the proprietary right, a case for injunction is made out.

The Hon’ble Court also observed the fact that the registered trade marks of Andhra Pradesh and Amritsar are not the trade marks which are pleaded by the Appellant. The Appellant is admittedly a prior user of this mark vis-à-vis the Respondents. The said mark had some novelty and attractiveness which was evident from the fact that the Appellant and the Respondents had applied for registration of that mark.

The Hon’ble Court then looked into the question of balance of convenience and drew a distinction between the mark being “common on register” and “common to the trade”. There was no evidence on record to show that there is actual user of this mark by any party other than the parties to the suit.

In as much as trade mark is a property right, an invasion of it should be protected and the balance of convenience would be in favour of the Appellant who was admittedly the first user of this mark and established a prima facie right to the property.

The last question to be tackled by the Hon’ble Court was the question of irreparable injury. The Hon’ble Court said that the irreparable injury would be the likely confusion that may be caused if the Respondents would be allowed to use the mark which was held prima facie as being the mark of the Appellant.

According to the Hon’ble Court if the Respondents were not restrained by means of an interim injunction they would continue to market their goods with the offending mark. If the Respondents continued to market their goods with the offending mark, they ultimately might be held long user and the ultimate relief of permanent injunction may be refused on the plea of common or concurrent user.

No plea of common or concurrent user had been raised by the Respondents then, but the Hon’ble Court believed that if they were allowed to use the trade mark for the duration of the pendency of the suit, the likelihood of confusion being caused and likelihood of plea of common or concurrent user being raised by the Respondents would count as irreparable injury to the Appellant.

The Hon’ble Court accepted the appeal of the Appellant and issued an interim injunction against the Respondents restraining them from using the trade mark, “RAJA RANI” on any voiles manufacturer or processed by them. The injunction was restricted to the voiles only as claimed the Appellant.

Author: Aishwarya Pundir, ILS Law College, Pune