Needle Industries (India) Limited vs Sanjay Jaiswal and Others

R. Jayasimha Babu, J.—The appellant is the registered owner of the copyright in the ''pony label'', the registration number being

A/346861/81 dated 2.11.1981.

The annexure to the Registration Certificate which sets out the label is as under :

The appellant, which is the leading manufacturer in the country for all kinds of needles is also the owner of several trade marks with the name

''pony''. It holds seven trade mark registration certificates for goods under class 26, 4 certificates for goods under class 10, one under class 8 and

two under class 4. It''s marks, as also the marks used by the defendants which is practically a replica of the plaintiffs mark are as under,

The earliest of the registration certificate is dated 7.7.1971. As the name of the appellant ''Needle Industries Ltd.'' indicates, it''s primary

activities are manufacturing and marketing needles. The registration obtained for it''s mark under class 26 relate to things used in knitting, stitching

and tailoring primarily. The goods in respect of which such registration has been obtained in class 26 include knitting needles, knitting pins, crochet

hooks, snap fastners, needles of all kinds, safety pins, fastners of all kinds, tailoring accessories etc. It has registered the trademark ''pony'' not only

in India but in a large number of other countries as well.

The appellant entered the field of manufacture of sewing threads in the year 1994 and it has applied for registration of the mark ''pony'' for

sewing thread in class 23. That application is still pending. Defendant 2 was an agent of the appellant and was marketing it''s needles for a long

number of years from 1983. According to the appellant, the second defendant was instrumental in setting up the first defendant to manufacture and

market sewing thread by using the trademark ''pony'' and ''pony label'' without the permission of the appellant. The appellant claims that it came to

know of such user only when the application that had been filed by the first defendant in the suit was advertised in the trade mark journal on

16.07.1997, wherein it was mentioned that user of the mark by the second defendant was from the year 1987. The appellant after filing opposition

to that application filed by the defendant filed a suit in this Court in C.S. No. 334 of 1998 on 29.4.1998 for an injunction to restrain the defendants

from infringing the plaintiffs copyright as also from passing off sewing threads manufactured by the first defendant, as having emanated from the

appellant. The ex pane injunction granted in favour of plaintiff/appellant on 29.4.1998 was vacated on 18.8.2000 by the Order under appeal.

During the pendency of the suit, an application that had been filed by the first defendant in the suit - Super Thread Industries, for registration of

the mark ''Pony'' for sewing threads was considered and accepted by the Assistant Registrar of Trade Marks at Delhi, who by his order dated

6.7.2000 held, inter alia, that the first defendant had established user of the mark ''pony'' in relation to sewing yarn since the year 1987 by

producing bills and documents pertaining to central excise and further that the registration of the appellant''s mark under class 26 would not

disentitle the first defendant from registering the trade mark in relation to different class of goods, namely sewing thread under class 23.

The injunction which the appellant obtained immediately after the institution of the suit in C.S. No. 334 of 1998 was thereafter dissolved by the

learned single Judge by his order dated 18.8.2000. The appellant being aggrieved is in appeal before us.

Learned counsel for appellant submitted that sewing thread and needles are cognate goods, and that needles and thread are sold through the

same trade channel. The use of the plaintiffs mark by the defendants for first defendant''s sewing thread, it was submitted, results in passing off

those goods as emanating from the appellant, and riding on the goodwill established over the years by the appellant for it''s mark. For all those in

the marker for needles and threads ''pony'' was a well known and trusted label not only in India, but in over fifty other countries in which the mark

had been registered.

Learned counsel for the appellant invited our attention to a number of decisions of the Courts with regard to grant of injunction on the ground of

passing off in relation to unrelated goods in cases where the mark under which the unrelated goods were being sold was well-known, and where

the goods in respect of which pass- ing off was alleged was sold either across the same counter or by other trade chan nels.

Reliance was placed by counsel on the decision of a Division Bench of the Bombay High Court in Kamal Trading Co. v. Gillette UK Ltd.

1988 PTC 1, in which the Court restrained the use of trade mark 7 O''Clock with respect to tooth brushes even though the mark had been

registered in respect of blades, as the mark was well known in the market. It was held that these goods were sold across the same counter, and

that the use of that mark for the tooth brushes would lead to confusion.

The decision of this Court in the case of Caterpillar Inc. USA v. Jorange and Ors. 1997 (Supp.) A.L.R. 464 was also relied on. Therein the

Division Bench of this Court injuncted the use of the mark caterpillar for garments, even though that mark had been registered in respect of heavy

machineries, on the ground that the mark had world wide reputation and use of that mark even in relation to garments would amount to passing off

even though trade channels for the goods were different.

Reliance was also placed on the decision of the Bench of Delhi High Court in the case of Aktlebolaget Volvo of Sweden v. Valvo Steels Ltd.

of Gujarat 1998 (Suppl.) A L.R. 627 wherein injunction was granted against the use of the name of ''Volvo'' as part of corporate name of the

defendants, after holding that it was not essential that a common field of activity be established, it was also held that the crux of the passing off

action lies in possible deception.

The decision of a Division Bench of Bombay High Court in Bajaj Electricals Limited Vs. Metals and Allied Products and Another, : was also

relied on. In that case the use of trade mark ''Bajaj'' when used with respect to utensils was held to amount to passing off.

Counsel also relied on several decisions of learned single Judge of various High Courts in the following cases:

The case of Banga Watch Company Vs. N.V. Philliphs, Eindhoven, Holland and Another, , wherein the use of trade mark ''Phillips'' with respect

to time pieces and wall-clocks was held to amount to passing off on the ground that both types of goods were available across the same counter.

The case of Daimler Benz Aktiegesellschaft and another Vs. Hybo Hindustan, : where the use of the mark Benz in relation to garments and

underwear was injuncted on the ground that it would amount to passing off; even though the owners of the mark ''Benz'' were not engaged in the

manufacture of garments; The case of Bata India Limited Vs. Pyare Lal and Co., Meerut City and Others, : wherein the use of mark ''Batafoam''

with respect to mattresses was injuncted on the ground that the plaintiffs mark ''Bata'' though used in relation to foot wear, was well known and the

user of that mark in relation to mattresses would amount to passing off; the decision of a learned single Judge of this Court in C.S. Nos. 534 and

535 of 1993 in Premier Instruments & Controls Ltd. v. Perfect Automobile Components, decided on 03.02.2000 wherein the use of trade mark

''Pricol'' in relation to lubricants by the defendants was injuncted, eventhough the plaintiffs mark had been, registered in relation to Speedo meters,

as the goods were sold across the same counter; The case of M. Mahendra Shah of Annapurna Enterprises v. Hindustan Lever Ltd. 1997 (2)

A.L.R. 118 wherein the use of the mark ''Annapurna'' for atta was injuncted against, even though the mark had earlier been used only in relation to

salt and the use of mark in respect of atta by the owner of the mark commenced much later; and the case of Kirloskar Diesel Recon Pvt. Ltd. and

another Vs. Kirloskar Proprietary Ltd. and others, : wherein it was held that a common field of activity is not necessary to sustain a claim of

passing off.

Counsel also submitted that in an action for passing off, registration or otherwise of the mark is not relevant. Counsel in this context referred to

the case N.R. Dongre and Others Vs. Whirlpool Corpn. and Another, : wherein the Apex Court held that passing off action by the affected party

even against the registered owner of the trade mark is maintainable. There the trade mark already used by a company had been got registered by

another company through deception to obtain economic benefit of the reputation established for the mark, by injuring the goodwill and business of

the other company.

So far as acquiescence being one of the defences and reason for inaction is concerned, counsel for the appellant invited attention to the case of

Power Control Appliances v. Sumeet Machines Pvt. Ltd. 1994 (2) SCC 44 wherein the Court observed that acquiescence implies positive acts

and not merely silence or inaction such as is involved in laches, and the acquiescence is one facet of delay. It was further held therein that

acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendants.

Counsel for the respondents while not disputing the premier position of appellant in the field of manufacture and marketing of all kinds of

needles, and the fact that defendant-2 had been the agent of the appellants submitted that, as appellant was not in the field of manufacture of

sewing threads, when defendants entered that field, the first defendant was free to adopt the pony mark for sewing threads, as that item falls in a

different class. Counsel relied on the decision of the Supreme Court in the case Vishnudas Trading as Vishnudas Kishandas Vs. Vazir Sultan

Tobacco Co. Ltd., Hyderabad and another, : wherein the Court allowed the rectification of the registration and limited the rights of proprietor of

the trademark Chairman which had been registered for manufacturing tobacco, to Cigarettes, which it did manufacture, and allowed the

rectification.

The Apex Court, in paragraph 50 of the judgment in the case of Vishnudas observed that the controversy in the case before it was ""...only

confined to the propriety and validity of the order of rectification of the registration of trade mark made in favour of the respondent company, and it

is not necessary to address on the questions of infringement of trademarks, passing off, defensive registration etc. The Court went on to further

observe."" In that view of the matter various decisions cited at the bar dealing with the likely prejudice to be suffered by a trader or manufacturer

enjoying registration of trade mark in the event, similar or deceptively similar trademark is allowed to other trader or manufacturer in respect of

similar goods or goods marketed through common trade channel, need not be taken into consideration for the disposal of these appeals"".

The Trade Marks Act does not lay down criteria for determining as to when confusion or deceit is likely to be caused or as to when passing

off is said to take place. Every case must depend upon it''s own peculiar facts. As observed by the Apex Court in the case of Amritdhara

Pharmacy Vs. Satyadeo Gupta, :the value of authorities lies not so much in the actual decision as in the tests applied for determining what is likely

to deceive or cause confusion. The Court in that case with reference to trade mark observed-"" A trade mark is likely to deceive or cause confusion

by its resemblance to another already on the register if it is likely to do so in the course of its legitimate use in a market where the two marks are

assumed to be in use by traders in that market.

In the case of Kaviraj Pandit Durga Dutt Sharma Vs. Navaratna Pharmaceutical Laboratories, : while pointing out the distinction between the

action for passing off and an action for infringement, it was observed by the Court -

While an action for passing off is a common law remedy being in substance an action for deceit, that is, a passing off by a person of his own

goods as those of another, that is not the gist of an action for infringement....... No doubt, where the evidence in respect of passing off consists

merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a

colourable imitation of a trade mark in passing off action would be such in an action for infringement of the same trade mark.

In the case of Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd., : the Apex Court while over-ruling the law laid down by that Court in

the case of M/S S. M. Dyechem Ltd. Vs. M/S Cadbury (India) Ltd., : observed - ""As far as this Court is concerned, the decisions in the last four

decades have clearly laid down that what has to be seen in the case of a passing off action is the similarity between the competing marks and to

determine as to whether there is likelihood of deception or causing confusion"".

In this case, there can by no doubt whatsoever that the mark used by the defendants is a mere copy of the plaintiffs mark. The mere addition of

the name of the defendants as manufacturer or stockists, does not in the least make a difference to the average purchaser, who looks at the mark

''Pony'' and label and would assume that the sewing threads sold by the defendants emanates from the same source as the needles manufactured

by the plaintiff, needles and threads being related goods sold across the same counter. The confusion or deception in the case is not merely likely,

but almost certain, having regard to the manner in which the mark and the label had been copied by the defendants.

The defendants have offered no explanation whatsoever for the adoption of this mark. It is not a mark invented by the defendants. It is evident

that the second defendant having been the dealer of the plaintiff, being familiar with the mark and being well aware of the enormous goodwill

attached to that mark, had sought to ride piggyback on the good will at the cost of the plaintiff. The defendants'' conduct is not one which can be

regarded as bona fide. The adoption of that trade mark by the defendants was deliberately and consciously done with a view to profit from the

goodwill earned by the plaintiff for the mark and label. The fact that the mark has been registered in favour of the first defendant for sewing threads

recently does not make any difference, as registration of the mark in a different class is not by itself a complete defence in an action for passing off.

While such registration may be permissible, . the registration does not confer immunity against an action for passing off.

As regards acquiescence, it cannot be said that the plaintiff here is guilty of acquiescence and has disabled itself by not asserting it''s right. The

defendants have placed no material to show that it has expended monies on advertisements and has built goodwill or it''s own for the mark. The

plaintiff has stated that it came to know of the defendants'' use of the mark only when it saw the journal in which the application of the defendant

had been advertised. There is no reason to disbelieve that assertion of the plaintiff, in the absence of any material placed by the defendants to show

that it had advertised it''s product or had done any marketing on such a scale as to warrant an inference that the plaintiff would have been aware of

the use of this mark for the defendants'' goods, but had deliberately chosen not to proceed against the defendants.

Moreover, as pointed by the Apex Court in the case of Power Control Appliances v. Sumeet Machines Pvt. Ltd. 1994 (2) SCC 44 mere

delay in initiating action does not on that score alone disentitle the owner of the mark from seeking an injunction on the ground of passing off. The

plaintiff here is not guilty of such conduct as would disentitle it from asserting a right which it otherwise had established.

The order under appeal therefore cannot be sustained and is set aside. There shall be an injunction against the defendants restraining them, their

servants, agents, representatives, etc. from using the mark ''Pony'' and/or ''Pony'' label in relation to sewing threads manufactured/marketed by

them.