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High Court Of Delhi
SIDHARTH WHILS PRIVATE LIMITED - Appellant
Versus
BEDROCK LIMITED - Respondent
Interim Application 6588 of 1986
Decided On : 10/16/1987
TRADE AND MERCHANDISE MARKS ACT, 1958 - SECTION 120 - THREATS OF INFRINGEMENT - INTERPRETATION - SCOPE AND APPLICABILITY - ACTION FOR INFRINGEMENT - NATURE AND PURPOSE - INTERIM ORDER - GRANT OR REFUSAL - FACTORS TO BE CONSIDERED.
Fact of the Case:
Plaintiff, a private limited company, was permitted to use the defendant's trademark under an agreement. The agreement was terminated by the defendant and the plaintiff was informed that any further use of the trademark would amount to infringement. The plaintiff filed a suit for a declaration that the threats of infringement were unjustified and for an injunction against the defendant. The defendant contended that the suit was not maintainable in view of a subsequent suit filed by them in the Bombay High Court for a declaration that the plaintiff had no right to use the trademark.
Finding of the Court:
The court held that the threats of infringement were actionable under Section 120 of the Trade and Merchandise Marks Act, 1958. The court further held that the subsequent suit filed by the defendant in the Bombay High Court was not an action for infringement of the trademark as envisaged by Section 120(2) of the Act and, therefore, did not exclude the applicability of Section 120(1) to the present suit. The court also held that the interim order granted earlier restraining the defendant from giving out any threats to the plaintiff should be vacated in view of the subsequent events, particularly the alleged termination of the agreement affecting permitted use of the trademark by the plaintiff, which were subject matter of the suit for declaration and injunction presently pending in the Bombay High Court.
Issues: 1. Whether the threats of infringement were actionable under Section 120 of the Trade and Merchandise Marks Act, 1958? 2. Whether the subsequent suit filed by the defendant in the Bombay High Court was an action for infringement of the trademark as envisaged by Section 120(2) of the Act? 3. Whether the interim order granted earlier restraining the defendant from giving out any threats to the plaintiff should be vacated?
Ratio Decidendi: 1. The court held that the threats of infringement were actionable under Section 120 of the Trade and Merchandise Marks Act, 1958, as they were clear and were expressed in unmistakable words. The court further held that the cause of action envisaged by Section 120 is not similar to libel and that threats need not be published to be actionable under that provision. 2. The court held that the subsequent suit filed by the defendant in the Bombay High Court was not an action for infringement of the trademark as envisaged by Section 120(2) of the Act, as it did not relate to the acts in respect of which proceedings were threatened by the defendant's letter dated 15th November, 1987. 3. The court held that the interim order granted earlier restraining the defendant from giving out any threats to the plaintiff should be vacated in view of the subsequent events, particularly the alleged termination of the agreement affecting permitted use of the trademark by the plaintiff, which were subject matter of the suit for declaration and injunction presently pending in the Bombay High Court.
Final Decision: The court disposed of the application and held that the present suit would continue notwithstanding the Bombay suit. The court also held that it was proper to leave the parties to seek suitable orders or directions for protection or enforcement of their respective rights and remedies regarding the trademark, during pendency of Suit No. 539 of 1987 from the Bombay High Court.
( 1 ) IN this Application in a suit under sub-section (1) of S. 120 of the Trade and Merchandise Marks Act, 1958, hereinafter referred to as the Act , a question has arisen whether the suit can be continued in spite of the Defendants commencing and prosecuting an action for declaration and injunction against the Plaintiff herein in the Bombay High Court, and, if this suit survives, the nature of interim order to be made in it.
( 2 ) THE Plaintiff is a Private Limited Company (hereinafter referred to as Sidharth ). Defendant No. 1 (hereinafter referred to as Bedrock) was the registered proprietor of trade mark No. 314132 Bedrock in class 12 in respect of cycle tubes (hereinafter referred to as the Trade Mark ). Bedrock permitted Sidharth to use the Trade Mark by an agreement dated 19th of July 1985 (hereinafter referred to as the agreement ). The agreement was made without any limit on its period, but subject to a termination clause No. 9 which provided, inter alia, for the agreement to be terminated by either party by giving three months written notice in that behalf to the other. After execution of the agreement, Sidharth started using the Trade Mark. Sidharth and Bedrock jointly filed an application in prescribed form TM 28 to register Sidharth as "registered user" of the Trade Mark.
( 3 ) LATER, Sidharth was informed that Bedrock assigned all its rights, title and interest in the Trade Mark together with goodwill to the second Defendant (hereinafter referred to as poddar ). Negotiations started between Sidharth and Poddar for entering into a fresh agreement for use of the Trade Mark. While negotiations were going on, Poddar sent a letter dated 15th of November 1986 to Sidharth, referring to previous correspondence between then, alleging that Sidharth had not sent the proposed agreement and other papers and therefore, poddar took it that Sidharth was not interested in it, and stated ". . . . . . We withdraw our offer of registered usership to you" It was further stated :
"it has come to our knowledge that you are selling cycle tubes under our said Trade Mark in the market directly to the dealers which in the absence of your being appointed registered User, of the said Trade Mark would amount to the infringement of the said Trade Mark for which a Suit would lie against you under Section 29 (1) of the Trade and Merchandise Marks Act. "
( 4 ) ON the basis of letter dated 15th November 1986, Sidharth filed the present suit praying, inter alia. for :
(A) A declaration- to the effect that the threats given by the Defendants vide their letter dated 15th November 1986 are unjustified and mala fide; (b) An injunction against the Defendants not to repeat and continue with the threats against the Plaintiffs and their dealers;
( 5 ) IN the suit, Sidharth alleged that there was no valid assignment of the Trade Mark by Bedrock in favour of Poddar; that even if there was any assignment it was subject to rights of Sidharth under the agreement, which was still subsisting; and that threat by Poddar s letter dated 15th November 1986 was unjustified. Sidharth reserved its right to claim damages by filing a separate suit as the same could not be estimated at the time of filing of the present suit.
( 6 ) BEDROCK and Poddar filed a common written statement. It was alleged that Bedrock informed Sidharth of Assignment of its rights title and interest in the Trade Mark to Poddar that in view of the said assignment, the permitted user agreement had come to an end but Poddar was willing to enter into new agreement with Sidharth; that the parties discussed the matter and came to a conclusion that the agreement had to be formal cancelled in order to enable a fresh agreement to be entered into between Sidharth and Poddar, on the basis of altered terms of royalty; and, that a draft of a letter giving three months notice of termination of the earlier agreement was also handed over to Sidharth. Further, it was alleged that pursuant to th
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