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High Court Of Delhi
LLOYD INSULATIONS INDIA PRIVATE LIMITED - Appellant
Versus
PUNJ LLOYD INSULATIONS PRIVATE LIMITED - Respondent
Interim Application 986 of 1998
Decided On : 05/01/1999
TRADEMARK - PASSING OFF - INJUNCTION - SIMILARITY OF TRADE NAMES - DESCRIPTIVE WORDS - SECONDARY MEANING - CONFUSION - BALANCE OF CONVENIENCE - FRAUD - COMMON LAW REMEDY - TRADE AND MERCHANDISE MARKS ACT, 1958.
Fact of the Case:
The plaintiff, a company dealing in insulation and other services, sought an injunction to restrain the defendant, a newly incorporated company, from using a trade name similar to the plaintiff's. The plaintiff alleged that the defendant's trade name was deceptively similar to its own and would cause confusion among customers, leading to passing off. The defendant contended that the word "insulation" was a generic term and that it had a right to use its own name, which included the word "insulation."
Finding of the Court:
The court held that the plaintiff had not made out a prima facie case for the grant of an injunction. It found that the defendant's trade name was not deceptively similar to the plaintiff's, and that there was no likelihood of confusion among customers. The court also found that the word "insulation" was a descriptive word and that the plaintiff had not shown that it had acquired a secondary meaning. Further, the court held that the balance of convenience was in favor of the defendant, as an injunction would cause it irreparable harm, while the plaintiff would only suffer a delay in obtaining relief.
Issues: 1. Whether the defendant's trade name was deceptively similar to the plaintiff's, causing confusion among customers and leading to passing off. 2. Whether the word "insulation" was a generic term that the defendant had a right to use. 3. Whether the plaintiff had shown that the word "insulation" had acquired a secondary meaning. 4. Whether the balance of convenience favored the plaintiff or the defendant.
Ratio Decidendi: 1. In an action for passing off, the plaintiff must show that there is a close resemblance between the two trade names and that it would create confusion, leading to deception and misleading of customers. 2. A descriptive word cannot be exclusively appropriated by one trader, unless it has acquired a secondary meaning and lost its primary meaning. 3. The onus is on the plaintiff to show that a descriptive word has acquired a secondary meaning. 4. In considering whether to grant an injunction, the court must weigh the balance of convenience between the parties.
Final Decision: The court dismissed the plaintiff's application for an injunction, holding that the plaintiff had not made out a prima facie case for the grant of an injunction.
( 1 ) WHAT s in a name? That which we call a rose By any other name would smell as sweet; (Shakespeare Romeo and Juliet II, 2 ). However, the above piece of advice tendered to the people in general by the Bard of Avon appears to have fallen flat on the deaf ears of the parties to the present suit, as they have chosen to ignore the same and preferred to fight over a trade name like kilkenny cats as is manifest from the facts of the present case.
( 2 ) THE plaintiff are a company incorporated under the Companies Act, 1956. They from the very inception have been dealing in insulation besides other services. They are a pioneer in the insulation industry. They are the first to develop mineral wool insulation. They have also developed ceramic fibre and foam insulations. They also provide insulation audit services and have been retained by large industrial undertakings, including TISCO, Indian Oil Corporation, NTPC, Hindustan Petroleum Corporation Ltd. , Cochin Refinery etc. Insulation business involves high technical expertise and requires enormous amount of experience. The plaintiff have an impeccable track record of having handled orders worth crores of rupees with complete efficiency. The name lloyd Insulations (India) is the trade mark/name of the plaintiff from the very beginning and has remained so till to this date. Thus the use of a similar mark or name is bound to create confusion and would result in passing offsuch other business as that of the plaintiff and would tarnish the image of the plaintiff. Any unfair use of the said mark would amount to unfair competition and dilution.
( 3 ) THE plaintiff have recently found that there is another company by the name Punj Lloyd Insulations Pvt. Ltd. On enquiries they came to know that Punj Lloyd Insulations was the new name of yet another company by the name of Sagit Properties Pvt. Ltd. as is manifest from the Certificate of Incorporation dated November 13,1997. The defendant adopted the said trade name without authorisation or licence from the plaintiff. The object of the said company is to deal in insulation and any other insulation products. It is manifest from above that the business of the newly incorporated company is similar to that of the plaintiff. The intention of the defendant is mala fide. The defendant want to encash upon the reputation and good will of the plaintiff in their established business and to thrive upon and to make use of the said repuation and goodwill. The shareholders of the defendant are Mrs. Naveena Punj and her husband Atui Punj. The promoters of the defendant as well as the shareholders of the plaintiff have been parties to the two awards dated August6,1987 and November 15,1989. The said awards have been made Rule of the Court. There is an appeal pending against the second award. As per the provisions of the said two awards none of the parties was permitted to deal in the competing business for a period of two years or till such time the award dated November 15,1989 was implemented. It has further been made clear in the said awards that the trade mark of the respective businesses which fell to their shares will be the property of the respective companies. Thus no company can be incorporated with anidentical or similar tradename. The shareholders of the defendant company are the signatories to the above awards. Hence they were bound to honour their commitment. They are thus acting in a mala fide manner by incorporating the defendant company.
( 4 ) THE defendant have not only entered into insulation business but have also adopted a trade name which is identical to the plaintiff s name. The business of the plaintiff requires a very high level of expertise and technical competence. If any new company such as the defendant have an identical or similar name it is bound to cause confusion amongst the customers and thus would lead to irreparable damage to the reputation of the plaintiff because of the lack of expertise and technical comp
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