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IN THE HIGH COURT AT CALCUTTA
I.P. MUKERJI, BISWAROOP CHOWDHURY, JJ.
Poulami Mukherjee – Appellant
Versus
Duckbill Drugs Pvt. Ltd. & Ors. – Respondent
FMAT 9 of 2023 With CAN 1 of 2023 CAN 2 of 2023
Decided on : 23-06-2023
TRADEMARK - ASSIGNMENT - VALIDITY - INFRINGEMENT - PRIMA FACIE EVIDENCE - SECTION 42 OF THE TRADE MARKS ACT, 1999 - ASSIGNMENT OF TRADEMARKS BY FATHER-IN-LAW TO DAUGHTER-IN-LAW FOR A NOMINAL CONSIDERATION - BACKDATED DEED OF ASSIGNMENT - ASSIGNMENT REGISTERED AFTER FIVE YEARS - HELD, ASSIGNMENT INVALID AND NULL AND VOID - INJUNCTION AGAINST INFRINGEMENT VACATED.
Fact of the Case:
Duckbill Drugs Pvt. Ltd. (Duckbill), a pharmaceutical company, faced insolvency proceedings and was ordered to be liquidated. During the liquidation process, the Liquidator proposed to sell the company's assets, including seven valuable trademarks, as a going concern. Paul Brothers, a partnership firm, emerged as the successful bidder at an e-auction held on May 9, 2022, and acquired the trademarks. However, a dispute arose when Poulami Mukherjee (Poulami), the daughter-in-law of Duckbill's former director, claimed ownership of the seven trademarks based on a deed of assignment allegedly executed in her favor by Duckbill on April 3, 2017, for a consideration of Rs. 7,000/-. Poulami filed a suit against Duckbill for infringement of her trademark rights and obtained an interim injunction restraining Duckbill from using the marks. Duckbill challenged the injunction, arguing that the assignment was fraudulent and backdated to avoid scrutiny under the Insolvency and Bankruptcy Code, 2016.
Finding of the Court:
The court found that the deed of assignment was prima facie invalid and a nullity. The court observed several suspicious circumstances surrounding the assignment, including the backdating of the deed, the assignment of only seven out of fourteen trademarks when all were valid on the alleged date of execution, the nominal consideration of Rs. 7,000/- for valuable trademarks, and the delay in filing the application for recording the assignment with the Registrar of Trademarks. The court also noted that the assignment was executed by Poulami's father-in-law, who was Duckbill's former director, without the concurrence of the Liquidator, who was the custodian of the company's assets. The court concluded that the assignment was an attempt to divest Duckbill of its valuable assets and misappropriate them.
Issues: 1. Whether the deed of assignment of the seven trademarks from Duckbill to Poulami was valid and genuine. 2. Whether the assignment was backdated to avoid scrutiny under the Insolvency and Bankruptcy Code, 2016. 3. Whether Poulami had a valid claim to the trademarks and was entitled to an injunction against Duckbill for infringement.
Ratio Decidendi: 1. The court held that the deed of assignment was prima facie invalid and a nullity due to several suspicious circumstances, including the backdating of the deed, the assignment of only seven out of fourteen trademarks when all were valid on the alleged date of execution, the nominal consideration of Rs. 7,000/- for valuable trademarks, and the delay in filing the application for recording the assignment with the Registrar of Trademarks. 2. The court found that the assignment was executed by Poulami's father-in-law, who was Duckbill's former director, without the concurrence of the Liquidator, who was the custodian of the company's assets. The court concluded that the assignment was an attempt to divest Duckbill of its valuable assets and misappropriate them. 3. The court held that Poulami did not have a valid claim to the trademarks and was not entitled to an injunction against Duckbill for infringement.
Final Decision: The court dismissed the appeal filed by Poulami and vacated the interim injunction granted earlier. The impugned judgment and order of the lower court was affirmed with the substitution of the reasons given by the court in its judgment. The suit was directed to be expedited and disposed of within two years of communication of the order.
JUDGMENT :
I. P. Mukerji, J.
SHORT BACKGROUND
I will refer to the parties by their names. It would be more convenient in that way to deal with this case.
2. An interim judgment and order dated 12th December, 2022 was passed by the learned Court below in an interlocutory application in a suit filed by Poulami Mukherjee against Duckbill Drugs Pvt. Ltd. (Duckbill) alleging infringement of seven trademarks over which she had proprietary rights acquired through a deed of assignment executed in her favour by Duckbill, the registered owner of those marks. The learned court refused to grant an order of injunction restraining Duckbill from using the marks.
3. In those circumstances, the present appeal was filed in this court by Poulami.
4. On 24th January, 2023 the appeal and the connected application for injunction (FMAT 9 of 2023 with CAN 1 of 2023 & CAN 2 of 2023) came up before this court for admission and consideration of an interim order.
5. An affidavit of service was filed. We recorded in our order passed on that day that apart from the second respondent Swapan Kumar Mukherjee, an ex-director of Duckbill and father-in-law of Poulami, no other respondent was represented in court.
6. Upon scrutiny of the impugned judgment and order we found that although the learned Judge had found prima facie infringement of those trademarks by Duckbill yet he refused to pass any order of injunction.
7. At the admission stage, without the assistance of the entire papers and detailed submissions, our notion was that under well settled principles of intellectual property law, if infringement was prima facie established, then an order of injunction necessarily followed. Considering that the point involved was very short, we disposed of the appeal by setting aside the judgment and order appealed against. We granted an order of injunction restraining Duckbill from using the marks. The interim order would be valid till 31st March, 2023 with power vested in the learned judge to extend it if hearing of the application could not be completed by that time.
8. Immediately, thereafter, on or about 28th January, 2023 Duckbill made an application for setting aside our order dated 24th January, 2023 and for reinstatement of the order of the learned Court below, on the ground that the ex parte order was obtained on 24th January, 2023 by misleading the court that inspite of service, Duckbill had not appeared.
SHORT FACTS
9. The facts of this case are most extraordinary. Very rarely does one come across a case of this kind where there is such a serious allegation of fraud, misrepresentation and suppression of facts and cheating.
10. Insolvency commencement date for Duckbill was 17th December, 2019, when NCLT commenced Corporate Insolvency Resolution Process (CIRP) against them. The order of liquidation of Duckbill was passed by the tribunal on 13th April, 2021.
11. The Liquidator proposed to sell the assets of the company as a going concern. The most valuable assets of the company were seven out of its fourteen trademarks i.e. i) Laxit ii) Laxit Laxative Oral Emulsion (label) iii) Healzyme iv) Catalyd v) Laxit plus label vi) Brofentol plus label vii) Cyaptin with calcium (label). There was some lease hold interest of the company as well which according to Duckbill was of insignificant value, as the lease had expired. On 29th June, 2021 the Liquidator had asked the trademarks registry to maintain status quo of the seven trademarks. The assets which were handed over by Swapan Kumar Mukherjee to the Liquidator on 12th February, 2022 were to be sold by e-auction as stated in the Liquidator’s notice of sale dated 23rd April, 2022. The liquidator fixed a reserve price of rupees five crores for this sale. On 9th May, 2022 he held an auction for this purpose under Section 35 (1)(f) of the Insolvency and Bankruptcy Code. On 11th May, 2022 they were sold in favour of Paul Brothers, a partnership firm having its office at 7, Kali Prasanna Chatterjee Lane, Kolkata – 700034 who were to run
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