Disney Enterprises INC and Another vs Gurcharan Batra and Others

Manmohan Singh, J.—The plaintiffs have filed the above-mentioned suit on 04.04.2006 for permanent injunction restraining infringement of trademark, passing off and trade mark dilution, rendition of account of profits and delivery up the infringing material etc.

The plaintiff No.1, namely Disney Enterprises, Inc. is a Corporation organized and existing under the laws of the State of Delaware in the United States of America with its principal place of business at 500 South Buena Vista Street, Burbank, California 91521-6840, USA.

The plaintiff No.2, a subsidiary of plaintiff No.1, is a company incorporated under the Indian Companies Act. The registered office of plaintiff No.2 is at 4/F, Peninsula Tower-1, Ganapatrao Kadam Marg, Lower Parel, Mumbai 400013.

The plaintiff''s business is the merchandising and licensing of distinctive elements associated with its motion pictures and television programs, including but not limited to, the world-famous characters Mickey Mouse, Minnie Mouse, Donald Duck, Daisy Duck, Goofy, Pluto and Winnie the Pooh, as well as characters from "DISNEY trademark" animated motion pictures, including "Snow White and the Seven Dwarfs," "Pinocchio," "The Lion King," "Aladdin," "Beauty and the Beast," "The Little Mermaid," "Pocahontas," "Hunchback of Notre Dame," "Hercules," "Mulan," and "Toy Story", the images of which serve as trademarks and also constitute copyrighted artwork.

The case of the plaintiffs is that plaintiff No.1 through its subsidiaries and affiliated companies have acquired global reputation as a leader in the production and marketing of, inter alia, animated and live action motion pictures, theme parks, publications, merchandise, artwork and other goods and services featuring the plaintiffs name and Disney Characters. The plaintiff No.1 has today established a formidable presence not only in the studio entertainment sector, but also in the theme parks and resorts, media networks and consumer products arenas as well. Various cartoon films originating from the plaintiffs featuring various Disney characters have been regularly shown on television channels worldwide, including in India, for decades. These cartoons have been watched by millions of viewers in their homes.

It is alleged that the plaintiff''s characters although generally appearing in movies and cartoons, have found a place in a variety of goods, including, but not limited to, stationery products, apparel, toys, books and video games, to name a few.

The plaintiff''s characters Mickey Mouse, Minnie Mouse, Donald Duck, Daisy Duck, Goofy and Winnie the Pooh are perhaps some of the most universally known and loved cartoon characters in the world. For generations, children and adults alike have been entertained by Mickey Mouse, Minnie Mouse, Donald Duck, Daisy Duck, Goofy and Winnie the Pooh, who have appeared in many animated motion pictures and cartoons, as well as in Disney''s theme parks, television shows, video cassettes, compact disks, toys, comics, books, art work, and in various other media. The plaintiffs own all rights, title and interest in and to Disney Enterprises, Inc, and holds the exclusive rights to market and sell Disney Enterprises, lnc merchandise. The range of merchandise includes, but is not limited to, stationery, party hats, decoration material, clothing, toys displaying the images of the Disney Characters.

The plaintiffs possess both common law trademark rights to the Disney Devise Marks, as well as trademark registrations for a number of Disney Device Marks in more than 58 countries the world over. The list of countries in which the plaintiff''s trademarks are registered has been filed in the present proceedings.

The plaintiff No.1 also owns all rights, title and interest in and to, and holds the exclusive rights to market and sell services and merchandise in conjunction with the Plaintiffs famous Disney trademark and family of Disney trademarks and service marks, including but not limited to "Mickey Mouse," "Winnie the Pooh," "Disney", Disney.com, Walt Disney World, and Disneyland. The plaintiffs have utilized many of the Disney Word Marks in conjunction with the sale of a wide variety of products and services, for well over fifty years. Additionally, the plaintiffs possess numerous registrations with the United States Patent and Trademark Office for marks, which consist of or include the word mark Disney.

The plaintiffs are also the registered proprietors of both, a variety of word marks and device marks in India. The photocopies of Certificates for use in Legal Proceedings of the Disney Characters have been filed in the present proceedings. As per plaintiffs, the aforesaid trademarks are valid and subsisting and are, therefore, in full legal force conferring on the plaintiffs the full right to their exclusive use and to restrain use of any identical or deceptively similar marks by unauthorized persons.

It is averred in the plaint that the plaintiff''s Trademarks when used in respect of such things as clothing, stationary, party decoration material, retail and hotel services, books, records and tapes, entertainment services, resort services, toys and travel services, signify to the purchaser that the product or service comes from the plaintiffs and is of the highest quality. The plaintiffs, either themselves manufacture or provides a product or service or licence others to do so, ensure at all times that the products and/or services bearing their Disney trademarks are of the highest standards.

The plaintiffs'' licensees are engaged in the manufacturing and selling of various products bearing the Disney trade mark and/or the Disney characters. The plaintiffs have advertised the Disney Characters over the years, and various advertisements bearing Disney Characters have been published in various newspapers, magazines and internet etc.

It is stated that Disney Characters are widely recognized symbols of the quality and high standards of the plaintiff''s goods and services alone and the plaintiffs have built up goodwill of incalculable value in the said characters. So much so that a reputed authority on brands i.e. World''s Greatest Brands published by Interbrand states that plaintiff No.1 reinvented the business of character merchandizing, a copy of the relevant extract from the same has been filed in the present proceedings. According to the 2009 study by Interbrand and Business Week, plaintiff No.1 is the tenth greatest brand in the world with a brand value of �28,447 million. According to the 2009 study by Business Week, the plaintiff No.1 is the tenth greatest brand in the World.

The word and devise marks Mickey Mouse, Minnie Mouse, Donald Duck, Daisy Duck, Goofy and Winnie the Pooh, inter alia, when used in relation to goods or services because of the reputation and goodwill attached to them, are able to distinguish that class of goods or services from others.

The plaintiffs have the exclusive right to use or authorize the use of the name and physical depiction of the Disney Characters under the trademark and unfair competition laws.

The plaintiff No.1 has set up a joint venture company, plaintiff No.2, in India under a merchandising programme for licensing its fictional characters to various business entities for commercial and promotional purposes.

It is stated that in the month of March, 2006, the plaintiff''s discovered that the markets in Delhi were flooded with counterfeit school bags bearing the names and likenesses of the plaintiffs'' characters Mickey Mouse, Minnie Mouse, Goofy, Pluto and Daisy Duck. Thereafter, the plaintiff''s representative visited the premises of the defendants to collect evidence of the infringement and found that the defendants were engaged in selling counterfeit bags. The plaintiff''s representative purchased counterfeit bags from defendant No.2 to defendant No.10. In the month of December 2009, the plaintiff''s representative once again visited the premises of defendant No.9 and found that the defendants are still dealing counterfeit products bearing the Disney characters. The cash receipt and photographs of the products purchased from the premises of defendant No.9 have been filed.

The use of the impugned mark by the defendant No.9 in relation to or upon paper articles, printed material, teaching materials, stationery etc in the course of their business amounts to an infringement of the plaintiff''s registered trademarks and passing off of their business as one that is authorized by the plaintiffs.

From time to time, there have been efforts made by various parties to cash in on the reputation of the plaintiffs by adopting their marks, and appropriate proceedings have been taken up by the plaintiffs to defend their statutory and common law rights in the said marks and the Courts in India have repeatedly passed orders in favour of the plaintiffs.

It is stated by the plaintiffs that the adoption of the identical marks Mickey Mouse, Minnie Mouse, Donald Duck, Daisy Duck, Goofy and Pluto by the defendants is a mala fide attempt to pass off their goods as those of the plaintiffs'' or to imply that their goods are connected with or approved by the plaintiffs in some manner. The use of the Disney characters is an unauthorized use by the defendants herein. The defendants have not sought the plaintiff''s consent, permission or licence prior to using the names and depiction of the Disney characters and have clearly been inspired to adopt the same on account of goodwill and reputation of the plaintiff''s well-known characters.

It is also the case of the plaintiffs that the illegal trade activities of the defendants have caused incalculable harm and injury to the business, goodwill and reputation of the plaintiffs. The plaintiffs have suffered dilution and debasement of the goodwill, reputation and positive associations linked to the plaintiffs'' trademark occasioned by the loss of distinctiveness, uniqueness and exclusivity attached thereto. All profits earned by the defendants in pursuance to its illegal activities are the plaintiffs'' losses and amount to unjust enrichment.

This Court vide order dated 05.04.2006 granted an ex parte ad-interim injunction in favour of the plaintiffs and against the defendants thereby restraining them from selling or manufacturing school bags containing pictures or likenesses of the Disney characters. The Local Commissioners were also appointed to visit the premises of the defendants and seize the infringing products at the premises of the defendants.

The matter was decreed qua defendants No.1 to 8, 10 and 11 in terms of the compromise arrived at between the plaintiffs and the said defendants.

Defendant No.9 failed to appear before the Court despite its service, hence defendant No.9 was proceeded ex parte vide order dated 28.05.2008.

The plaintiffs filed their ex parte evidence by way of affidavit of Col. Retd. J.K.Sharma, their Constituted Attorney.

The present suit has been instituted by Mr. Anand Banerjee, the previous Constituted Attorney of plaintiff No.1 by virtue of Power of Attorney dated 16.08.2005 issued in his favour by plaintiff No.1 and the same has been exhibited as Ex.PW1/4. Mr. Akhil Prasad, the previous constituted attorney of the plaintiff No.2 has instituted the present suit on behalf of plaintiff No.2 by virtue of a Power of Attorney dated 16.01.2006 issued by plaintiff No.2 and the same has been exhibited as Mark-C. The Power of Attorney issued in favour of Mr. Akhil Prasad was signed by Mr. Rajat Jain who was authorized to issue the said POA vide a Board Resolution dated 09.12.2005. The said Resolution has been marked as Ex.PW1/6.

Mr. Col. (Retd.) J. K. Sharma is the present Constituted Attorney of the plaintiffs respectively and Col. (Retd.) Sharma''s evidence by way of affidavit has been filed in the present proceedings. Col. (Retd.) Sharma was authorized by virtue of a Power of Attorney dated 07.07.2008 issued by plaintiff No.1 in his favour, which has been exhibited as Ex.PW1/1. Plaintiff No.2 also authorized Col. (Retd.) Sharma by virtue of a Power of Attorney dated 08.07.2008, which has been exhibited as Ex.PW1/2.

The plaintiff No.1 together with its subsidiaries and affiliates is a diversified international family and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products, Extracts from the internet evidencing that plaintiff No.1 is engaged in the business of theme parks, movies etc. has been exhibited as Ex.PW1/8.

The Annual reports of plaintiff No.1 are exhibited as Ex.PW1/9. The plaintiff''s characters are used in respect of a variety of goods, including but not limited to, stationery products, apparel, toys, books, video games, to name a few. Internet extracts evidencing the same have been exhibited as Ex.PW1/10.

The list of countries in which the Plaintiff''s trademarks are registered has been marked as Mark-A. The extracts from the from the website of the US and UK Trademark Registry evidencing that the aforesaid marks are registered in favour of plaintiff No.1 have been exhibited as Ex.PW1/12. The Certificate for use in legal proceedings evidencing the same has been exhibited as Ex.PW1/13.

The extracts from a reputed authority on brands i.e. World''s Greatest Brand''s published by Interbrand states that plaintiff No.1 has virtually reinvented the business of ''character merchandizing'' and the said extract has been exhibited as Ex.PW1/14.

An internet extract from www.interbrand.com stating that plaintiff No.1 is the tenth greatest brand in the world with a brand value of �28,447 million has been exhibited as Ex.PW1/15. An extract from the Business Week stating that plaintiff No.1 is the tenth greatest brand in the world is already exhibited as Ex.PW1/16. Certified copies of orders passed in favour of the plaintiffs have been exhibited as Ex.PW1/22.

The plaintiffs also hold registrations in Class-28 under Nos.743127, 596850, 516168 respectively which refers to ''games, playthings gymnastic and sporting articles not included in other classes, decorations of chrismas tree''. The certificate for use in legal proceedings for the plaintiff''s trademark registrations in Class-28 has been exhibited as Ex.PW1/13.

In the month of March, 2006 the plaintiffs discovered that the markets in Delhi were flooded with counterfeit school bags bearing the plaintiff''s Disney characters. Thereafter, the plaintiffs conducted an investigation of various parties including that of defendant No.9 and discovered that defendant No.9 is a retailer engaged in selling counterfeit school bags manufactured by defendant No.2 bearing the Disney characters. Photographs of said counterfeit bags purchased from the premises of defendant No.9 have been exhibited as Ex.PW1/18.

In the month of December 2009, the plaintiff''s representative once again visited the premises of defendant No.9 and found that the said defendant is still dealing the counterfeit products bearing the Disney characters. The cash receipt and photographs of the products purchased from the premises of defendant No.9 have been exhibited as Ex.PW1/10, Ex.PW1/20 and Ex.PW1/21.

It is submitted by the plaintiffs that they have suffered and are likely to suffer incalculable harm and injury to the business, goodwill and reputation on account of passing off of the defendant''s products as that of the plaintiffs. Therefore, the plaintiffs are entitled to permanent injunction and damages against defendant No.9 in the present matter.

The learned counsel for the plaintiffs has relied upon the judgment passed in the case of James Chadwick and Bros. Ltd. Vs. The National Sewing Thread Co. Ltd., , the relevant paras of which read as under:-

Reliance was placed on June''s Case (Seville Perfumery Ld. vs. June Perfect Ld. and F.W. Woolworth and Co. Ltd. (1941) 58 R.P.C. 147). In that case, the distinguishing feature of the registered trade mark and the proposed trade mark was the word ''June'', and the Master of the Rolls in his judgment at p.162 observes:

Now the question of resemblance and the likelihood of deception are to be considered by reference not only to the whole mark, but also to its distinguishing or essential features, if any.

The learned Master of the Rolls also says that (p. 162):

In such cases the mark comes to be remembered by some feature in it which strikes the eye and fixes itself in the recollection. Such a feature is referred to sometimes as the distinguishing feature, sometimes as the essential feature, of the mark.

Therefore, the test we must apply in this case is, what is the feature in the appellants'' trade mark which strikes the eye and fixes itself in the recollection, and the only answer to this question is that it is the Eagle which so strikes the eye and fixes itself in the recollection. Then we have the case of C. F. G. E. (In the matter of the Application of the Chemische Fabrik Greisheim Elektron for Registration of a Trade Mark) (1910) 27 R. P. C. 201 and this case was cited before us by the Advocate-General in order to draw our attention to the considerable dissimilarity between the proposed and the registered trade mark. The reason why registration was refused to the proposed trade mark was that the registered trade mark was a representation of primitive Eastern Dye Works and the same idea was conveyed by the proposed trade mark. It was urged before Neville J. that one trade mark was a representation of Japanese Dye Works and the other was Chinese. That argument did not find favour with the learned Judge and he answered it by saying that if orders were sent from the East to agents of either of these firms and they were told to send goods which had obtained popularity in the market by the trade mark representing Eastern Dye Works, goods bearing either trademark would have answered to the requisition, and the main ground on which the learned Judge refused registration was that the main feature of both the pictures was identical, and according to the learned Judge that concluded the question. Our attention has also been drawn to one case of an Elephant Trade Mark in Upper Assam Tea Co. vs. Herbert and Co., (1889) 7 R. P. C. 183 where from the trade marks printed in the report it is clear that the two elephants in the two trademarks look entirely different judging by the way they are represented, and yet, because the goods had been associated with the name of the elephant, injunction was granted to restrain the deft, who also wanted his goods to be sold under a trade mark, the main feature of which was an elephant. There is another case (In the Matter of Farrow''s Trade Mark, (1890) 7 R. P. C 260) where we have trademarks of two buffaloes which look entirely dissimilar, and yet, again, as the goods had come to be associated with the buffalo, registration was refused to the subsequent applicant. There is another case also laying down the same principle in the Matter of the Application of Pomril, Ld., (1901) 18 R. P. C. 181, where the goods in question were cider and the proposed trade mark had the name ''Pormil'' written on half cut apple and the opposition came from sellers of cider who had their trade mark also containing an apple with the name "Apple Brand." In one case the name was "Pomril" and in the other case the name was "Apple Brand." Still registration was refused as the apple was considered to be the distinguishing and essential feature.

I should like to make it clear that there may be cases where dissimilarity in the object represented may be the deciding factor. If, for instance, this particular class of goods are sold by several dealers, all under different kinds of Eagle trademarks, then the purchaser is expected to know the difference between one trade mark and another, knowing as he does that more than one person sells goods under the same appellation. But when we have a case, as we have in this case, where only the appellants sell this class of goods under the Eagle Brand and their goods are known as Eagle or Eagley, then the position is very different, and any attempt to sell goods under a trade mark which fixes in the mind of the purchaser the association of an Eagle would not be justified.

The decision in James Chadwick (supra) was also confirmed by the Supreme Court in the case titled as National Sewing Thread Co. Ltd. Vs. James Chadwick and Bros. Ltd. (J. and P. Coats Ltd., Assignee), .

It is the admitted position that the suit against defendants No.1 to 8, 10 and 11 has already been decreed by way of compromise. As far as the only remaining defendant No.9 is concerned, the evidence adduced by the plaintiffs has gone unrebutted. There is a sufficient material on record to show that the plaintiffs are the proprietor of the trademarks in question which have been infringed by defendant No.9. The said defendant was also passing off its business as that of the plaintiffs. Therefore, the plaintiffs are entitled for a decree for permanent injunction. It is held that the suit of the plaintiffs is decreed in terms of paragraph 29 (i) and (ii) of the plaint. As regards the relief claimed by the plaintiffs in paragraph 29 (iii), (iv) and (v) are concerned, the plaintiffs are granted a decree of damages to the tune of Rs. 1 lac against defendant No.9. The plaintiffs shall also be entitled to cost of the suit. Decree be drawn accordingly. All pending applications stand disposed of.