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2011 Supreme(Del) 419
IN THE HIGH COURT OF DELHI AT NEW DELHI
J.R. MIDHA, J.
M/S KRIZM HOTELS PRIVATE LIMITED - Plaintiff
versus
M/S VAISHNAVI ESTATES(P) LTD - Defendant
CS(OS) 2338/2009
Decided On : 30th May, 2011
Advocate Appeared:
Mr. R.K. Aggarwal, Adv.
Mr. S.K. Bansal, Adv.
The main legal point established in the judgment is the strong protection of registered trademarks under the Trade Marks Act, 1999, and the imposition of realistic costs on wrongdoers to discourage frivolous litigation.
Headnote:
Trademark Infringement - Lemon Tree - Trade Marks Act, 1999 - Section 29(2)(a) & (b), Section 29(4)
Fact of the Case:
The plaintiff filed a suit for permanent injunction for restraining infringement of trademark 'Lemon Tree' and damages. The plaintiff is the proprietor of the registered trademark 'Lemon Tree' and has invested significantly in the hotel business under this brand. The defendant started construction of residential apartments under the name 'Lemon Tree Apartments' near the plaintiff's hotel. The plaintiff claimed infringement of trademark under Section 29(2)(a) & (b) and Section 29(4) of the Trade Marks Act, 1999.
Finding of the Court:
The Court found that the plaintiff had a strong prima facie case for grant of ad-interim injunction as the plaintiff had a registered trademark, continuous use, and significant investment in the business. The defendant's adoption of the identical trademark appeared to be dishonest with the intention to encash the plaintiff's goodwill. The Court also found that the balance of convenience lay in favor of the plaintiff and that the plaintiff would suffer irreparable loss and injury if the defendant was not restrained from using the trademark. The Court imposed costs of `2,00,000 on the defendant.
Issues: The issues involved trademark infringement, dishonest adoption of trademark, balance of convenience, and imposition of costs.
Ratio Decidendi: The Court held that the plaintiff had a strong prima facie case for grant of ad-interim injunction and that the balance of convenience lay in favor of the plaintiff. The Court also emphasized the need to impose realistic costs on wrongdoers to discourage frivolous litigation.
Final Decision: The defendant was restrained from using the plaintiff's registered trademark 'Lemon Tree' and was ordered to pay costs of `2,00,000 to the plaintiff within four weeks. The defendant was granted two months to change its name and remove all references to 'Lemon Tree' subject to the payment of costs.
I.A.No.15969/2009 1. The plaintiff has filed this suit for permanent injunction for restraining infringement of trademark, service mark, copyright and for damages in respect of its trademark “Lemon Tree”.
1.1 Along with the suit, the plaintiff filed I.A.No.15969/2009 for grant of ex-parte ad-interim injunction. Vide order dated 9th December, 2009, the summons in the suit and notice in the application were issued to the defendant. However, ex-parte ad-interim injunction was not granted to the plaintiff at that time.
1.2 On 29th April, 2010, the plaintiff gave up the claim for violation of the copyright as well as passing off. In view thereof, the plaintiff’s claim is now restricted to the claim for infringement of trademark only.
1.3 The pleadings in the suit as well as in I.A.No.15969/2009 under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure are complete.
2. Plaintiff’s Case
2.1 The plaintiff is the proprietor of the registered trademark “Lemon Tree” in classes 8,12,16,17 and 42. The particulars of the seven registrations held by the plaintiff are given in para 12 of the plaint and the registration certificates have been placed on record as Annexure „F?. The plaintiff has also applied for registration in Classes 29, 30, 31, 32 and 35 which are pending with the Trademark Registry.
2.2 The plaintiff conceived and adopted the trade mark “Lemon Tree” in 2001 and started its use in October, 2002. The plaintiff opened its first hotel in Gurgaon in June, 2004. The plaintiff has eleven operational hotels under the name “Lemon Tree” in various states namely, Haryana, Goa, Maharashtra, U.P., Kerala, Gujarat, Madhya Pradesh, Tamil Nadu and Karnataka. Eight more hotels of the plaintiff are under construction.
2.3 The plaintiff claims to have invested more than `5,000 crores in the hotel business. The financial reports and audited accounts of the plaintiff have been placed on record as Annexure „H?.
2.4 The plaintiff claims its hotel chain to be the country?s first moderately priced, upscale, full service, business and leisure hotels for catering to the needs of affluent and middle class society. The plaintiff claims to have acquired high reputation in the market widely recognized in the country as well as abroad. The plaintiff further claims to have widely advertised in the media. The annual revenue generated and the expenditure incurred on advertisements by the plaintiff for the years ending 31st March, 2005 to 31st March, 2009 are given in para 18 of the plaint. In the year ending 31st March, 2005, the plaintiff generated revenue of `2,38,31,842/- out of which the plaintiff spent `2,00,051/- on advertisements. The annual revenue of the plaintiff increased to `56,24,55,700/- in the year ending 31st March, 2009 out of which the plaintiff has spent `26,34,238/- on the advertisements. The copies of the audited reports of the plaintiff for the years 2004-05 to 2008-09 are on record as Annexure „H?. The write ups of the plaintiff’s hotels are on record as Annexure-I.
2.5 On 17th September, 2009, the plaintiff came to know that the defendant had started construction of residential apartments under the name and style of “Lemon Tree Apartments” at Madhapur, Hyderabad at a distance of about 2 kms from their hotel at Hyderabad known as Lemon Tree Hotel. The brochure of the defendant is on record as Annexure-J. The plaintiff immediately thereafter instituted the present suit seeking the injunction against the defendant.
2.6 The adoption and use of trademark “Lemon Tree” by the defendant is not bonafide and innocent but malafide and with the dishonest intention of encashing the goodwill and reputation of the plaintiff. The defendant had been carrying on its construction business since the year 1997 in the name of M/s Vaishnavi Estates (P) Ltd. The defendant adopted the trademark “Lemon Tree” in 2009 in respect of its project at a distance of 2 kms from the plaintiff’s hotel after the plaintiff’s hotel at Madhapur, Hyderabad came into e
