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2014 Supreme(Bom) 1222
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. GUPTE, J.
Neel Electro Techniques & Ors. - Applicants / Plaintiffs
Versus
Neelkanth Power Solution & Anr. - Defendants
NOTICE OF MOTION NO. 54 OF 2012 IN SUIT NO. 55 OF 2012
Decided On : 24 JUNE 2014
Dr.Virendra Tulzapurkar, Senior Advocate with Mr.Amit Jamsandekar and
Ms.Sachi Lodha i/b M/s.Kanga & Co. for Plaintiffs.
Mr.Ravi Kadam with Dr.Birendra Saraf i/b. Mr.B.B.Parekh for Defendant No.1.
Mr.Soli Cooper, Senior Advocate with Mr.Parag Shah i/b. M/s.Mahesh Shah & Co. for Defendant No.2.
The main legal point established in the judgment is the consideration of the defense of common law license and acquiescence by the registered proprietor, and the consequences of such license or acquiescence in an action for infringement or passing off.
Headnote:
Neel - Trademark Infringement - Arbitration and Conciliation Act, 1996, Section 9 and Section 11 - Section 24 of the Trade Marks Act, 1999 - M/s Power Control Appliances Vs. Sumeet Machines Pvt. Ltd. (1994) 2 SCC 448, Addanki Narayanappa Vs. Bhaskara Krishnappa AIR 1966 SCC 1300 (V 53 C 251), Controller of Estate Duty Vs. Mrudula Nareshchandra 1986 (Supp) SCC 357, M/s Shivraj Fine Art Litho Works Vs. Purushottam AIR 1993 BOMBAY 30, Kishore Thakkar Vs. ADF Foods Ltd. Notice of Motion No.1829/2005 in Suit No.994/2005 decided on 12 July 2005, and Rajnikant Hasmukhlal Colwala Vs. Natraj Theatre AIR 2000 GUJARAT 80 - The court discussed the infringement and passing off suit, the authority of the Defendants to use the trademark, and the principles of partnership law and trade marks. The court ruled out the individual use of the trademark by the partners and considered the family arrangement and mutual consent for the use of the mark. The court also considered the defense of common law license and acquiescence by the registered proprietor, and the consequences of such license or acquiescence in an action for infringement or passing off.
Fact of the Case:
The suit is an infringement and passing off suit. Plaintiff No. 2 is the registered proprietor of the mark “Neel” and uses it as part of the trading name and also markets products under that trade mark. Plaintiff Nos. 7, 8 and 9 are associated firms/companies, majority shares in which are held by the group of Plaintiff No. 3, and use the trade name and mark “Neel” by way of a permitted user. Defendant No. 1 is a partnership firm of which Defendant No. 2 (wife of Hemant Mehta) and the said Hemant Mehta are the partners. It is the case of the Plaintiffs that Defendant No. 1 is infringing the Plaintiffs' mark “Neel” and passing off its goods as those of the Plaintiffs.
Finding of the Court:
The court found that the Plaintiffs are not entitled to the interim injunction claimed. The court dismissed the Notice of Motion with no order as to costs.
Issues: The issues involved the authority of the Defendants to use the trademark, the defense of common law license and acquiescence by the registered proprietor, and the consequences of such license or acquiescence in an action for infringement or passing off.
Ratio Decidendi: The court ruled out the individual use of the trademark by the partners and considered the family arrangement and mutual consent for the use of the mark. The court also considered the defense of common law license and acquiescence by the registered proprietor, and the consequences of such license or acquiescence in an action for infringement or passing off.
Final Decision: The court found that the Plaintiffs are not entitled to the interim injunction claimed. The court dismissed the Notice of Motion with no order as to costs.
This Notice of Motion, which is tagged with Notice of Motion No.294 of 2013 in Suit No.2574/2012 and Arbitration Petition Nos. 1260 of 2013 and 1347 of 2012, both under Section 9 of the Arbitration and Conciliation Act, 1996 and Arbitration Petition No.148 of 2013 under Section 11 of that Act, seeks a temporary injunction against the Defendants from in any manner using, directly or indirectly, the mark “Neel” or “Neelkanth” or any other mark, domain name, device, logo, label etc. which is similar/deceptively similar to the registered mark of the Plaintiffs, namely, “Neel”. Learned Counsel for the parties chose to argue this Notice of Motion separately from the other matters, and hence, the same is being disposed of separately by this order. The suit is an infringement and passing off suit. The facts of the case may be briefly stated thus:
2. Plaintiff Nos. 1 and 2 are partnership firms carrying on business of manufacturing, marketing and selling Voltage Stabilizers and Isolation Transformers. The partnerships belong to two brothers and their family members – Ravindra Gamanlal Mehta (Plaintiff No. 3) and Hemant Gamanlal Mehta. Plaintiff No. 3, and Plaintiff No. 5 (son of Plaintiff No. 3) and the said Hemant Mehta are partners of Plaintiff No. 1, Plaintiff Nos. 3 and 5 between them having 60% share in the partnership and the said Hemant Mehta holding the balance 40% share. Plaintiff Nos. 3 and 4 (wife of Plaintiff No.3) and the said Hemant Mehta are partners of Plaintiff No. 2 holding between them 60% (Plaintiff Nos. 3 and 4) and 40% shares (Hemant Mehta). Plaintiff No. 2 is the registered proprietor of the mark “Neel” and uses it as part of the trading name and also markets products under that trade mark. Plaintiff Nos. 7, 8 and 9 are associated firms/companies, majority shares in which are held by the group of Plaintiff No. 3, and use the trade name and mark “Neel” by way of a permitted user. It is the case of the Plaintiffs that from April 2011, Plaintiff Nos. 8 and 9 have stopped using the mark “Neel”, though it continues to be a part of their trading name. Defendant No. 1 is a partnership firm of which Defendant No. 2 (wife of Hemant Mehta) and the said Hemant Mehta are the partners.
3. It is the case of the Plaintiffs that Defendant No. 1 is infringing the Plaintiffs' mark “Neel” and passing off its goods as those of the Plaintiffs. The Plaintiffs rely upon the registration of the mark “Neel”, their list of products, their sales including exports sales, customers list, turnover, sales network, list of distributors etc. to prove the registration as well as extensive reputation acquired by the mark “Neel” in the market. The Plaintiffs also rely upon the Defendants' brochure to show that the Defendants are using the mark “Neel” as part of their trading name and also to market their goods which are similar to the Plaintiffs' goods. The Plaintiffs submit that there is not only infringement of the mark “Neel” thereby but that by claiming a common origin and connection with the Plaintiff firms the Defendants are actually passing off their goods as goods of the Plaintiffs and trading upon the goodwill and reputation of the Plaintiffs.
4. The Defendants resist the interim application by contending that the said Hemant Mehta, being a partner of Plaintiff No. 2 (the registered proprietor of the mark), in entitled to use the mark “Neel”; that even otherwise as per the agreement between partners/family members which is inter alia reflected in a family arrangement, Defendants were entitled to use the mark “Neel”; that the use by the Defendants of the mark as part of the trading name and as a trade mark was with full knowledge and acquiescence of the Plaintiffs and the Plaintiffs are estopped from objecting to such use; that the application for interim reliefs suffers from delay and laches; and that the Plaintiffs have suppressed facts and have come to the court with unclean hands disentitling them to any equitable relief.
