2014 Supreme(Raj) 216

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR
R.S. CHAUHAN, J.
M/s. Vijay Solvex Ltd. & Anr.
Vs.
Shree Hari Agro Industries Ltd & Ano.
Civil Misc. Appeal Nos. 199/2014 & 293/ 2014
Decided on: 31st March, 2014

The owner of a copyright has the exclusive right to reproduce, distribute, and display the copyrighted work. Infringement of copyright occurs when someone other than the copyright owner exercises one of these exclusive rights without permission.

Headnote:

The court held that the plaintiff had a strong prima facie case in its favor of passing off by the Defendant Nos. 1 and 2. The court also held that the plaintiff was the first owner of the copyright in the label/logo created by Grafik Makros and that there was a deceptive similarity between the label, the artwork, used by the plaintiff and the Defendant No. 1. The court further held that the balance of convenience was in favor of the plaintiff and that an irreparable loss would be caused to the plaintiff if the defendant Nos. 1 and 2 were permitted to infringe the copyright vested in the plaintiff.

Fact of the Case:

The plaintiff, a company registered under the Company Act, 1956, filed a civil suit for declaration, mandatory injunction, and permanent injunction against respondent No. 2, M/s Vijay Industries, and against the defendant No. 1, M/s Hari Agro Industries Ltd, for infringement and passing off under the Trade Mark Act, 1999, and for infringement of copyright under the Copyright Act, 1957. The plaintiff claimed that it had been using the trade mark SCOOTER VANASPATI since 1994-95 and SCOOTER GOLD VANASPATI since 2010. The defendant No. 2 claimed that it had gotten the trade mark SCOOTER registered in its name in 1978. The defendant Nos. 1 and 2 filed their replies to the temporary injunction application. In its reply, the Defendant No. 2 claimed that initially the partners of Defendant No. 2 and the Directors of the plaintiff company belonged to a Hindu Undivided Family. Around 1960, the family members had formed a partnership firm in the name and style of M/s Vijay Industries. Since 1960, the firm has been carrying out the business of manufacturing edible oil, oil cakes, ghee, and allied goods. In 1978, the Defendant No. 2 had gotten the trade mark SCOOTER registered in its name, in Class 29 of the Act, with the Registrar of Trade Mark. Since the plaintiff was a sister concern of the Defendant No. 2, therefore on 2-3-1990 both had entered into an agreement. Under this agreement, the Defendant No. 2 had permitted the plaintiff to use its trade mark SCOOTER for the products manufactured by the plaintiff. Under the agreement certain conditions were imposed upon the plaintiff: from 1-4-1990 to 31-3-1995, the plaintiff was not required to pay any royalty to the defendant No. 2 for the use of its trade mark. For the next fifteen years, from 1995 till 2010, the plaintiff was required to pay a royalty of Rs. 1000 per month to the Defendant No. 2. After the said period, the further extension of the agreement was subject to mutual consent. However, the agreement was not renewed after 2010. Hence, the plaintiff was using the trade mark SCOOTER as a mere licensee from 1990-2010. Further, once the agreement came to an end in 2010, the plaintiff did not have the right to use the said trade mark for its products. In fact, in 2009, the Defendant No. 2 entered into an agreement with Defendant No. 1 and permitted the latter to use its trade mark SCOOTER for manufacturing and selling SCOOTER VANASPATI. Subsequently, on 30-9-10, the Defendant No. 2 has applied, before the Registrar of Trade mark, for registration of SCOOTER GOLD VANASPATI as its trade mark. The said application is still pending. Meanwhile, the plaintiff has also applied for registration of the trade mark SCOOTER GOLD VANASPATI on 5-10-13; the said application is also pending.

Finding of the Court:

The court held that the plaintiff had a strong prima facie case in its favor of passing off by the Defendant Nos. 1 and 2. The court also held that the plaintiff was the first owner of the copyright in the label/logo created by Grafik Makros and that there was a deceptive similarity between the label, the artwork, used by the plaintiff and the Defendant No. 1. The court further held that the balance of convenience was in favor of the plaintiff and that an irreparable loss would be caused to the plaintiff if the defendant Nos. 1 and 2 were permitted to infringe the copyright vested in the plaintiff.

Issues: 1. Whether the plaintiff had a strong prima facie case in its favor of passing off by the Defendant Nos. 1 and 2? 2. Whether the plaintiff was the first owner of the copyright in the label/logo created by Grafik Makros? 3. Whether there was a deceptive similarity between the label, the artwork, used by the plaintiff and the Defendant No. 1? 4. Whether the balance of convenience was in favor of the plaintiff? 5. Whether an irreparable loss would be caused to the plaintiff if the defendant Nos. 1 and 2 were permitted to infringe the copyright vested in the plaintiff?

Ratio Decidendi: 1. The court held that the plaintiff had a strong prima facie case in its favor of passing off by the Defendant Nos. 1 and 2 because: * The plaintiff had been using the trade mark SCOOTER VANASPATI since 1994-95 and SCOOTER GOLD VANASPATI since 2010. * The defendant Nos. 1 and 2 had entered the market only in 2013. * The plaintiff was the prior user of both the goods. * The labels used by the Defendant No. 1 were deceptively similar to the labels used by the plaintiff. * The defendant Nos. 1 and 2 were likely to cause confusion among the consumers. 2. The court held that the plaintiff was the first owner of the copyright in the label/logo created by Grafik Makros because: * The plaintiff had hired the services of Grafik Makros to create the label/logo. * There was no agreement to the contrary between the plaintiff and Grafik Makros. * Therefore, the plaintiff was the first owner of the copyright in the label/logo. 3. The court held that there was a deceptive similarity between the label, the artwork, used by the plaintiff and the Defendant No. 1 because: * The labels used by the Defendant No. 1 were similar to the labels used by the plaintiff in terms of color scheme, fonts, and design. * The defendant Nos. 1 and 2 were likely to cause confusion among the consumers. 4. The court held that the balance of convenience was in favor of the plaintiff because: * The plaintiff had been using the trade mark SCOOTER VANASPATI and SCOOTER GOLD VANASPATI for a longer period of time than the defendant Nos. 1 and 2. * The plaintiff had a reputation and goodwill in the market for its products. * The defendant Nos. 1 and 2 were likely to cause irreparable harm to the plaintiff's reputation and goodwill. 5. The court held that an irreparable loss would be caused to the plaintiff if the defendant Nos. 1 and 2 were permitted to infringe the copyright vested in the plaintiff because: * The plaintiff had a copyright in the label/logo used for its products. * The defendant Nos. 1 and 2 were using a deceptively similar label/logo for their products. * The defendant Nos. 1 and 2 were likely to cause confusion among the consumers and damage the plaintiff's reputation and goodwill.

Final Decision: The court allowed the appeal filed by the plaintiff and modified the order dated 2-1-2014 to the extent that the defendant Nos. 1 and 2 shall neither manufacture, nor sell their products known as SCOOTER VANASPATI and SCOOTER GOLD VANASPATI during the pendency of the trial. Moreover, the defendant Nos. 1 and 2 shall not use any design, label or logo which is deceptively similar to the design, label or logo being used by the plaintiff for its twin products of SCOOTER VANASPATI and SCOOTER GOLD VANASPATI during the pendency of the suit. The court dismissed the appeal filed by the Defendant No. 2 and the application filed by defendant No.1 under Or. 41 Rule 27 CPC.