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2021 Supreme(Online)(KER) 19635
HIGH COURT OF KERALA
V. G. Arun, J
BISMI APPLIANCES – Appellant
Versus
BISMI HOME APPLIANCES LLP – Respondent
CRP/270/2021
M.A.ABDUL HAKHIM, JOSEPH GEORGE, S.SREEKUMAR (SR.), P.MARTIN JOSE, P.PRIJITH THOMAS, P.KURUVILLA, R.GITHESH, C.K.ANWAR, HARIKRISHNAN, S.KEZIAH, MIRUM GEORGE
Arbitration clauses are binding only on parties to the contract; non-signatories cannot be compelled to arbitrate, especially when the governing agreement has been superseded.
Headnote:
Trademark - Infringement - Trade Marks Act 1999, Sections 29, 134, 135 - Summary: The court examined the ownership of the trademark 'Bismi' post-partnership disintegration and the applicability of arbitration clauses related to trademark infringement. The interpretation of 'separate legal entity' for LLP influenced the decision to dismiss the arbitration referral.
Fact of the Case:
The petitioner, a registered firm, owns the trademark 'Bismi'. After a change in partnership, disputes arose, leading to a deed of retirement stating the retiring partners could use the trademark. The respondents used 'Real Bismi' leading to the suit for injunction against them.
Issues: Whether the suit for trademark infringement is maintainable when the respondents are non-signatories to the arbitration agreement and whether the MoU's arbitration clause survives post-deed of retirement.
Ratio Decidendi: The court established that arbitration can only bind parties to the agreement and non-parties cannot be compelled into arbitration. The MoU was rendered obsolete by the deed of retirement, which lacked an arbitration clause.
Final Decision: The civil revision petition was allowed, setting aside the impugned order and directing the trial court to proceed with the suit.
ORDER
Dated this the 15th day of December, 2021 The petitioner is the plaintiff in O.S.No.26 of 2021 of the Vth Additional District Court, Ernakulam. The suit is filed under Sections 29 , 134 and 135 of the Trade Marks Act, 1999 , alleging infringement of petitioner's trademark.
The essential facts are as under;
The petitioner is a registered firm constituted with the objective of conducting business in home appliances and allied products. The petitioner firm is the registered holder of the trademark 'Bismi'. The firm was reconstituted from time to time. As on 31.05.2018, partners of the firm were V.A.Ajmal, V.Y.Shabani, V.A.Yusuf and P.M.Nafeesa. The partners are close relatives; V.A.Ajmal and V.Y.Shabani being the son-in-law and daughter of V.A.Yusuf and P.M.Nafeesa. Difference of opinion arose among the partners, with V.A.Ajmal and V.Y.Shabani on one side and V.A.Yusuf and P.M. Nafeesa on the other. The disputes were settled at the intervention of mediators and a Memorandum of Understanding (MoU) was executed by the partners on 31.05.2018. As per Clause 13 of the MoU, V.A.Yusuf and P.M.Nafeesa were to retire from the firm with effect from 15.06.2018 and all existing debts and liabilities were to be taken over by the continuing partners, namely, V.A.Ajmal and V.Y.Shabani. As per Clause 13 of the MoU, the retiring partners have the right to use the goodwill and trademarks of the petitioner firm at their Kaloor, Angamaly and Thodupuzha offices, godowns and outlets, as also the offices and godowns to be opened from the date of execution of the retirement deed. In accordance with the MoU, a deed of retirement was executed between the continuing and retiring partners on
15.06.2018. As per Clause 5 of the Deed of Retirement, the continuing partners permitted the retiring partners to use the firm's trademark for their new firm and the retiring partners agreed that they will not set up any new business in the same name 'Bismi Appliances', except names starting with 'Bismi'. In turn, the continuing partners agreed that the trademark of the petitioner firm can be used by the retiring partners for their new firm, along with their new partners. Thus, the petitioner firm became the owner and prior user of the trade name and trademark 'Bismi' and the retiring partners, permitted users of the trademark. Later, the first respondent, a Limited Liability Partnership (LLP), constituted by the retiring partners along with others, put up display boards and advertisements with the words 'Real Bismi'. Thereupon, the petitioner issued a lawyer notice to the respondents, asking them to refrain from using the words 'Real Bismi'. The second respondent sent a reply notice claiming that he is entitled to use the trade name 'Bismi' and has every right to let the public known that, his is the real business. Hence, the suit was filed seeking the following reliefs;
“i) issuing a permanent prohibitory injunction restraining the defendants, their men and agents from making any reference, use, description of the trade mark of the plaintiff 'BISMI' as real in any manner including restraining the use of the words 'real' or similar words as prefix or suffix to the trade mark/name 'BISMI' and the use of the logos and advertisements included in Schedule B, ii) issuing a permanent prohibitory injunction restraining the defendants, their men and agents from enlarging or exceeding the permission given by the plaintiff to use the trademark/name, 'BISMI or from modifying such trademark/name, iii) issuing mandatory injunction directing the defendants to remove the logos and advertisements included in Schedule B from all its literature, promos, flyers, labels, packings, advertisements and in any printed material, digital, electronic social media and media of any other form of representation to the general public; on their failure to do so, the plaintiffs may be permitted to do the same through the process of this Hon'ble Court and to realise the cost from the defendants;
Th
