Crompton Greaves Limited vs Salzer Electronics Limited and Europa Component and Equipment PLC

V. Ramasubramanian, J.—Pending suit for infringement, passing off and for appropriate reliefs of injunction, rendition of accounts and

damages in respect of the trade secrets of the Plaintiff, the Plaintiff came up with 6 applications, the details of which are as follows:

(i) O.A. No. 925 of 2010 for an interim order of injunction restraining the Respondents from committing infringement of the registered trademarks

of the Plaintiff.

(ii) O.A. No. 926 of 2010 for an interim order of injunction restraining the Respondents from passing off their electrical products as that of the

Plaintiff''s.

(iii) O.A. No. 927 of 2010 for an interim order of injunction restraining the Respondents from in any manner using the Plaintiff''s trade secrets,

confidential information, consumer data, international standard certifications, product code, catalogue numbers and other information.

(iv) A. No. 4676 of 2010 under class 14 of the Letters Patent, to combine different causes of action, such as infringement, passing off etc.

(v) A. No. 4677 of 2010 seeking the appointment of an Advocate Commissioner and take into possession, all infringing materials and accounts

and invoices and

(vi) A. No. 4678 of 2010 for a pro-order against the Collector and Commissioner of Customs, prohibiting them from exporting the consignment of

infringing materials.

On 25.8.2010, all the above applications were moved for ad interim ex parte orders and S. Rajeswaran, J., granted an interim order of

injunction only in O.A. No. 926 of 2010 and also appointed an Advocate Commissioner in A. No. 4677 of 2010. In O.A. Nos. 925 of 2010,

927 of 2010, A. Nos. 4676 of 2010 and 4678 of 2010, the learned Judge ordered notice returnable by 4 weeks. In other words, an injunction

was granted only in respect of passing off, though the prayer for passing off was of greater detail and too elastic in nature.

After service of notice, the first Defendant came up with an application in A. No. 5573 of 2010, seeking to vacate the interim order of

injunction. When it came up for hearing on 8.10.2010 before A. Arumughaswamy, J., an undertaking was given by the first Respondent to the

effect that they will not use the logos UL and CSA and the file numbers E178264 and 107484-0-000 while exporting their products. After

recording the said undertaking, the learned Judge clarified that the first Respondent is permitted to export his products without using the logos UL

and CSA and file Nos. E178264 and 107484-0-000. But the modification was confined only to the first Respondent.

Again O.A. No. 926 of 2010 and A. No. 5573 of 2010 came up for hearing on 21.10.2010. At that time, it was pointed out that the

undertaking given on 8.10.2010 was only in respect of the file and folio numbers and that the use of the CSA and UL logo are necessary for every

export. Therefore, the order dated 8.10.2010 was modified to the following effect:

1) The first Respondent may export the products manufactured by them without mentioning the CG logo of the Plaintiff.

2) The CE marking, CSA and UL logos and the product codes may be used by the first Respondent without mentioning the numbers E178264

and 107484-0-000 of the Plaintiff.

3) Consequently the second Respondent shall receive the products exported/to be exported by first Respondent.

Again O.A. No. 926 of 2010 and A. No. 5573 of 2010, came up for hearing on 10.11.2010. It was reported at that time, that the Advocate

Commissioner could not complete the inspection due to various reasons. Therefore, this Court directed the Commissioner to complete the

inspection and file a report within a week and also extended the interim order.

Thereafter, all the applications were taken up for hearing and the Advocate Commissioner also filed his report. It was taken on record and I

heard Mr. P.S. Raman, learned Senior Counsel for the Plaintiff, Mr. M.S. Krishnan, learned Senior Counsel for the first Defendant and Mr. Satish

Parasaran, learned Counsel for the second Defendant.

The case of the Plaintiff in brief, is as follows:

(i) The Plaintiff is the market leader in the electrical engineering sector and also exports its products to more than 60 countries worldwide. It is

using and is the exclusive proprietor of the corporate name CROMPTON GREAVES and a distinctive CG logo since the year 1966. By virtue of

such long, continuous and extensive use, the trademark and the logo have been distinctive of and are exclusively identified with the Plaintiff. The

Plaintiff''s business extended beyond boundaries and has been identified as a global business company in the light of which they unveiled a new

brand identity by adopting a new CG logo since 15th October, 2009. The new logo is artistically created and thereby enjoys copyright protection.

(ii) The Plaintiff has obtained necessary standards approvals from various international recognized bodies. It has obtained the CE (Conformity

Europeene) mark certifying that its product has met EU consumer safety, health and environmental requirements owing to which its products can

be placed on the EU market, the Canadian Standards Association (CSA) certification for its products regarding their suitability which is essential

for the sale of the product in USA and Canada; and the UL certification (issued by the Underwriters Laboratories Inc.) to certify precision and

safety of the product which is essential to market the product in USA. The Plaintiff had paid huge testing fees and got facilities across the country

to have the products manufactured by the first Defendant inspected and verified for UL/CSA standards. These agencies have been visiting the first

Defendant''s factory under intimation to the Plaintiff. These international standard registrations are obtained by the Plaintiff and are the property

marks of the Plaintiff within the meaning of Section 479 of the Indian Penal Code and any misuse of these property marks constitutes an offence

under Sections 481 and 482. The goods bearing the UL, CE and CSA markings, catalogue numbers and the CG logo denote that the products

emanate from and are exported by the Plaintiff and therefore their product liability rests only on the Plaintiff, making them solely liable for any

breach of quality standards. They are in the exclusive domain and are confidential information of the Plaintiff provided to the first Defendant for use

exclusively on the goods manufactured for and on behalf of the Plaintiff, to supply exclusively to the Plaintiff.

(iii) The first Defendant has been acting a s a third party vendor since the year 2000 and has been manufacturing goods ordered for by the Plaintiff,

with the Plaintiff''s trademarks CG, Crompton Greaves, the new unique CG monogram, CE, UL and CSA certifications, product coding and

catalogue numbers and supply them exclusively to the Plaintiff for exports. The role of the first Defendant is that of a third party manufacturer, a job

worker, to manufacture the goods strictly in accordance with the specifications and orders placed by the Plaintiff from time to time. The first

Defendant was never requested to export directly to any customers with the Plaintiff''s trademarks, logos, certifications, product coding and

catalogue numbers and they were well aware that they had no such right. The second Defendant who had inspected the premises of Defendant

No. 1, where the manufacturing activities are carried out, was also aware of the same.

(iv) The Plaintiff recently came to know that the first Defendant has been surreptitiously involved in the manufacture of certain electrical equipments

bearing the Plaintiff''s trademarks, logos, certifications, product coding and catalogue numbers and such goods were exported directly to the

Plaintiff''s customers outside India, especially to the second Defendant, without the express authority, permission or consent of the Plaintiff. The

goods were not ordered by the Plaintiff and yet the first Defendant produced them illegally and the second Defendant illegally imported them into

U.K. These acts amount to not only breach of trust, but also fraud and cheating and inducing the Plaintiff''s customers to buy goods in the Plaintiff''s

name, without any involvement or knowledge of the Plaintiff. The first Defendant has taken undue advantage of the trade secrets provided by the

Plaintiff, in the process exposing the Plaintiff to product liability, the possibility of their international certification being cancelled and disrepute.

(v) The second Defendant has been regularly placing orders with the Plaintiff for a huge quantity in every order. From the year 2009, the export

orders placed by the second Defendant were reduced drastically. When the Plaintiff became suspicious of the illegal activities of the Defendants, in

July 2010, the second Defendant placed an order for 2000 isolator switches, as a farce to divert the attention of the Plaintiff. The Defendants

therefore are acting in collusion.

(vi) The Defendants have surreptitiously packaged the goods affixing a sticker which can be seen when one opens the outer carton, unscrews the

top and examines the inner switch, containing the Plaintiff''s trademarks, logos, certifications, product coding and catalogue numbers, creating an

impression that the product is emanating from the Plaintiff. In the outer carton, the Defendants are using the mark MCG which is deceptively similar

to and/or a colorable imitation of the Plaintiff''s mark CG. The mark MCG has been used to dispel any doubt or suspicion by the Customs''

Authorities and have thus additionally committed a willful and dishonest act of fraud and misrepresentation. They have applied a false trade

description and exported the goods using the Plaintiff''s trademarks without due authorisation, both of which are offences under the Trade Marks

Act, 1999; the latter amounting to infringement of trademark u/s 29. The Defendants are making a gross misrepresentation to the trade and public

in an attempt to capitalise unfairly, at the cost of the Plaintiff''s reputation and goodwill, in order to pass of their goods as that of the Plaintiff''s

goods, thereby adversely affecting the sale and business of the Plaintiff.

In the counter affidavit filed by the first Respondent, it is contended as follows:

(i) The first Respondent has been carrying on business for the past 25 years in the field of power and electrical products. Laursen and Turbo

(L&T) have invested a substantial amount in the capital of the first Respondent company, who manufactures various electrical equipments for L&T

which is marketed by L&T under its own brand name. Apart from that, the first Respondent company also markets its products under its own

brand and trade mark ""Salzer"" in India and abroad, enjoying a substantial market share.

(ii) The applicant approached the first Respondent in the year 2000 and placed orders for supply of load break switches, for the applicant to

market the said products in U.S., and U.K., and requested that the said products should be in conformity with CE marking. The CE marking is

merely a self-declaration certified by the manufacturer that their products are in conformity with the EU standards. It is neither a trademark nor a

certificate issued by any statutory authority. Any manufacturer who intends to market their product in the European Economic Community (EEC)

has to declare in the product by affixing CE marking that the product is in conformity with the standard specifications of the EU. The applicant has

not obtained the CE mark, as it can be affixed by the manufacturers alone. The registration certificate does not bear the catalogue numbers of the

applicant for each product.

(iii) The applicant also insisted that the first Respondent should obtain CSA and UL certifications. To obtain both these certificates, the product has

to be inspected by the Canadian Standards Association and The Underwriters Laboratories Inc., respectively and this certificate can be issued to

any manufacturer or person who is going to market the product in Canada or USA. The obtainment of the certificate does not give him any right of

ownership in the product. The purchase of the product from the first Respondent by the applicant and affixing the certifications of CSA and UL

cannot be termed as intellectual property or any right of the applicant on the said product or the standards. The applicant can only claim the right of

use of file numbers (E178264 and 107484-0-000) provided by the private bodies along with the UL and CSA marks and not the UL and CSA

logos itself. The applicant did not pay huge testing fees to have the products manufactured by the first Respondent inspected and verified for UL

and CSA standards, nor did these agencies visit the first Respondent factories.

(iv) The first Respondent is the owner of the product manufactured by it and the same was sold to the applicant like any other buyer of the first

Respondent. There is no exclusive contract between the applicant and the first Respondent to supply the products manufactured by it only to the

applicant. It was not a third party vendor. The first Respondent can sell its products anywhere in the world and has been doing so under the name

Salzer"" for the last 15 years. The first Respondent is not selling any of its products with UL and CSA marking.

(v) The trademark MCG is owned by a highly reputed company in Europe called Motor Control and Industrial Switch Gear owned by a group

called City Electrical Factors Limited (CEF), which is also one of the customers of the second Respondent company, through whom the said

company purchases switch gears from the first Respondent and marketed in England. The applicant did not implead the owner of the trademark

MCG, City Electrical Ltd. The suit is bad for non-joinder of necessary parties and the same is liable to be dismissed.

(vi) The catalogue numbers and the product code therein are prepared by the first Respondent and are properties of the first Respondent as the

entire cost was borne by it. Though the bills for the said catalogue were raised in the name of the applicant, the applicant after making payment

debited the said payment in the account of the first Respondent. The applicant did not provide the certificate numbers, file numbers and the CG

logo. The applicant also did not provide the database of its customers. The first Respondent has only used the trademarks of the applicant and the

CG logo label for only those orders placed by CG. The first Respondent need not market/sell its products under some other trademarks when by

itself it has a reputed trade mark as a quality producer.

(vii) The contentions that the second Respondent was aware that the goods were manufactured by the first Respondent on orders placed by the

applicant with the applicant''s trademarks, certifications, logos, catalogue numbers and product coding are false. The second Respondent can

sell/market the product manufactured by the first Respondent in EU, independently, on getting the said certifications.

In the counter affidavit filed by the second Respondent, it is contended as follows:

(i) The second Respondent is the largest independent supplier of fuse in U.K., and has over thirty years of expertise in supplying broad range of

electrical components to distribution. In addition to their own Europa brand, they are also distributors of leading manufacturers including GE,

Control and Switch Gear Contracts, ETI, Crompton Greaves, etc. CEF has been one of its bulk purchasers.

(ii) The second Respondent has been a customer not only to the applicant but also to the first Respondent. Any suggestion to the effect that the

second Respondent has been weaned away from the first Respondent is false and incorrect. The second Respondent placed several purchase

orders with the applicant between the years 2007 and 2009 and has also been placing orders for switches from the first Respondent due to the

fact that the service provided by the applicant were poor i.e., on many occasions it took several months for the applicant to deliver the orders

placed by the Respondent, the first Respondent''s service was much faster and reliable. In any event, the choice of their supplier is a commercial

decision which the second Respondent is fully entitled to take.

(iii) While the goods procured from the applicant would contain the CG label on inner switches, the goods brought from the first Respondent

contained the first Respondent''s trademarks along with CE, product coding and catalogue numbers. The CG logo along with the CE, UL and

CSA markings can be seen only when one opens the outer carton, unscrews the top and examines the inner switch. So it was not used as trade

mark to market the switches in the European, American or Canadian markets. The electrical equipment procured by them from the first

Respondent did not bear the applicant''s trademarks, certifications or file numbers.

(iv) On the strength of the ex parte orders obtained from this Court, the applicant circulated official information to their business partners including

the second Respondent, forewarning them about the ill intention of the first Respondent, their counterfeit activities and infringement of IP Rs and

other confidential information. This defamatory communication has caused irreparable damage to the first Respondent''s reputation and standing in

the European market. The second Respondent, as one of the major bulk purchasers of the first Respondent for further sale in European markets

has immensely suffered.

The Plaintiff has filed about 14 certificates of registration of different trademarks in their favour, as plaint document Nos. 1 to 14. The

Trademark Nos. 669801, 669802, 669803, 669804 and 669805, are respectively in respect of the goods in classes 7, 9, 12, 8 and 11. These

trademarks have been registered with effect from 21.6.1995. The trademark comprises of the two English alphabets ""C"" and ""G"" written in such a

manner within a rectangular box that the upper curvature of the letter ""C"" rests on the letter ""G"". The rectangular box also has opening on all 4 sides

in the middle.

The trademark numbers 1340546, 1340547, 1356615, 1356616, 1363319, 1400426, 1468981, 1598556 and 1598557 are in respect of

goods falling respectively under (i) classes 7, 8, 9, 11, 12 (ii) classes 7, 8, 9, 11, 12 (iii) classes 37, 39, 40, 42 (iv) classes 37, 39, 40, 42 (v)

classes 7, 8, 9, 11, 12, 37, 39, 40, 42 (vi) class 11 (vii) classes 7, 8, 9 and 10 (viii) classes 7, 8, 9, 11, 35, 37, 42 and (ix) classes 7, 8, 9, 11, 35,

37, 42. The trademarks registered under all these numbers are either the same as found in document Nos. 1 to 5 or the words ""CROMPTON

GREAVES"" or ""Crompton"" or ""CG Care Tens"".

The plaint document No. 15 is the website information indicating the registration of the logo of the Plaintiff containing the letters ""CG"" as a

Community Trade Mark (CTM) in the European Union. But the date of registration is 5.8.2010. The certificate is issued by the Office for

Harmonization in the Internal Market (OHIM).

The extract of the Online Certifications Directory issued by the Underwriters Laboratories (UL), containing the name of the Plaintiff, is filed as

document No. 17. Similarly, the extract from the website of CSA International containing the name of the Plaintiff in the Certified Product Listings

is filed as plaint document No. 18.

In order to show that the second Defendant was their customer, the Plaintiff has filed delivery challans cum invoices dated 29.1.2000,

11.2.2000, 26.2.2000 and 16.3.2000 as plaint document Nos. 19 to 23. The email correspondence regarding a new logo and regarding packing

box, sticker etc., are all filed as document Nos. 24 to 27. The purchase orders placed by the Plaintiff on the Defendants and the delivery challans

cum invoices, are filed as document Nos. 29 to 36 series. The specimen of the Defendant''s MCG Switch Gear (Surface Mounted Isolator) is filed

as document No. 38.

The purchase order placed by the Plaintiff with the first Defendant, the delivery challan issued by the first Defendant, the way bill issued by the

transporter, the receipt acknowledging delivery of the first Defendants'' goods to the Plaintiff and the goods invoice note of the Plaintiff, are filed as

additional document Nos. 1 to 5 by the Plaintiff.

The first Defendant has filed a set of about 22 documents and another set of 7 additional documents. The Certificates of Registration of

Design, issued by the Controller General of Patents Designs and Trade Marks in respect of ""Contact Housing"" and ""Rail Mounting Base"" are filed

as document Nos. 1 and 2. The Registration Certificates issued by the Copyright Office in favour of the first Defendant, forwarded by a letter sent

by their Attorneys to the first Respondent, are filed as document Nos. 3 and 4. The Trade Mark Registration Certificates in respect of the word

Salzar"" are filed as document No. 5 series. The invoices raised by the first Respondent on various customers are filed as document Nos. 6 and 7.

The Patent Certificate issued in respect of ""Integral Cam Operated Rotary Switch"" is filed as document No. 8. The Certificate of Registration

issued by the Ministry of Science and Technology, is filed as document No. 9. The catalogue of their products is filed as document No. 10. The

details of CE Marking is filed as document No. 11. The search results from the web page of the Intellectual Property Office, UK, showing that

several persons have registered the trademark ""MCG"" in different styles, is filed as document No. 12. The catalogue of the products of the second

Respondent is filed as document No. 14. The photographs of the Salzar branded switch supplied to the second Respondent are filed as document

No. 16 series.

The UL (Underwriters Laboratories) Certificate and CSA (Canadian Standards Association) Certificates for the products manufactured by the

first Defendant, are filed as document No. 21 series. The photographs of the products manufactured by various other manufacturers are also filed

as document No. 22 series.

The admitted facts that could be culled out from the pleadings of all the parties and the documents filed by the Plaintiff and the first Defendant,

are as follows:

(i) that the Plaintiff is the registered proprietor of various trademarks either containing the logo ""CG"" with or without other things or containing the

word ""CROMPTON"" or ""CG Care Tens"" or ""CGL"" written in a stylised manner, in respect of goods under classes 7, 8, 9, 10, 11, 12, 35, 37,

39, 40 and 42;

(ii) that the Plaintiff is also the registered proprietor of the above trademarks as Community Trade Mark (CTM) in the European Union;

(iii) that the Plaintiff was getting the goods intended for exports, manufactured by the first Defendant, from the year 2000 and the first Defendant

was affixing the Plaintiff''s CG logo on such goods at the request of the Plaintiff;

(iv) that the Plaintiff also directed the first Defendant to use CE, UL and CSA markings with the catalogue numbers and the product coding on a

sticker above the switch, which could be seen by a customer by opening the outer carton and removing the screws and examining the inner switch;

(v) that the second Defendant, which is a company based in UK, had been importing the aforesaid products from the Plaintiff, with the full

knowledge that they were manufactured by the first Defendant;

(vi) that in the recent past, the second Defendant started buying rotary switches, isolator switches, switch gears, circuit breakers and other

electrical equipment, directly from the first Defendant, which actually became the cause for the present proceedings.

Therefore, even at the outset, the dispute between the Plaintiff and the Defendants appear to be more of a trade rivalry than a trade mark

rivalry. What the Plaintiff seeks to injunct the Defendants from, are (i) the infringement of their registered trademarks CG, Crompton Greaves etc.,

by adopting the mark ""MCG"" (ii) passing off, by the Defendants of their products, by adopting and using the Plaintiff''s International Standard

Certifications such as UL, CE and CSA and (iii) the usage of the Plaintiff''s trade secrets, confidential information, customer data, international

standard certifications, product code, catalogue numbers etc.

Out of the above, the prayer in respect of the usage of UL, CE and CSA International Standard Certifications and the prayer in respect of

Plaintiff''s trade secrets, confidential information etc., are either misconceived or do not survive any longer. This is due to the following reasons:

(i) In so far as certification by UL, CE and CSA are concerned, it is common knowledge that these certifications are required for the electrical

goods to enter into the markets in certain countries. The letters ""CE"" stand for conformite europeenne, which is a French equivalent of the English

term ""European Conformity"". CE marking is mandatory on many products in the European Economic Area. Therefore, all persons selling electrical

goods in the European Market are obliged to make CE marking on their products. But each manufacturer will have a different file number/ folio

number. Therefore, the applicant cannot seek to injunct the Respondents from having a CE marking on their products. The only right that the

applicant has is to prevent the Respondents from mentioning use of the applicants file/folio number in the CE marking on their goods. Similarly, UL

is the certification by Underwriters Laboratories and CSA is a certification by Canadian Standards Association. Therefore, the prayer in respect of

the usage of the UL, CE and CSA certifications, is wholly misconceived, except that the applicant can seek to injunct the Respondents from using

the very same file/folio numbers.

(ii) In so far as trade secrets, confidential information etc., are concerned, it is an admitted fact that the applicant/Plaintiff was getting their products

manufactured by the first Respondent, for eventual export to the second Respondent and to others. The first Respondent is the proprietor of (i) the

registered designs of ""Contact Housing"" and ""Rail Mounting Base"", as seen from their document Nos. 1 and 2 (ii) the registered copyrights in

respect of the artistic work in the above products, as seen from their document Nos. 3 and 4 (iii) the registered trademarks as seen from their

document No. 5 and (iv) the registered patent in respect of Integral Cam operated rotary switch, as seen from their document No. 8. Therefore, it

is hard to believe that the first Respondent poached into the trade secrets and confidential information of the applicant. There is hardly any proof to

support such a stand of the applicant.

Therefore, what we are now left with, is only the question of infringement of the registered trademarks of the applicant and passing off,

revolving around the alphabets ""CG"". The fact that the Plaintiff is the registered proprietor of various trademarks revolving around the alphabets

CG"", is borne out by the various certificates of registration filed by the Plaintiff as document Nos. 1 to 14. The fact that the applicant had obtained

registration of the CG logo as a Community Trade Mark (CTM) in the European Union is also borne out by document No. 15. Therefore, prima

facie, the Plaintiff is entitled to the rights flowing out of Sections 28 and 29 of the Trade Marks Act, 1999, subject to the limitations prescribed by

the other provisions.

In the invoices raised by the first Respondent on the second Respondent, filed as plaint document No. 37 series, there is no mention of the

trademark ""CG"" in any form whatsoever. The goods sold under those invoices are described in the invoices only as switches, load break

switch/change over switch. But it is the case of the applicant that when the outer case of the switches is opened by removing the screws, a sticker

could be noticed in the interior, containing the letters ""MCG"". This, according to the applicant constitutes an infringement of the trademark, by

virtue of the provisions of the Act.

In response to the above, it is contended by the Respondents that the mark ""MCG"" is the registered trademark of a company by name Motor

Control and Industrial Switchgear, which is part of a group of companies called City Electrical Factors Ltd. (CEF). The trademark is registered in

UK under TM No. 2428465. The word ""MCG"" is an acronym for ""Motor Control and industrial switch Gear"". The said company CEF purchases

switch gears from the second Respondent in UK. The switch gears sold by the second Respondent to their customer CEF, are obliged to carry the

trademark MCG of the company CEF. The same cannot constitute an infringement.

In support of their above contentions, the first Respondent has produced the search results from the website of the Intellectual Property Office

of the Government of UK, as first Respondent''s document No. 12. It shows that the mark MCG, written in different artistic styles, has been

registered as trademarks under different trade mark numbers.

In the light of the above pleadings and the documents, the questions that arise for consideration are (i) whether the use of the mark MCG by

the first Defendant in the products intended for export to the second Defendant would constitute an infringement in terms of the Act and (ii)

whether the use of the mark in the inner casing of the switchgear, in a manner not visible to the end users, but visible only after the opening of the

outer casing by removing the screws, would constitute an infringement.

In order to find an answer to the first question, it is necessary to look at Section 56, which reads as follows:

Use of trademark for export trade and use when form of trade connection changes. --(1) The application in India of trade mark to goods to be

exported from India or in relation to services for use outside India and any other act done in India in relation to goods to be so exported or

services so rendered outside India which, if done in relation to goods to be sold or services provided or otherwise trade in within India would

constitute use of a trade mark therein, shall be deemed to constitute use of the trade mark in relation to those goods or services for any purpose for

which such use is material under this Act or any other law.

(2) The use of a registered trade mark in relation to goods or services between which and the person using the mark any form of connection in the

course of trade subsists shall not be deemed to be likely to cause deception or confusion on the ground only that the mark has been or is used in

relation to goods or services between which and the said person or a predecessor in title of that person a different form of connection in the course

of trade subsisted or subsists.

A plain reading of Section 56(1) makes it clear that if a trademark is applied in India, upon goods to be exported from India, it shall be

deemed to be the use of the trademark in relation to those goods, for any purpose for which such use is material under this Act or any other law.

But the condition for such a deeming fiction to come into play is that such an application of the trademark, if done in relation to goods to be sold

within India, should constitute use of a trademark. In other words, the Court must first test whether the application in India, of the trademark, upon

goods or services traded within India, constitutes the use of the mark or not. If it does, then the application of the trademark upon goods exported

from India would also constitute the use of the mark.

But Section 56(1) is also qualified in its operation. Though it creates a deeming fiction by holding that the application of the trademark on

goods intended for export from India would also constitute ""the use of the trademark"", the last part of Section 56(1) says that such deemed use of

the trademark would be for any purpose for which such use is material under this Act or any other law.

As a matter of fact, Section 29(6)(c) itself stipulates that for the purposes of Section 29, a person will be said to be using a registered mark, if

he exports goods under the mark. Interestingly, the whole of Section 29 deals with infringement and Sub-section (6) of Section 29 gives an

indication of what constitutes the use of a registered mark, for the purposes of Section 29 viz., infringement. Section 56(1) speaks of the ""use of a

trade mark"", but does not speak either of ""the use of a registered mark"" or about ""infringement"", though Section 29(6) speaks of ""the use of a

registered mark"" for the purpose of determining whether there was ""infringement"" or not. Curiously, Sub-section (2) of Section 56 speaks of the

use of a registered trademark, though Sub-section (1) of Section 56 does not speak of the use of a registered trademark, but speaks only of the

use of a trade mark"".

Section 2(2)(c) of the Act, prescribes as to what constitutes ""the use of a mark"", for the purposes of the Act, unless the context otherwise

requires. It reads as follows:

(2) In this Act, unless the context otherwise requires, any reference

(c) to the use of a mark,

(i) in relation to goods, shall be construed as a reference to the use of the mark upon, or in any physical or in any other relation whatsoever, to such

goods;

(ii) in relation to services, shall be construed as a reference to the use of the mark as or as part of any statement about the availability, provision or

performance of such services.

The expression ""use of the mark"" in the Act, is intended to serve two purposes, viz., (i) to see if such use by third parties, constitutes

infringement and (ii) to see if there is bona fide usage of the mark by the proprietor of the mark himself, to enable him either to obtain registration or

to continue to have the benefit of registration under Chapter VI. To put it differently, the expression ""use of the mark"" is used in the Act, (i) in some

places with reference to the use by the proprietor of the mark himself and (ii) in other places with reference to the use by persons other than the

proprietor of the mark. Therefore, the meaning to be assigned to the expression, depends solely upon the context. This is why, a distinction is

maintained between the use of the same expression in Chapter IV including Section 29(6)(c) and the use of the same expression in Chapter VI

including Section 56(1). In Chapter IV, the expression ""use of the mark"" is used predominantly in connection with the use by third parties,

tantamounting to infringement and the limitations upon the registered proprietor for prohibiting the others from using his mark. On the other hand, in

Chapter VI, the same expression is used in connection with the use of the mark by the proprietor himself, either for the purpose of entitling him to

the registration of the mark or for the purpose of retention of the already registered mark in the Register.

It is true that the use may be other than physical, as held by the Apex Court in Hardie Trading Ltd. and Another Vs. Addisons Paint and

Chemicals Ltd., . But the said decision arose out of a complaint of non-use by the proprietor, with reference to Section 46 (falling under Chapter

VI). The use or nonuse (by the proprietor), dealt with by Chapter VI, has an impact upon the eligibility for registration or the entitlement to

continue to have the benefit of registration. Therefore, the same expression acquires a slightly different connotation in Chapter VI than in Chapter

IV.

Keeping the above fundamental principles in mind, if we look at the pleadings, it is clear that in the past, the first Defendant was actually affixing

the registered trademark of the Plaintiff viz.,""CG"", on the goods exported to the second Defendant at the instance of the Plaintiff himself. In other

words, the first Defendant was acting as a Job Work Contractor or Sub Contractor for the Plaintiff in respect of the goods exported by them to

the second Defendant.

But today, the second Defendant has started engaging the first Defendant directly, for the supply of switchgears, for eventual sale and supply to

another company in UK by name CEF. Therefore, the first Defendant is applying the trademark ""MCG"" of the said company CEF, on the goods

exported to the second Defendant. The application of the trademark ""MCG"" on the goods supplied by the first Defendant to the second

Defendant, is not intended either to cause confusion in the minds of the public or to create an impression that the goods are that of the Plaintiff.

Even if the first Defendant makes exports without affixing any trademark on the goods, the supplier for whom they are intended, viz., CEF, would

affix and would be entitled to affix their registered trademark MCG before tapping the market. At that stage, the Plaintiff would have no cause to

complain, since the use of a registered trademark by the proprietor, would not tantamount to infringement of the registered trademark of another.

This is clear from Section 30(2)(e) of the Act.

Though to claim protection u/s 30(2)(e), both the registered trademark as well as the infringing mark should have been registered under this

Act, a similar protection would be available to the Defendants herein, for two reasons.

(i) While the application of the mark MCG by the first Defendant takes place in India, the infringement, if at all there is any, takes place outside

India, due to the fact that the supply is to a specific customer outside India, who himself has registration for the said trademark at the place of

supply viz., UK.

(ii) In the European market, the Plaintiff has obtained registration of the CG logo as a Community Trade Mark (CTM) and the ultimate supplier

viz., CEF has also obtained registration of the trademark MCG in UK. Therefore, if the Plaintiff initiates action in UK against CEF, they would

have protection under the European Council Directives, under provisions similar to Section 30(2)(e) of our Act. As a matter of fact, u/s 11(1) of

the U.K. Trade Marks Act, 1994, a registered trademark is not infringed by the use of another registered trademark in relation to goods or

services for which the latter is registered.

Therefore, I am of the view that the application by the first Defendant, of the registered trademark of the ultimate importer in UK, on the goods

intended for export to such importer in UK, would not constitute an infringing use of the registered trademark of the Plaintiff, either u/s 29(6)(c) or

u/s 56(1) of the Act.

In view of the above, the decisions relied upon by the learned Senior Counsel for the applicant in B.K. Engineering Company v. U.B.H.I.

Enterprises (Regd.) Ludhiana AIR 1985 Del 210 and in Kirorimal Kashiram Marketing and Agencies P. Ltd v. Sachdeva and Sons Industries P.

Ltd 2009 (39) PTC 142 (Del), would not advance the cause of the applicant. First of all, it was made clear even in B.K. Engineering case, that

there should be a likelihood of a substantial section of the purchasing public being misled by the use of the mark. In the case on hand, the first

Defendant is admittedly not offering the product for sale to the public. The first Defendant is manufacturing the product for one particular customer

viz., the second Defendant, who himself is importing it into UK for the benefit of another specified customer by name CEF, who themselves are the

proprietors of the trade mark MCG. Similarly, the decision in Kirorimal Kashiram also arose out of the sale in India and abroad to any willing

purchaser.

In any case, the mark MCG is applied by the first Defendant on the goods in such a manner that it is not visible on the face of the goods.

Admittedly, the mark appears in the inner casing of the switchgears and it becomes visible only if the screws are released and the outer casing is

removed. It is not the case of the Plaintiff that the Defendants have adopted this practice dishonestly with a view to remove the outer casing and

offer them for sale when the goods reach the market. As a matter of fact, the goods are not even intended for sale in the market, at the instance of

the first or second Defendant. They are intended for supply to the company CEF, which itself has obtained registration of the mark MCG in UK.

In view of all the above, I am of the view that the Plaintiff has not made out a prima facie case. Therefore, they are not entitled to an order of

injunction.

Hence, the applications for injunction O.A. Nos. 925 to 927 of 2010 are dismissed. A. No. 5573 of 2010 for vacating the interim injunction

earlier granted in O.A. No. 926 of 2010 is allowed. The application for appointment of Commissioner in A. No. 4677 of 2010 is closed as no

further orders are necessary. The application for the issue of a pro-order in A. No. 4678 of 2010 is dismissed. However, the application under

Clause 14 of the Letters Patent A. No. 4676 of 2010, for combining the causes of action is allowed. There will be no order as to costs.