IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 02-12-2011 Coram THE HONOURABLE MRS. JUSTICE R. BANUMATHI and THE HONOURABLE MR. JUSTICE B. RAJENDRAN O.S.A. Nos. 300 to 303 of 2011 and M.P. Nos. 1 and 2 of 2011 Daystar Television Network Pvt Ltd., rep. By its Managing Director Mr. A. Jasper New Prabhu No.229/1, Royal Park Apartment Konnur High Road, Ayanavaram Chennai – 600 023 .. Appellant in all the appeals/ Plaintiff Versus 1. Word of God Fellowship Inc.,/d/b/a/Daystar Television Network No.3901, Highway121, Bedford Texas – 76021, U.S.A. 2. Daystar Broadcasting Network Pvt Ltd Plot No.77, Balaji Swarnapuri Colony Behind Donbosco School Sanjeevreddy Nagar Hyderabad – 560 018 .. Respondents in all the appeals/ Defendants Appeals filed under Order XXXVI Rule 9 of O.S. Rules read with Clause 15 of the Letters Patent against the Judgment and Decree dated 13.07.2011 passed in O.A. Nos. 439, 440 and 441 of 2011 and Application No. 2821 of 2011 in C.S. No. 340 of 2011 on the file of this Court. For Appellant : Mr. Arvind P. Datar, Senior Counsel for M/s. P.V.S. Giridhar & Sai Associates in all the appeals For Respondents : Mr. Satish Parasaran in all the appeals COMMON JUDGMENT B. RAJENDRAN, J Aggrieved by the common order dated 13.07.2011 passed by the learned single Judge in O.A. Nos. 439, 440 and 441 of 2011 and Application No. 2821 of 2011 in C.S. No. 340 of 2011, the appellant https://hcservices.ecourts.gov.in/hcservices/ has come forward with these Original side Appeals. 2. The appellant has filed C.S. No. 340 of 2011 for the following reliefs:- "(a) A decree of permanent injunction restraining the defendants, their men, agents, representatives, successors or assigns or anyone claiming under them from downlinking, distributing the signals or telecasting Daystar Television Network channel in any place or media in India otherwise than through the plaintiff; (b) A decree of permanent injunction restraining the defendants, by themselves, their men, agents, representatives, successors or assigns or anyone claiming through or under them from in any manner infringing the plaintiff's registered trademark "DAYSTAR TELEVISION NETWORK" by using the said name in any television programmes, stationery, broadcast, advertisements, websites, propoganda literature or in any other manner or media in India whatsoever; (c) A decree of permanent injunction restraining the defendants by themselves, their partners/Directors as the case may be, heirs, legal representatives, successors-in-business, assigns, servants, agents, distributors, retailers, stockists or any one claiming through them from in any manner passing off or enabling others to pass off their goods, services and business by use of offending trademark "DAYSTAR TELEVISION NETWORK" as trade name or in any other manner whatsoever; (d) A decree be ordered to the second defendant to render true and faithful accounts of profits earned by them on account of adoption and use of trademark "DAYSTAR TELEVISION NETWORK" in relation to their services and the plaintiff undertakes to pay the actual court fees after the second defendant renders the accounts; (e) To direct the first defendant to pay to the plaintiff compensation of a sum of Rs.75,00,000/- (Rupees Seventy Five Lakhs Only) together with interest at 12% per annum from the date of plaint to the date of payment (f) A decree for costs of the suits 3. Pending suit, the plaintiff/appellant has taken out four applications namely O.A. Nos. 439, 440 and 441 of 2011 and Application No. 2821 of 2011 in C.S. No. 340 of 2011 praying for the https://hcservices.ecourts.gov.in/hcservices/ following reliefs:- (i) O.A. No. 439 of 2011 has been filed praying for an ad interim injunction restraining the respondents / defendants, their men, agents, representatives, successors or assigns or anyone claiming under them from downlinking, distributing the signals or telecasting Daystar Television Network channel in any place or media in India otherwise than through the applicant/ plaintiff pending disposal of the above suit. (ii) O.A. No. 440 of 2011 has been filed praying for an ad interim injunction restraining the respondents/defendants, by themselves, their men, agents, representatives, successors or assigns or anyone claiming through or under them from in any manner infringing the applicant's/plaintiff's registered trademark "Daystar Television Network" by using the said name in any television programmes, stationery, broadcast, advertisements, websites, propoganda literature or in any other manner or media in India whatsoever, pending disposal of the suit (iii) O.A. No. 441 of 2011 has been filed praying for an ad interim injunction restraining the defendants by themselves, their partners/Directors as the case may be, heirs, legal representatives, successors-in-business, assigns, servants, agents, distributors, retailers, stockists or any one claiming through them from in any manner passing off or enabling others to pass off their goods, services and business by use of offending trademark "Daystar Television Network" as trade name or in any other manner whatsoever, pending disposal of the suit. 4. On 29.04.2011, this Court granted interim injunction in O.A. No. 440 of 2011 as prayed for. Thereafter, the appellant filed Application No. 2821 of 2011 praying to punish the respondents/defendants for disobedience of the order 29.04.2011 in O.A. No. 440 of 2011. 5. All the above applications were taken up together and by a common order dated 13.07.2011, the learned single Judge dismissed all the applications namely O.A. Nos. 439, 440 and 441 of 2011 and Application No. 2821 of 2011 in C.S. No. 340 of 2011. 6. The case of the appellant is as follows:- (i) The appellant is a company incorporated under the provisions of the Companies Act and the object of the appellant company is to downlink television channel and to carry them to homes and other places in India, to install, maintain and run television networks, to operate as Multi-System Operators and to uplink television https://hcservices.ecourts.gov.in/hcservices/ programmes. According to the appellant, for the last four years, due to their hardwork in their business, they have earned reputation in India. (ii) On 01.05.2007, the appellant entered into a marketing and distribution agreement with the first respondent at Chennai whereby the first respondent authorised the appellant to market and distribute their rights relating to Daystar Network Television, USA and to provide Word of God Fellowship (WOGF) Programme throughout the territory of India. The period of agreement was five years, with an option for further renewal. As per the agreement, the appellant has to follow the downlinking guidelines stipulated by the Ministry of Information and Broadcasting, New Delhi. According to the appellant, pursuant to the agreement, they have been marketing and distributing the rights over the Daystar Network Television channels to various MSO's lawfully. The appellant also submitted an application to downlink Daystar Television Network in India to Ministry of Information and Broadcasting, New Delhi and based on the same, a licence/permission dated 15.02.2008 was issued to the appellant to downlink Daystar Television Network in India as a non-news and current affairs TV channel, which was also subsequently renewed on 28.02.2011 for a period of one year upto 14.02.2012. By virtue of the said permission issued under the provisions of Cable Television Network (Regulation) Act, 1955 and the rules framed thereunder, the appellant alone has the right to downlink the said channel and distribute the same throughout India. In other words, the appellant is the registered proprietor of the aforesaid trademark 'Daystar Television Network' in India. Based on such license/permission obtained by the appellant, they have also entered into agreement with various cable system operators of MSO's across India to receive and distribute signals of Daystar Television Network through cable service on a prime brand position in analog frequency and digital set top box through cable network in different States in India. In fact, the efforts taken by the appellant was also videly appreciated by the first respondent herein. (iii) On 01.12.2010, the appellant received an e-mail whereby the first respondent terminated the agreement entered into between the appellant and demanded the appellant to sign the said agreement and return it to the first respondent. As per the letter of termination, the appellant would cease to have any authority to enter into contract for telecast of programmes of Daystar Television Network. In and by such letter of termination, the appellant was also required to pay to the first respondent a sum of Rs.1.98 crores. According to the appellant, even prior to the letter of termination, the representative of the appellant and the first respondent had a meeting on 13.11.2010 and during the course of such meeting, the first respondent attempted to initiate the process of transferring the telecast rights of the appellant, but the same was declined by the appellant inasmuch as the appellant had the exclusive rights for another five years as per the agreement and the agreement was in force. (iv) On 30.12.2010, the appellant sent a reply to the first respondent pointing out that the appellant cannot be expected to sign a letter contrary to facts and opposed to their own rights and https://hcservices.ecourts.gov.in/hcservices/ interest. It was also pointed out that Day Star Television Network has been duly registered as a trade mark in India and is owned by the appellant whose reputation in India has been built up, besides that the appellant is having an exclusive downlinking licence based on the agreement. Therefore, the appellant denied their liability to pay any sum to the first respondent during the currency of the agreement and in fact, the first respondent is liable to compensate the appellant for the loss, hardship, mental agony and injury caused to them, which was quantified at USD 200,000. Even though the first respondent received the reply, there was no response. (v) The appellant learnt that the defendants have been dealing with third parties and MSO's directly and have been distributing their signals. The programmes are being telecast by down-linking Daystar Television Network not only in breach of the agreement, but in violation of the provisions of Cable Television Networks (Regulation) Act, 1995, particularly Section 3 thereof. The respondents have been by-passing the appellant, who is the only person authorised to distribute the channel in India in view of the licence granted in their favour. Therefore, the action of the respondents is not only illegal but amounts to an offence punishable under Section 16 of the Cable Television Networks (Regulation) Act, 1995. The respondents have also been infringing the registered trademark of the appellant and continuing to use the name Daystar Televisoin Network Channel in television programmes, in publicity materials etc., The goodwill and reputation built by the appellant by their hardwork and persistence effort is sought to be nullified by the respondents and they are taking unfair advantage of the reputation of their trade mark, which is detrimental to their interest. Due to the interference into their business activities by the respondents, the appellant has sustained loss of over Rs.10 lakhs during the year 2009-2010. 7.(i) The applications filed by the appellant were resisted by the respondents by contending that the suit is not maintainable before this Court in view of Section 134 of the Trade Marks Act inasmuch as the registration of the appellant's trade mark at Chennai does not by itself confer any jurisdiction to file the suit before this Court. Further, the trademark of the appellant has not been registered with the Trade Mark Registry at Chennai, but it was registered with the Trade mark authority at Mumbai, hence, the suit is liable to be dismissed in limine. (ii) The first respondent is a Georgia based non-profit organisation carrying on business under the name and style of Daystar Television Network since 1997. The first respondent was founded by Mr. Marcon Lamb and Mr. Joni Trammeli and set up the first full- power Christian television station in the State of Alabama in 1985. The said television network has over the years gained popularity and Daystar Television Network was officially launched in 1997 with live broadcast. The said television channel was aimed at reaching God's messages to Christians across the United States and as on date the first respondent's television channel is available in 254 countries across the world. https://hcservices.ecourts.gov.in/hcservices/ (iii) In 2006, the first respondent identified the appellant for the purpose of forming a company in India to telecast their Daystar Television Network Channel. All requisite funds for the purpose of commencing the telecast of the channel in India was given by the first respondent. In the process, the appellant was required to apply for and obtain necessary license from the Union of India for the purpose of downloading the first respondent's television link and telecasting the same in India. The Ministry of Information and Broadcasting had insisted upon registration of the logo of the first respondent under the Indian Trademarks Act as a condition precedent to issue the license with the certificate of registration of logo from the country of origin and an agreement permitting the appellant to use the said logo in India. Therefore, the first respondent requested the appellant to have the said logo registered in India as required. On 01.05.2007, an agreement was entered into between the first respondent and the appellant on 01.05.2007 for the purpose of telecasting the Daystar Television Network Channel in India. Thereafter, the appellant, with a view to telecast the first respondent's Daystar Television Network Channel, entered into agreement with Asianet Satellite Communication Limited and other networks and commenced the telecast and all expenditure towards the telecast of the channel were borne by the first respondent. In the course of their business, the first respondent felt that huge revenue generated through the telecast of the first respondent's channel was not put to use for the purpose as agreed, but it was misappropriated by the appellant. The first respondent also came to know that huge monies from the first respondent over the years were fabricated and forged by false descriptions. Therefore, the first respondent held meetings with the appellant and in line with the agreement arrived at between the parties, on 01.02.2010, a letter dated 12.04.2011 was sent terminating the agreement dated 01.05.2007 with the appellant and therefore the appellant does not have any right, whatsoever with regard to the first respondent's Daystar Television Network Channel and is disentitled to telecast the same. Since the appellant acted against the interest of the first respondent and the television channel, the first respondent had to find alternative means of telecasting its channel in India and therefore, they have caused the incorporation of the second respondent company on 01.11.2010. (iv) The appellant, with full knowledge about the first respondent's superior and exclusive right over the Daystar Television Network Channel and the intellectual property rights attached thereto, has filed the suit. The suit averment reveals that in addition to the acts of misappropriation of huge revenue generated through the telecast of Daystar Television Network channel, the appellant has sought to fradulently appropriate the properties of the first respondent, including the first respondent's trademark/logo Daystar Television Network. The appellant is merely a permissive/licensed user of their trade mark for thepurpose of telecasting the television channel in India and does not have an independent right over the said trademark/logo. All reputation and goodwill enjoyed by the trademark Daystar Television Network worldover including in India is relatable to the first respondent alone and no other person, including the appellant, can claim any title or right over the same. The trademark Daystar Television Network is the property of the first respondent and the same was https://hcservices.ecourts.gov.in/hcservices/ permitted tobe used by the appellant. The entire activity of the appellant from its incorporation is at the instance of the first respondent and by using the funds of the first respondent. The first respondent has till date spent approximately Rs.30 crores for promotion and telecast of its channel in India and millions of US dollar across the World towards promotion of its Daystar Television Network. Apart from entering into agreement with Asianet Satellite Communications Limited, the appellant had entered into agreements with various cable operators/MSO's in India and has been telecasting the channels of the first respondent in India. The charges/fees towards telecast of the first respondent's Daystar Television Network is running to crores of ruppes has been paid by the first respondent. Apart from the payment of charges/fee, the first respondent also supplied the receivers to the cable operators/MSO's through the appellant. While so, the appellant does not enjoy any right over the television channel or the trademark Daystar Television Network. 8. The learned Senior counsel appearing for the appellant would contend that the suit as well as the applications have been filed consequent to the first respondent infringing the trade mark 'Daystar' which is a registered trademark of the Appellant in India. The appellant has been distributing the Daystar Network Television Channel pursuant to an agreement dated 01.05.2007 with the first respondent. The appellant also hold a statutory licence having been issued on 15.02.2008 which was extended up 14.02.2012 under the provisions of the Cable Television Network (Regulations) Act, 1995 to downlink the channel in India and it is an exclusive licence. The appellant has been issued with such exclusive license in view of the TRAI regulations which stipulates that only an Indian company can obtain such a license. The respondents, being a company incorporated in the United States is ineligible to hold such a licence. The appellant had worked hard to promote the network across the Country, but the first respondent simply terminated the agreement by a communication received on 29.04.2011 without any reasonable cause. The agreement came to be cancelled purportedly due to some internal differences in the management in United States due to which Mr. Janice Smith, the former Vice President, who was responsible for entering into the agreement with the appellant had to leave the company following an unchristian scandal. The Federal Communication Commission in United States has launched an investigation into the irregularities committed by the first respondent in the management. Under those circumstances, the attempt of the first respondent to downlink the channels through the second respondent, who does not have a statutory licence, which is mandatory, is clearly violative of the provisions of the Cable TV Regulation Act and the guidelines issued by TRAI. The learned single Judge, without appreciating the above said aspects dismissed the applications filed by the appellant on the ground that the agreement has been terminated by the first respondent. When the appellant holds a statutory licence, the respondents are legally barred from downlinking the channel without a license. The learned Judge also erred in holding that although the first respondent is the registered owner of the Trademark 'Daystar', the first respondent had prior use of the mark, ignoring the established legal position that prior use should be in India and not in abroad as Trade Mark has only the territorial right. Moreover, the learned Judge has conflated the product (Television Programmes) https://hcservices.ecourts.gov.in/hcservices/ with the Trade Mark ignoring the fact that the Trademark is an independent species of the property. The very character of intellectual property is that it is independent from the product which it represents or indicates. 9. We have heard the learned Senior counsel for the appellant as well as the learned counsel for the respondents. 10. The learned Senior counsel for the appellant would mainly contend that the appellant company was incorporated in India, the trade mark of the appellant company was registered in India and therefore, the appellant is the absolute owner of the company as well as the trade name. While so, the first respondent cannot deal with the trade mark or the business name of the appellant in India and consequently, the permit given to the second respondent by the first respondent, to telecast in India the Daystar Television Channel, is illegal. In fact, the main contention of the learned Senior counsel for the appellant was that period of the agreement entered into between the appellant and the first respondent has not expired and therefore, the first respondent is estopped from unilaterally terminating the agreement. The learned Senior counsel for the appellant goes to the extent of arguing that the agreement with the appellant cannot be terminated by the first respondent as the appellant is the registered owner of the trade mark and so long as the registration continues, the first respondent has no legal right to terminate the contract. As proprietor of the registered trade mark, the appellant has every right to utilise the registered trade name. The learned Senior Counsel for the appellant also contends that the learned single Judge erred in construing the dispute as that of an action for passing off, whereas, what is questioned by the appellant is infringment of their registered trade mark by the first respondent. The learned Single Judge further erred in ignoring the fact that there is no reason assigned by the first respondent to terminate the contract. Inasmuch as there is no breach of contract and in the absence of any pleading made by the first respondent regarding the same, the learned single Judge ought not to have dismissed the applications filed by the appellant. 11. On the contrary, Mr. Satish Parasaran, learned counsel for the first respondent would contend that the first respondent commencd the television channel even in the year 1993 itself and in the year 1997, the second channel was opened by them which is collectively called as Daystar Television Network. Even in the internet, the name of the first respondent has been registered under the domain name "www.daystar.com" in the year March 1995. Earlier, the first respondent entered into agreements with one Michael Jeba Prabhu and he was appointed as Indian representative for the first respondent from 2004 till November 2005. As per the then regulation, there was no requirement for getting prior approval or licence from the Government authorities for mere downlinking of television channel from the satellite and broadcasting the same in India. In fact, the appellant Jasper New Prabhu only approached the first respondent from 2004 onwards and expressed his willingness to work as a representative of the first respondent in India. In fact, the said Mr. Jasper New Prabhu offered his service as true service to God and at free of cost. Later on, since the earlier Indian representative https://hcservices.ecourts.gov.in/hcservices/ was not functioning properly, the contract with him was terminated and the appellant was appointed as Indian representative by the first respondent. It is pertinent to point out here that the appellant was only authorised to represent the first respondent in India. It is also pertinent to mention here that even prior to the appointment of the appellant, right from the year 2004, Daystar India was broadcasting television channel in India through their representatives appointed from time to time. Therefore, Daystar Channel was available in India and the trade name as well as the trade mark were in existence in India even prior to the formation of the appellant company and the registration of the appellant trade name. Even under the grounds of prior user, since the television channels of the first respondent are being telecast in India even prior to the incorporation of the appellant company, the contention of the appellant that as a registered proprietor, the first respondent cannot use the appellant's trade name is immaterial. Furthermore, it is the first respondent which has permitted the appellant company to use their name in their business and also directed the appellant to register their trade name to suit to the needs of the Law of the Country, which has since been amended. Under those circumstances, the contention of the appellant, at this stage, that as a registered user, they cannot be prohibited from using the trade name of the first respondent as long as their trade name is not cancelled by the authorities concerned is untenable since the very use of the trade name of the first respondent by the appellant is only pursuant to the permission granted by the first respondent. 12. The first respondent company, even way back in May 2006, had clearly indicated to the appellant that the formation of the Indian entity and related business should be done for the telecasting of their channel.