1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY & ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 884 OF 2009 WITH NOTICE OF MOTION NO. 1972 OF 2009 IN SUIT NO. 1399 OF 2009 Nandi Imports LLC, USA. ... Plaintiffs. V/s. Marvel Candles Manufacturing Pvt. Ltd. & Ors. ... Defendants. Mr. Sanjay Kher a/w. Ms. Bijal Trivedi i/b. Bhagwati & Co. for the Plaintiffs and in support of Notice of Motion 1972/09. Mr. Vallabh Sawana for the Defendants and in support of Notice of Motion 884 of 2009. CORAM : S.C. DHARMADHIKARI,J. DATED : 4th DECEMBER 2009. P.C. :- The Plaintiffs have filed the Suit for a permanent injunction restraining the Defendants by themselves, their Directors, employees, servants, agents, franchisee and all persons claiming through them from using in any manner the trade marks NAG CHAMPA or NAG CHAMPA SPA COLLECTION or any other mark containing the said words in respect of the candles which are manufactured by the Defendants. The other permanent injunction that is claimed is with regard to the user of the trade mark label with or without the words NAG CHAMPA. There are further injunctions claimed with regard to production of the knowhow and the packaging. 2 2. In terms of this final relief, the prayer for interim reliefs has been made. 3. It is the case of the Plaintiff that they are a limited company registered and incorporated in the U.S.A. They are a leading Importer/Seller/Exporter of a range of goods since 1974. They were carrying on business of marketing and selling of high quality perfumed candles, incense sticks, etc. The Plaintiff’s goods are marketed under the trade mark NAG CHAMPA SPA COLLECTION. In the plaint, the distinctive colours, the artistic form, etc. has been referred to and it is stated that they have acquired wide and immense reputation and goodwill in this business. 4. It is the case of the Plaintiff that the First Defendant is a manufacturer of a candles, incense sticks, etc. under a licence from the Plaintiff. He has been manufacturing and supplying on a turn key/contract basis the goods for and on behalf of the Plaintiff. That is the averment in paragraph 2 as far as Defendant No.1 is concerned. The Second Defendant is also manufacturer of candles, incense sticks, etc. and is a closely connected with the First Defendant. They have a common promoter namely the Third Defendant. As far as the Fourth Defendant is concerned, it is stated that it is a company incorporated under the laws of Australia which is involved in the marketing and sales of the candles, incense sticks, etc. The Plaintiff state in paragraph 7 onwards that from 1974 they have been in the said business and built up a reputation for 3 themselves. They have commenced the business of marketing and selling high quality perfumed candles since 2004 under the trade mark NAG CHAMPA and NAG CHAMPA SPA COLLECTION. In paragraph 7(b) they have referred to the creation of the design, the word mark, the original artistic devise trade mark and trade mark labels bearing the aforementioned names. They have annexed the relevant documents including a copy of the assignment deed, specimen of the trade mark and device. On that basis, it is contended that the Plaintiffs have an exclusive right to publish, reproduce and use artistic trade mark label. 5. In or about October 2004, the Plaintiff applied for and secured in the State of California (USA) registration certificates. 6. In 2007-2008 the Plaintiff applied for registration in India of the trade marks, details of which are set out in Annexures F-1 to F-7. The list of the product marketed and sold is annexed as Annexure ‘G’. The Plaintiff has stated that they had spent considerable money, time and efforts to develop and identify unique combination and composition of various fragrances and other ingredients. The same are their trade secrets. 7. It is stated that in or about February 2006, the Plaintiff met the Third Defendant at an exhibition in New Delhi, where the Third Defendant inter-alia represented to the Plaintiff that 4 he was a Director holding controlling interest in the First and Second Defendant – Companies and consequently, had the technical capability to manufacture the products in accordance to any formula provided by the Plaintiff. The Third Defendant also met and agreed to manufacture the product on turnkey basis. The specific case of the Plaintiff is that the Defendants agreed in manufacturing, procuring the material required for product and also printing and affixing the labels thereon. 8. That is how, the Plaintiff appointed the Defendants as contract manufactures and the documents in that behalf are annexed as Annexures H-1, H-2 and H-16. The manufacturing activity is commenced in March 2006 and the details pertaining thereto are set out in paragraphs 8 and 9 of the plaint. 9. It was learnt by the Plaintiff thereafter that from August 2007, the Defendants’ offered candles, incense sticks, etc. which are in the same range as that of the Plaintiff, unauthorizedly. The list of the products manufactured and offered for sale by the Defendants are at Annexure ‘K’. The enquiries revealed that it was the products marketed by the Fourth Defendant, were being manufactured and supplied from India by Defendant Nos.1 to 3. Thereupon, the Plaintiff came across the literature. On the literature that the Plaintiffs have based their averments in paragraphs 16 to 19 of the plaint. In paragraph 20 they have stated that the word marks, 5 label marks and copy right in the original artistic device has been infringed so also there is an abuse of the secret/confidential information. It is on the aforementioned pleas that the Plaintiff’s claim the permanent injunction and by stating that the Third Defendant had in a E-mail dated 28th September 2007 admitted the un-authorized dealings and even offered to compensate the Plaintiff. There are cease and desist notices in furtherance of which the Suit has been filed. 10. The Notice of Motion was moved by the Plaintiff and copies were duly served on all the Defendants. The matter was placed for ad-interim reliefs before this Court firstly before the Vacation Judge on 23rd December 2008, who directed notice to be issued to the Defendants. Thereafter, the matter appeared on 10th February 2009 and this Court made an ad-interim order in terms of prayer clauses (a) to (f) of the Motion. The Notice of Motion is listed for final hearing and has accordingly been placed before the Court. 11. Another Notice of Motion was moved being Notice of Motion No.884 of 2009 and that is by the Defendants for vacating the ex-parte ad-interim order dated 10th February 2009. 12. Both Motions have been placed for hearing and final disposal after affidavits have been filed. 13. Defendant No.3 has filed an affidavit in his capacity as a 6 Director of Defendant Nos.1 and 2 so also in his individual capacity. He states that there is no substance in the allegations made by the Plaintiff and more particularly, with regard to the user of the word NAG CHAMPA and NAG CHAMPA SPA COLLECTION. In the affidavit, which has been affirmed on 16th January 2009, it has been stated that the First Defendant has wound up its candle manufacturing unit four months before intimating to the Assistant Commissioner of Excise of its intention. Annexure ‘A’ to this affidavit in reply is referred to and it is then stated that the First Defendant has wound up the manufacturing unit M/s. Marvel Candles Manufacturing Limited. He then stated that the manufacturing unit of Defendant No.2 is concerned with different kind of Agarbatties which is not the subject matter of the dispute. As far as the business of Defendant No.3 is concerned, it is engaged in the Real Estate business immediately after completion of the contract with the Plaintiff in the month of October 2007. It is stated that thereafter, the Plaintiff began to obtain the goods from some other manufacturer. It is stated that the goods available in the market are not belonging to the Defendants. The Third Defendant specifically denies that the Defendants are manufacturing product bearing the mark NAG CHAMPA SPA COLLECTION without any authorization by the Defendants, at any point of time. It is stated that the Defendants are the original owners who have invented all the confidential information, during 40 years long period, in the past. 7 14. However, the Defendants admit that the Plaintiff saw the products in the exhibition held at Delhi and offered the Defendants to manufacture the goods bearing their trade mark NAG CHAMPA SPA COLLECTION. The Defendants deny that the Defendants had unauthorizedly, dishonestly and fraudulently adopted and used the NAG CHAMPA AND NAG CHAMPA SPA products. 15. It is asserted that no one is entitled to claim exclusive right towards the words NAG CHAMPA. The advertisement published in the Trade Mark Journal is relied upon. It is stated that in addition to the Plaintiff, there are 20 other people in California, 9 people in Australia at 300 locations also dealing with the products bearing the trade mark NAG CHAMPA. 16. The statement in paragraph 4 of the reply and more particularly is that “at this point I say that the business carried on by the Plaintiffs and the Defendants are totally distinct and separate and the question of the Defendants using the name and Passing off of the trade mark and infringement of the copy right and misappropriation of confidential information and dilution of the Plaintiffs registered trade marks in respect of the products, items, etc. in which the Plaintiffs are carrying on business does not and cannot arise”. The Defendants have thereafter asserted that they came in the business of manufacturing the subject products in the year 1958. Since 40 years that they have been carried on business, they discovered various formula for products in question. Their 8 case is it was the Plaintiffs who asked for their samples and adopted the formula subsequently. These are the statements that are made in paragraphs 5 and 6 of the affidavit in reply. In paragraph 11 of the affidavit, this is what is stated :- “11. With reference to paragraph 10,11 and 12, I deny the allegations made out in the affidavit that Defendant Nos.1,2 and 3 are exporting the goods from Mumbai. I once again repeat that Defendant No.1 had wind-up (shut down) its manufacturing unit Marvel Candle Mfg. Pvt. Ltd. (candle manufacturing unit) in the month of March, 2008. The Defendant No.2 manufacture only scented agarbatties and out of the question of the disputed product in question. I further deny the contention that the service of notice will defeat the purpose of filing the suit. The Defendants were stop the business as and when goods ordered by you delivered to the Plaintiffs i.e. on October 1, 2007. You were sent a cease and desist notice in the January 21, 2008, and the Plaintiffs has filed the Suit in 23rd December 2008 without service of notice. This shows gross delay on the part of the Plaintiff to take legal action.” 17. The Plaintiffs have also invited my attention to the affidavit in reply of Defendant No.4 wherein identical pleas are raised as that of the other Defendants. 9 18. An additional affidavit of Defendant Nos.1 to 4 in which it is stated that the manufacture of Incense Sticks and Candles has been undertaken in 1998 in Navi Mumbai. The deponent states that the factory is custom Bonded Export Oriented. It can import all raw materials duty free. The Defendants imported NAG CHAMPA fragrance for the first time from their regular supplier by forwarding an invoice and certificates are annexed. Thereafter, it is stated that Defendant No.4 has continuously been importing NAG CHAMPA products in Australia from Indian manufacturer since 2003. Then it is stated that the name NAG CHAMPA AND NAG CHAMPA SPA COLLECTION is common name of candle, perfume and agarbatties since last 30 years. It is stated that the first name NAG indicates the name of snake and CHAMPA is a flower. It is a combination of two words and it cannot be registered. Thereafter, registration certificates of several parties have been referred to in this affidavit. In paragraphs 11 and 13 of this affidavit, the deponent states thus :- “11. I say that the word NAG CHAMPA is registered in Australia. Hereby marked and annexed Exhibit I is the copy of the Certificate issued by the trade mark registry, Australia. 13. I say that in 2nd week of February 2006 the Plaintiff visited my booth in Trade Fair and selected about 12 of our products of NAG CHAMPA FRAGRANCES. Thereafter, I sent them my photo 10 offer and samples. Hereby marked and annexed Exhibit J is the letter dated 23rd February 2006 and Exhibit K is the letter sent by me to the Plaintiff. Later on the Plaintiff introduced us to their designer company in Banglore called SOLUS. Hereby marked and annexed Exhibit L is the copy of list of product with code numbers. This letter from SOLUS very clearly states a list of all our items CHAMPA FRAGRANCE in them. The Plaintiff is passing off my items as their. Only artwork for label was designed by SOLUS but all items / formulations were ours. Hereby marked and annexed Exhibit L1 and L2 are the product catalog published in the year 2001 and 2005 respectively which shows that products belongs to me. The Plaintiff has got all our items duplicated and is getting them produced in Banglore Company WELLBURN.” 19. My attention is also invited to the written statement which is filed on behalf of Defendant Nos.1 to 4. Therein, a plea is raised that the word NAG CHAMPA and NAG CHAMPA SPA COLLECTION are commonly used and nobody has exclusive rights in respect thereof. The instances of fragrance, agarbatti makers, various traders dealing in NAG CHAMPA products are then cited and the written statement deals with the plaint averments. However, it is stated that it is true that in or about February 2006, the Defendants started business dealing with the Plaintiff. 11 20. My attention is also invited by Mr. Kher, learned Advocate appearing on behalf of the Plaintiff to the Internet clippings and it is his contention that despite this Court passing an ad-interim order in terms of prayer (f), Defendant No.4 has been importing the products under the same trade mark label with identical get up and colour scheme. The products are available. The Plaintiffs’ grievance is that there is a clear breach and violation of the orders and directions of this Court. This is deliberately done despite the statements made on oath with regard to the business and manufacturing activities being not identical and in any event having come to an end. Mr. Kher submits that this is a fit case where this Court should confirm the ad-interim order and also direct initiation of contempt proceedings. 21. On the other hand, the learned Counsel appearing on behalf of the Defendants has urged that the Defendants have pointed out as to how the Plaintiffs’ case cannot be accepted even prima-facie. The Plaintiffs are claiming to be exclusively using and entitled to the label mark and the word mark in question. However, it is in common use. There are several manufacturers having registration certificates and in any event are dealing with these products and it cannot be said that the Plaintiffs have devised label marks or the word mark of their own. In these circumstances and for the reasons set out in the affidavit, additional affidavits and the written statement, the motion be dismissed. 12 22. With the assistance of the learned Counsel appearing for the parties, I have perused the plaint and the annexures therein so also the affidavits on record, the Plaintiffs have applied for interim reliefs in the Suit where they have sought permanent orders and injunction to restrain the Defendants from using in any manner the trade mark labels and the trade mark so also the confidential information/trade secrets. They have approached the Court by pointing out that they have a registration abroad in their favour with regard to the mark NAG CHAMPA SPA COLLECTION in class 3 and 4. Further, they have applied for registration in India of trade marks. The essential foundation, according to the Plaintiffs of their claim in the Suit, is preventing passing off. They have a copy right in their favour in respect of the artistic work. Therefore, they are not claiming any wider reliefs as is apprehended by the Defendants. Since the Plaintiffs have no Registration in their favour in India, obviously, they are not entitled to a relief, which cannot be claimed in the absence of the registration. They are claiming such reliefs as are permissible in law and for which the registration is not pre-requisite. The Plaintiffs can apply, and merely because their application for the registration is pending, does not mean that they cannot prevent passing off. Mr. Kher, learned Counsel appearing on behalf of the Plaintiffs states that although the prayers may be widely worded, this Court should appropriately clarify so that the Defendants are restrained from passing off their goods as that of the Plaintiffs. Further, they should not be infringe the Plaintiffs’ copy right in the labels in respect of 13 candles and similar goods. I have reproduced the statement in the affidavit in reply, the additional reply only with a view to point out that the Defendants have not even prima-facie shown as to how they could use the mark and the label in question. Merely stating in the affidavit that there are others in the market is not enough. The Plaintiffs have come out with a specific case which has to be met by the Defendants by pointing out even at this prima-facie stage with necessary details as to how NAG CHAMPA and NAG CHAMPA SPA COLLECTION are common names and used by several importers. The affidavit in reply does not contain anything save and except statements wherein the Defendants seem to suggest that they are no longer in the market. That is a claim which is made after asserting that the Defendants are in the business for more than 40 years. If they are in the business for more that 40 years and the marks are common, then, the Defendants ought to have produced something more and merely stating that there are several importers in the market is not enough. To my mind, the affidavits filed in reply do not make out any case for holding that the Plaintiffs are dis- entitled from the interim reliefs as claimed. 23. Once, the Plaintiffs’ case is dealt with by the Defendants by urging that they are in totally distinct and separate business, then, I do not see how in these very affidavits, the Defendants state that the words and labels are common to the market. This assertion is made after stating that Defendant No.1 has wound up the candle manufacturing unit. 14 Reliance is placed upon a letter dated 31st March 2008 addressed to the Assistant Commissioner of Central Excise, Belapur, Navi Mumbai. The licence of the unit expired in November 2007. The Plaintiffs state that Defendant No.1 Marvel Candles Manufacturing Pvt. Ltd. intimated that it wants to shut down the unit and D-bond. This is a letter addressed according to the deponent of the affidavit on 31st March 2008. However, at the same time he stated that manufacturing unit of Defendant No.2 is mainly concerned with production of different kind of Agarbatties. If there are distinct businesses and the products are not related, then, I do not see any justification for these statements. It is pertinent to note that at the same time, the Defendants admit that they have seen the Plaintiffs’ products at exhibition held at Delhi and offered the Defendants that they are ready for manufacturing the goods with trade mark NAG CHAMPA SPA COLLECTION. Once these statements are itself an admitted position, then, the position as admitted is also in relation to the marks and the label. A perusal of Exh.H-5 to the Plaint (E- Mails) would support my prima-facie conclusion. 24. Having perused the entire affidavit in reply and the additional affidavit, I am of the view that mere handing over of some compilation of documents is not enough. It would be necessary for the Defendants to produce the supporting materials and also to prove the contents of these documents. That would be only at the stage of trial. By handing over a compilation, the Defendants cannot urge that the Plaintiffs 15 should not be granted any interim reliefs. 25. In the affidavit in rejoinder, the Plaintiffs have pointed out that they are not aware that the First Defendant has wound up the candle manufacturing unit. While denying the case as set out in the reply, the Plaintiffs have asserted that they have a genuine case as against the Defendants and the Defendants bald statements should not be accepted at this stage. Each of the statements in the affidavits filed by the Defendants have been dealt with in the rejoinder and it is pointed out that the Plaintiffs’ interest in the Third Defendant was limited to the fact that the Third Defendant was a manufacturer of candles. The Plaintiffs have not accepted any of the statements made and have put the Defendants to strict proof of the same. Thus, the unsubstantiated claims of the Defendants at this stage cannot be accepted. 26. For the aforementioned reasons I am of the opinion and finding that no case is made out for vacating the ad-interim orders instead the Plaintiffs have made out a prima-facie case, the balance of convenience is in their favour and irreparable loss and injury would be caused to them as even today, Mr. Kher has pointed out some website details wherein the products with identical word and label mark are available in the market. They are being imported from the Fourth Defendant is the grievance, therefore, the Plaintiffs will suffer irreparable loss and injury if the ad-interim order is not confirmed. 16 27. In the result, the Notice of Motion succeeds and it is made absolute in terms of the ad-interim order dated 10th February 2009. (S.C. DHARMADHIKARI,J.)