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High Court Of Delhi
KALA NIKETAN - Appellant
Versus
KALA NIKETAN - Respondent
Suit 607 of 1978
Decided On : 09/11/1981
TRADEMARK - PASSING OFF - INFRINGEMENT - DISTINGUISHABILITY - DESCRIPTIVE WORDS - COMMON USAGE - INJUNCTION - ACCOUNTING - REMEDIES - TRADE NAME - UNFAIR COMPETITION - USER - VALIDITY.
Fact of the Case:
Plaintiff, operating under the trade name "Kala Niketan" since 1957, sought to restrain the defendant from using the same name for its saree business, alleging passing off and infringement of goodwill. The defendant contended that "Kala Niketan" was descriptive and commonly used in the trade, and thus not protectable.
Finding of the Court:
The court held that the plaintiff had acquired distinctiveness in the trade name "Kala Niketan" through long user, advertising, and reputation. The court found that the defendant's use of the same name was likely to cause confusion and deceive customers, and that the words "Kala Niketan" were not descriptive of sarees. The court also held that the defendant's use of the address "South Extension" was insufficient to distinguish its business from the plaintiff's.
Issues: 1. Whether the defendant is entitled to trade under the name "Kala Niketan"? 2. Whether the plaintiff is entitled to the grant of the reliefs claimed? 3. Whether the trade name "Kala Niketan" is descriptive and common to the trade?
Ratio Decidendi: 1. A trade name becomes distinctive when it is associated with a particular source of goods or services through long user, advertising, and reputation. 2. The use of a trade name by another trader is actionable if it is likely to cause confusion or deceive customers. 3. Descriptive words or phrases cannot be monopolized as trade names.
Final Decision: The court granted a permanent injunction restraining the defendant from using the trade name "Kala Niketan" or any other identical or deceptively similar name. The court dismissed the plaintiff's claim for an accounting of profits and destruction of dies and labels.
( 1 ) IN this suit the plaingtiff, who carries of business as kala Niketan , seeks a decree for permanent injury tion restraining the defendant, its servants, agensts, representatives and dealers from directly or indirectly, dealing in Sarees and other textile goods as kala Niketan or any other identical or deceptively similar trade name; an order for destruction of dies, blocks, transfer labels and any other material bearing the impugned trade name and for rendition of accounts.
( 2 ) ACCORDING to the allegations in the plaint, the business of selling Sarees as kala Niketan was started by Shrimati Momi Devi at 2343/2, Ajmal Khan Road, Karol Bagh, New Delhi, on April 7, 1957. In April 1958, she took her two sons, Shambhoo Nath Khanna and Krishan Lal Khanna, in partnership with her in the said business. Shambhoo Nath Khanna retired from the firm with effect from June 15, 1966. Shrimati Momi Devi also retired with effect from 1, 1972 after assigning her share and interests in the partnership business, goodwill, stocks etc. in favour of remaining partner, Krishan Lal Khanna, who was carrying on the said business as its sole proprietor since then. The trade name kala Niketan , it is Stated, had acquired a valuable goodwill and reputation amongst the trade and public because of its long and extensive user since 1957. The annual sale from April 7. 1957 to March 31, 1958 was of Rs. 2,49,410. 53. In the financial year 1975-76 it was increased to Rs. 11,06,840. 70 and in the year 1976-77 the annual sale was of Rs. 10. 26,420. 45. The plaintiff had given wide publicity to its trade name through newspapers, radio, boardings and other media and the name is stated to have become popular amongst the public and the trade. The defendant being aware of the rights and interests of the plaintiff in this trade name, with mala fide and illegal design, adopted the same trade and started business in Sarees with a view to earn illegal profits on the reputation and goodwill of the plaintiff-firm. The defendant was passing off and causing confusion in the trade and public that he was in any way connected with the plaintiff-firm. The Sarees were purchased by ladies and they were bound to be confused on account of the deceptive similarity between the two trade names. The defendants had no right or interest to use and to pass off the plaintiff s trade name or its business. Defendants by this act had put the plaintiff to a great loss. The defendant-firm was served with a notice in December 1977 to stop user of the said passing off, but they did not stop the passing off of the trade name kala Niketan in spite of assurances. On the other hand, they with mala fide intention published a caution notice in the Indian Express, dated May 13, 1978 claiming that defendant firm was the proprietor of the name kala Niketan in respect of trade of all kinds of Sarees and textiles etc.
( 3 ) THE suit was resisted by the defendant-firm. It was pleaded that the defendant adopted its trading style, namely, kala Niketan in the year 1975 and had been using the same bona fide continuously without any reference to the plaintiff s trading style. The words kala Niketan , it was alleged, were wholly descriptive in the trade of Sarees and there were a number of traders and dealers in Sarees using the said trading style and the defendant was saved under the provisions contained in section 34 of the Trade and Merchandise Marks Act, 1958. It was also alleged that there was no question of any confusion because the defendant s shop was situated in a different market at a considerable distance. All other allegations were denied. The following issues have been settled :
1. Whether the defendant is not entitled to trade under the name Kala Niketan ?
2. If issue No. I is found in favour of the plaintiff, is he not entitled to the grant of the reliefs claimed?
3. Whether the trade name Kala Niketan is descriptive and common to the trade ?
4. Relief. Issues 1 to 3 :
( 4
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