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IN THE HIGH COURT OF DELHI
Prathiba M. Singh, J.
VST Industries Limited - Appellant
Versus
Rudra Ventures Private Limited - Respondent
CS (COMM) 369 of 2021
Decided On : 08-04-2022




Trademark infringement occurs when the use of a mark or trade-dress creates a likelihood of confusion among consumers; courts uphold the established goodwill of the original trademark holder.

Headnote:(A) Trademarks Act, 1999 - Sections pertaining to registered trademarks and passing off - Permanent injunction granted against the unauthorized use of registered trademarks and packaging - Plaintiff, a leading tobacco manufacturer, claims infringement from Defendant using a similar mark and trade-dress for cigarettes. (Paras 2, 3, 6, 10)

(B) The Plaintiff demonstrated that its mark `TOTAL' has gained significant goodwill and sales exceeding Rs. 2,000 crores since its adoption. (Para 3)

(C) Defendants, though registered users of the mark `TOPAZ', agreed to alter their trade dress and packaging to avoid confusion. (Paras 8, 10)

Facts of the case:
The Plaintiff filed for an injunction against the Defendant for trademark infringement related to cigarettes bearing the `TOTAL' mark, asserting substantial sales and registered trademarks since 2015, while the Defendant claimed prior use of the `TOPAZ' mark. (Paras 2, 3, 4)

Findings of Court:
The suit was decreed based on mutual agreement regarding the new packaging of the defendant's product to avoid confusion with `TOTAL'. (Paras 10, 13)

Issues: The main issues included the necessity of permanent injunction regarding trade-dress and the validity of trademark claims between the parties. (Paras 5, 8)

Ratio Decidendi: The court acknowledged the Plaintiff’s established goodwill, permitting the Defendants to use their mark as long as the packaging is distinct from the Plaintiff's. The damages for litigation costs were awarded to the Plaintiff. (Paras 10, 13)

Result: Suit decreed in terms of the agreed terms by both parties.

Table of Content
1. trademark protection and infringement. (Para 2 , 3)
2. nature of defendants' packaging and trade-dress. (Para 4 , 5)
3. court's position on plaintiff's injunction. (Para 6)
4. court's directive regarding sale and packaging. (Para 7 , 8)
5. agreement on new packaging and trademark rights. (Para 9 , 10 , 11 , 12)
6. final resolution and decree of the suit. (Para 13 , 14)

JUDGMENT

Prathiba M. Singh, J. (Oral)--This hearing has been done through hybrid mode.

2. The Plaintiff had filed the present suit seeking permanent injunction restraining infringement of registered trademarks, copyright in packaging and trade-dress, passing off, dilution, damages, rendition of accounts, delivery up and other reliefs. The present suit relates to the trademark `TOTAL' used by the Plaintiff for cigarettes.

3. The Plaintiff is stated to be a leading company in the tobacco industry for the last 90 years and it has been manufacturing and selling cigarettes under several trademarks such as `TOTAL', `CHARMS', `CHARMINAR', `EDITIONS', `SPECIAL' and `MOMENTS'. As per the plaint, the said mark was adopted in 2015 and since then, the mark has achieved sales of more than Rs.2,000 crores. The Plaintiff's case is that `TOTAL' is the largest capsule cigarette brand and is among the top five cigarette brands in the country. The Plaintiff's marks relating to `TOTAL' are also registered in Class 34 since 9th October, 2015, including the packaging of the `TOTAL' branded cigarettes and its colour. The Plaintiff also has copyrights for various packagings of `TOTAL' branded cigarettes.

4. Defendant No.1 is a company called-Rudra Ventures Private Limited run by Mr. Rajesh Tangri/Defendant No.2 and Mr. Hitesh Tangri/Defendant No.3, which has launched cigarettes under the mark `TOPAZ'. The grievance of the Plaintiff is that the said products of the Defendants are being produced in a similar trade-dress, writing style and colour combination. The similarities are also not merely on the packaging but also on the cigarette sticks and the foil paper used on the cigarettes. The products of the Plaintiff and Defendants are as under:

5. The claim of the Defendants is that they have been using the mark `TOPAZ' since 2011, which is disputed by the Plaintiff. The Defendants have also obtained trademark registrations for their mark `TOPAZ' and the device mark in Class 34. The present suit was then filed by the Plaintiff, in which, vide order dated 10th August, 2021, an ex-parte injunction was granted in the following terms:

    "22. Accordingly, till further orders, defendants, its Directors, partners or proprietors, as the case may be, its officers, servants and agents from manufacturing, selling, offering for sale, supplying, advertising, directly or indirectly dealing in any business unauthorizedly using the plaintiff's trade mark TOTAL or the mark TOPAZ (written in the same font and style as that of the plaintiff) or any other mark deceptively similar to the mark of plaintiff and permutations/combinations thereof amounting to infringement of plaintiff's trade mark TOTAL and also to use the essential features of the plaintiff's packaging/trade dress of its brand TOTAL amounting to infringement of the plaintiff's copyrights subsisting in the packaging/trade dress of the plaintiff's trade mark TOTAL."

6. An application under Order XXXIX Rule 4 CPC was, thereafter, filed by the Defendants. The matter was also referred to mediation, however the mediation proceedings did not bear fruition. On 7th January, 2022, vide a detailed order, the injunction was also confirmed as against the Defendants. However, owing to the perishable nature of tobacco and cigarette sticks, the inventory of stocks which was seized by the Local Commissioner was directed to be released and permitted to be exported abroad. The relevant portion of the said order dated 7th January, 2022 is set out below:

    "35. In the aforesaid view of the matter, without expressing any opinion on the merits of

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