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2007 Supreme(Del) 1584

IN THE HIGH COURT OF DELHI AT NEW DELHI
HONBLE MR. JUSTICE VIKRAMAJIT SEN HONBLE MR. JUSTICE S.L.BHAYANA
ATLAS CYCLES (HARYANA) LTD. ..... Appellant
versus
ATLAS PRODUCTS PVT. LTD. ..... Respondent
FAO(OS) 395/2002
Decided On : 06.08.2007

Advocates Appeared:
Mr. Sudhir Chandra, Sr. Adv., Mr. Rajeev Nayyar, Sr. Adv. with Mr. Sudhir Makkar & Ms. Meenakshi Singh, Advs.
Mr. C.A. Sundaram, Sr. Adv. with Ms. Ekta Kapil & Mr.Sandeep Mahapatra, Advs.

Headnote:

ATLAS CYCLES - TRADE MARK - INFRINGEMENT - PASSING OFF - CORPORATE NAME - INJUNCTION - DELAY AND ACQUIESCENCE - COMPANIES ACT, 1956, SECTIONS 20, 21, 22 - TRADE MARKS ACT, 1999, SECTIONS 29, 30 - STANDARDS OF WEIGHTS AND MEASURES ACT, 1976 - PREVENTION OF FOOD ADULTERATION ACT, 1954.

Fact of the Case:

The Plaintiff, a well-known manufacturer of cycles under the trade mark Atlas, filed a suit against the Defendants, who had commenced the manufacture of cycles under the trade mark House of Atlas and were also using the word Atlas in their corporate name. The Plaintiff alleged infringement of trade mark, passing off, and rendition of accounts of profit. The Trial Court granted an injunction restraining the Defendants from using the trade mark House of Atlas, but permitted them to use the word Atlas in their corporate name. The Plaintiff appealed against the refusal to grant an injunction in respect of the corporate name, while the Defendants did not challenge the injunction against the trade mark.

Finding of the Court:

The Court held that the Plaintiff was entitled to an injunction restraining the Defendants from using the word Atlas in their corporate name. The Court found that there was a likelihood of confusion or deception among consumers, as the Defendants' use of the word Atlas in their corporate name would lead them to believe that they were purchasing cycles from the Plaintiff. The Court also held that the Plaintiff had not acquiesced in the Defendants' use of the word Atlas, as the delay in filing the suit was not unreasonable and the Plaintiff had not taken any positive steps to encourage the Defendants to use the word Atlas.

Issues: 1. Whether the Plaintiff was entitled to an injunction restraining the Defendants from using the word Atlas in their corporate name? 2. Whether the Plaintiff had acquiesced in the Defendants' use of the word Atlas?

Ratio Decidendi: 1. The Court held that the Plaintiff was entitled to an injunction restraining the Defendants from using the word Atlas in their corporate name because: a) There was a likelihood of confusion or deception among consumers, as the Defendants' use of the word Atlas in their corporate name would lead them to believe that they were purchasing cycles from the Plaintiff. b) The Plaintiff had not acquiesced in the Defendants' use of the word Atlas, as the delay in filing the suit was not unreasonable and the Plaintiff had not taken any positive steps to encourage the Defendants to use the word Atlas. 2. The Court held that the Plaintiff had not acquiesced in the Defendants' use of the word Atlas because: a) The delay in filing the suit was not unreasonable, as the Plaintiff had filed the suit within a few months of learning about the Defendants' use of the word Atlas. b) The Plaintiff had not taken any positive steps to encourage the Defendants to use the word Atlas.

Final Decision: The Court allowed the Plaintiff's appeal and modified the impugned Order to the extent that the Defendants were restrained from using the word Atlas in their corporate/trade name in respect of bicycles and bicycle parts. The Court also dismissed the Defendants' appeal.

VIKRAMAJIT SEN, J

1. These two Appeals have been heard together as per the request of learned counsel for the parties. The Appellant is the Plaintiff; the Respondents in the Appeals are the Defendants in the Suit. FAO (OS) 395/2002 is directed against the decision of the Learned Single Judge in IA No. 4197/2002 in Suit No. 882/2002, passed on September 27, 2002. The operative part of the Order reads as follows:- “Consequently, I restrain the defendants from using the trade mark House of Atlas or any other mark which may be deceptively similar to the plaintiffs trade mark Atlas, in respect of bicycles and bicycle parts till the disposal of the suit. However, there will be no injunction in respect of its user as the corporate name of the first defendant.”

2. FAO(OS) 280/2003 assails the Orders dated May 30, 2003 passed by the learned Single Judge in IA No. 9431/2002 in Suit No. 882/2002, of which the operative part reads as follows:- “11. The public notices issued by the respondent do not in any way give an impression to the public at large or their dealers that Court has permitted them to use the word Atlas as their trade mark but it is a notice to the public that henceforth they will sell their goods under the trade mark Premier Gold manufactured by Atlas Products Pvt.Ltd, it being their corporate name. The public notice though do not carry that part of the order which was against the respondents, but it does not in any manner have any prejudicial effect on the plaintiff.

12. As the defendants have been permitted to use it as their corporate name and they are using the same as their corporate name only and not as a trade name no fresh orders are to the contrary required to be passed on this application, defendants being already under injunction from using the trade mark “Atlas” of course with the explicit permission to use it as their corporate name. The application is disposed of accordingly.”

3. Mr. Sudhir Chandra, learned Senior counsel appearing for the Plaintiffs has submitted that the trade mark “Atlas” has been registered in favour of the Plaintiff since 1952. The Plaintiff asserts that it has over a quarter of the market share in the sale of cycles in India. It is not in dispute that Defendant No.1, namely, Atlas Products Pvt. Ltd. was incorporated under the Companies Act in 1995. It is also not in dispute that Defendant No.1 had commenced the manufacture of cycles in February 2002. According to the Plaintiffs, immediately upon learning of this event, they filed Suit No. 882/2002 praying for a permanent injunction restraining infringement of trade mark, infringement of copyright, rendition of accounts of profit, delivery-up etc. Mr. Chandra submits that it is the Plaintiffs case that prior to 2002 the Defendant No.1 was not engaged in any cycle-related business and that being so, the Plaintiffs found no reason or cause to object to the use of the word “Atlas” in the corporate or trade name. It is only when the manufacture of cycles by the Defendant, under the trade mark “House of Atlas” commenced and was learnt of by the Plaintiffs in early 2002 that the compulsion to file the subject Suit had arisen. Mr.Chandra has further submitted that the learned Single Judge had erred in coming to the conclusion that the Plaintiff had acquiesced in the Defendants inclusion of “Atlas” in its corporate name. Even if some agreement had been reached between the three branches of the family, it could not be foisted on the Plaintiff which is a separate and distinct legal entity. He argues that the relevant date for reckoning whether there was any acquiescence and knowledge on the part of the Plaintiff is February 2002, the month in which manufacture of cycles was started by the Defendants and, therefore, inasmuch as the present Suit was filed in April 2002 it cannot possibly be held that there was any delay or acquiescence on the part of the Plaintiff. It is primarily on similar lines that Mr.Chandra has also contended that the learned S












































































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