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2024 Supreme(Online)(DEL) 7166
HIGH COURT OF DELHI
Mini Pushkarna, J
MCAM SURLON INDIA LTD – Appellant
Versus
MS METALON MARKETING DELHI PARTNERSHIP FIRM & ANR. – Respondent
CS(COMM)-846/2023
Mr. Manoj Kumar Garg & Mr. Pulkit Atal, Adv.
Trademark infringement occurs when a licensee continues to use a registered trademark after the license has been revoked, leading to confusion among consumers.
Headnote:(A) Trade Marks Act, 1999 - Sections 29(1), (2), (3), and (5) - Trademark infringement - Plaintiff sought injunction against defendants for using registered trademark 'METALON' after termination of Distribution Agreement - Plaintiff established prima facie case of infringement and irreparable loss - Balance of convenience favored plaintiff. (Paras 6, 9, 10)
(B) Distribution Agreement - Terms and obligations - Defendants failed to make payments as per agreement, leading to termination and subsequent unauthorized use of trademark. (Paras 2.9, 10)
Facts of the case:
The plaintiff, a manufacturer of engineering plastic products, registered the trademark 'METALON' in 2002 and has used it since 1994. The defendants, after entering a Distribution Agreement, failed to pay outstanding dues and continued using the trademark post-termination. (Paras 2.1, 2.12)
Findings of Court:
The court found that the defendants infringed the plaintiff's trademark by using it after the termination of the Distribution Agreement, which was not justified. (Paras 6, 10)
Issues: The main issues were whether the defendants had the right to use the trademark after termination of the Distribution Agreement and the likelihood of confusion among consumers. (Paras 6, 10)
Ratio Decidendi: The court ruled that once a license is revoked, any use by the licensee of the trademarks would amount to infringement, emphasizing the need to protect the rights of the registered proprietor. (Paras 8, 10)
Result: Defendants restrained from using the trademark 'METALON'.
J U D G M E N T
23.08.2024 I.A. 23556/2023
1. The present is an application filed on behalf of the plaintiff under Order XXXIX Rules 1 and 2 read with Section 151 of Code of Civil Procedure, 1908 (“CPC”), seeking to restrain the defendants from infringing the plaintiff‟s registered trademark, i.e., „METALON‟.
2. The case, as canvassed by the plaintiff, is as follows:
2.1 The plaintiff is interalia engaged in the business of manufacturing, production and sale of engineering plastic products, etc., having considerable reputation and goodwill in the said industry.
2.2 The plaintiff coined, invented and adopted the distinctive mark „METALON‟ in January, 1994 for its business activities and has been using the same since then, continuously, extensively and openly, without any interruption. The trademark „METALON‟ of the plaintiff is registered in Class-17 in respect of Plastics and Nylon. The said trademark has been renewed from time to time, and its registration is valid and subsisting.
2.3 The mark of the plaintiff has highest degree of distinctiveness, connoting the plaintiff‟s goods exclusively.
2.4 The popularity and reputation enjoyed by the trademark „METALON‟, can be gauged from the large sales enjoyed by the products of the plaintiff under the said mark. The details of the sales, as given in the plaint, are reproduced hereunder:
2.5 The defendant no.2 and the Director of the plaintiff have known each other, for a long time, as the defendant no.2 has family relations with the Director of the plaintiff-company. It is submitted that the defendant no.2 is also engaged in the same business activities, as that of the plaintiff, and is engaged in the distributorship of goods manufactured by the plaintiff.
2.6 In the year 2012, the defendant no.2 approached the Director of the plaintiff and requested to take distributorship of the goods manufactured/produced by the plaintiff. Accordingly, a Distribution Agreement was executed and entered into between the plaintiff and the defendant no.1-firm on 07th May, 2012, w.e.f., 01st April, 2012.
2.7 After entering into the Distribution Agreement with the plaintiff, the defendant no.2 also formed a partnership firm, namely, M/s Metalon Marketing (Delhi) by using the name and style of the plaintiff‟s registered trademark. After execution of the Distribution Agreement with the defendant no. 2, the plaintiff supplied the required products with customized specifications to the defendants.
2.8 Subsequent to the supply of goods/products by the plaintiff to the defendants, invoices were raised and duly sent to the defendants from time to time for their payment. Thus, it is submitted that total outstanding of ₹ 30,67,673/- still remains to be paid to the plaintiff. The defendants were negligent and habitual in making delayed payments to the plaintiff.
2.9 As per Article 5, sub-para 5.5 of the Distribution Agreement, the defendants were required to make the payment within sixty days from the date of the receipt of the invoices issued against the goods supplied. However, the defendants have failed to make the make the payments as per the Distribution Agreement. Accordingly, the plaintiff sent an E-mail dated
23rd January, 2023 terminating the Distribution Agreement.
2.10 However, the defendant neither responded to the E-mail nor made the payment of the outstanding amount. The plaintiff repeatedly demanded the outstanding payments, but defendants grossly neglected and miserably failed to make payments.
2.11 The plaintiff had given the permission to defendant no. 2 to use its registered trademark „METALON‟ only for business purposes and no other purpose. However, the defendant no. 2 continued to use the said trademark of the plaintiff, even after the plaintiff sent the notice terminating the Distribution Agreement.
2.12 The defendants, being fully aware of the fact that the plaintiff is the registered proprietor and exclusive owner of the trademark „METALON‟, have deliberately and with the sole intent to deceive and cau
