The main legal point established in the judgment is that a party who has recognized the ownership of trade marks under a license agreement is estopped from challenging that ownership and the owner can establish a prima facie case for seeking injunction based on the terms of the agreement and the actions of the other party.

JUDGMENT :

Devinder Gupta, J.

This appeal is against an order passed by learned Single Judge on 23.9.1998 allowing the application of plaintiff/Respondent filed under Order 39 Rules 1 and 2 C.P.C. thereby restraining the Defendants/Appellants from using the stylized logo and trade mark PC MAGAZINE, INTERNET USER, COMPUTER SHOPPER and PC WEEK subject to furnishing a bank guarantee of Rs. 5 lakhs to compensate the defendants/appellants, in case suit is finally dismissed. Learned Single Judge on appreciation of the material placed before him concluded that there was prima facie case for grant of injunction; balance of convenience also lay for grant of injunction in favor of the plaintiff/Respondent; and the plaintiff/Respondent will suffer irreparable loss and injury in case injunction, prayed for, is not granted. Learned Single Judge noticed that the defendants/appellants had taken a license with respect to PC MAGAZINE from the plaintiff/Respondent. On referring to Clause 12 of the said agreement, learned Single Judge negatived the case set up by the defendants of prior user of mark observing that in case the defendants had not taken the license and published PC MAGAZINE under the said licence, he might have been persuaded to hold that the plaintiff was not the owner and the defendants had acquired ownership by prior user of the trade mark in India in which eventuality argument that the plaintiff/Respondent had no claim in U.S.A. to exclusive right to use PC MAGAZINE and could have succeeded in holding that the Defendants are holder of the trade mark.

2. The facts in brief are that the plaintiff/Respondent filed suit for injunction against the appellants in relation to four titles used with respect to magazines, namely (1) PC MAGAZINE (2) INTERNET USER (3) COMPUTER SHOPPER and (4) PC WEEK. The basis of the plaintiff's suit is that the appellants were its licensee for publishing computer magazine under the trade mark "PC MAGAZINE INDIA" under a license agreement dated 9.4.1994. The appellants. On entering the said agreement the appellants recognised plaintiff's proprietory rights to the title. The appellants had also acknowledged plaintiff's ownership of all the titles being used by the plaintiff/Respondent, referred to in the agreement as "Ziff Marks". In Clause 12 and (b) of the license agreement the appellants specifically agreed and acknowledged the copyright and trade marks of the plaintiff, riot to exercise its rights under the agreement or otherwise claim any right or interest in trade marks or the Ziff Marks beyond the rights given in the agreement. The "Ziff Marks" under Clause 12(c) of the agreement included the plaintiffs trade marks i.e., PC MAGAZINE, PC WEEK, COM PUTER SHOPPER and INTERNET USER. The plaintiff/Respondent claimed that licence stood terminated. The defendants/appellants thereafter started publishing four magazines, contrary to the terms of license thereby necessitating filing of the suit.

3. The suit was opposed by the defendants/appellants. It was appellants' case that 'PC.MAGAZINE' was first published by it in March, 1994. Magazine INTERNET USER was also published earlier to the date of licence. It was only in April, 1994 that the agreement was entered into for publication of Copy Right material, on payment of royalty to the plaintiff/Respondent. The agreement did not relate to the other three titles. It related only to PC MAGAZINE. The appellants were the prior owners and user of mark "PC MAGAZINE" in India. All the four titles are registered with Registrar of Newspapers in India in the name of the appellants. The Respondent has no trade mark registered and had not claimed any statutory right in its trade marks in India and the Respondent had claimed that it was not a suit for infringement of trade mark and its case thus revolves round the cause of action of passing off. The appellants did not dispute that license had come to an end, but contended that even during subsistence of agreement, magazines of t