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High Court Of Delhi
BIMAL GOVINDJI SHAH TRADING AS ACME INDUSTRIES - Appellant
Versus
PANNA LAL CHANDU LAL - Respondent
Interim Application 6641 of 1996
Decided On : 04/24/1997
TRADEMARK - PASSING OFF - REGISTRATION - PRIOR USER - INJUNCTION - DELAY - LIMITATION: 1. Registration of a trademark under the Trade and Merchandise Marks Act, 1958 does not confer an absolute right to the registered proprietor. It is subject to other provisions of the Act, including Section 27(2), which preserves the rights of action against passing off and the remedies in respect thereof. 2. A prior user of a trademark can maintain an action for passing off against a subsequent user, including a registered user, and can seek an injunction to restrain the use of the mark. 3. In an action for passing off, the criteria for granting an injunction is the prior user of the trademark by the parties. Registration of the mark is irrelevant. 4. Delay in filing a suit for passing off may be a factor to consider, but it does not necessarily bar the action. Fresh cause of action accrues at every moment of time during which the breach is committed, giving rise to a continuous and recurring cause of action.
Fact of the Case:
The plaintiff, M/s. Acme Industries, filed a suit against the defendant, alleging passing off of its trademark FLORA, which was registered by the defendant in 1987. The plaintiff claimed prior use of the trademark since 1979 and sought an injunction to restrain the defendant from using the mark. The defendant contended that the plaintiff's trademark was not registered and that the suit was barred by delay and laches.
Finding of the Court:
The court held that the registration of the trademark FLORA in favor of the defendant did not give it an absolute right to use the mark. The court relied on Section 27(2) of the Trade and Merchandise Marks Act, which preserves the rights of action against passing off and the remedies in respect thereof. The court also held that the plaintiff, as a prior user of the trademark, could maintain an action for passing off against the defendant, even though the defendant was a registered user. The court further held that the delay in filing the suit was not a bar to the action, as fresh cause of action accrued at every moment of time during which the breach was committed.
Issues: 1. Whether the plaintiff, as an unregistered proprietor of the trademark FLORA, could maintain an action for passing off against the defendant, who was the registered proprietor of the mark? 2. Whether the plaintiff's suit was barred by delay and laches? 3. Whether the plaintiff was entitled to an injunction to restrain the defendant from using the trademark FLORA?
Ratio Decidendi: 1. The court held that the registration of a trademark under the Trade and Merchandise Marks Act does not confer an absolute right to the registered proprietor. It is subject to other provisions of the Act, including Section 27(2), which preserves the rights of action against passing off and the remedies in respect thereof. 2. The court held that a prior user of a trademark can maintain an action for passing off against a subsequent user, including a registered user, and can seek an injunction to restrain the use of the mark. 3. The court held that delay in filing a suit for passing off may be a factor to consider, but it does not necessarily bar the action. Fresh cause of action accrues at every moment of time during which the breach is committed, giving rise to a continuous and recurring cause of action.
Final Decision: The court granted an injunction in favor of the plaintiff, restraining the defendant from using the trademark FLORA in respect of hardware goods. The court also dismissed the defendant's counterclaim.
( 1 ) THE plaintiff instituted the present suit praying for perpetual injunction against the defendant restraining passing off the trade mark of the plaintiff and also for damages and rendition of accounts. The plaintiff has been carrying on his business of manufacturing and marketing of hardware goods under the name and style of M/s. Acme Industries. It is stated that during the year 1979 the plaintiff bonafide and honestly adopted and conceived the trade mark FLORA in relation to his aforesaid goods. The plaintiff states that the said mark is being used by him since then openly, continuously, exclusively and extensively. In the same year the plaintiff also honestly devised the label/wrapper/ carton entitled FLORA in a attractive lettering style to which the plaintiff is the first adopter, originator and author. It is stated that on account of continuous, regular and extensive use of the said trade mark FLORA in relation to hardware goods of the plaintiff the said trade mark has come tobe associated with the name of the plaintiff. The plaintiff has also applied for the registration of the said trade mark FLORA in the Trade Marks Registry under the provisions of the Trade and Merchandise Marks Act, 1958, which application is pending. The petitioner has also made large scale publicity in respect of the aforesaid trade mark FLORA of the plaintiff in view of which the said trade mark has acquired secondary meaning coming to be exclusively identified and recognised with the plaintiff. It is stated that the plaintiff received a legal notice dated 10. 6. 1996 served upon him by the defendant through its Counsel, that the defendant is a registered proprietor and owner of the said trade mark FLORA in respect of hardwares on account of its adoption by it during the year 1987. By the aforesaid notice the plaintiff was asked to stop its user. In view of the aforesaid legal notice received from the defendant and also in view of the fact that the registration of the aforesaid trade mark has been obtained by the defendant behind the back of the plaintiff and through suppression of facts and also in view of the fact that the defendant has dishonestly and mala fide pirated the trade mark/label/wrapper with trade mark FLORA of the plaintiff the present suit has been instituted by the plaintiff.
( 2 ) IT has also been brought to the notice of this Court that the plaintiff has filed an application for rectification of the registration of the trade mark granted in favour of the defendant and the said application was filed on 21. 6. 1996 which is pending disposal. Alongwith the aforesaid suit the plaintiff also filed an application under Order 39 Rules 1 and 2, Civil Procedure Code which was registered as I. A. No. 6641/1996, seeking for temporary injunction restraining the defendants from using the aforesaid trade mark in relation to hardware goods during the pendency of the suit.
( 3 ) SUMMONS and notices of the suit as also of the injunction application having been issued, the defendant filed the written statement as also reply to the application under Order 39 Rules 1 and 2, CPC. The defendant also filed counter claim against the plaintiff in the present suit. Besides the defendant also filed an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure praying for a temporary injunction restraining the plaintiff from manufacturing, selling, offering for sale, and/or directly or indirectly dealing with hardware goods under the trade mark FLORA or any other trade mark identical with or deceptively similar to the trade mark FLORA of the defendant. The said application was registered as I. A. No. 8765/ 1996. Reply to the said application has also been filed by the plaintiff.
( 4 ) THE defendant s case as disclosed from the written statement and reply as also from the application filed under Order 39 Rules 1 and 2, Civil Procedure Code is that the defendant has been continuously using the trade mark FLORA since 29. 10.
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