* THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY + Civil Miscellaneous Appeal No.1026 of 2009 % 11-11-2009 Between: # Ashwini Chemical Works …Appellant VS. $ 1. Aswini Homeo Pharmacy & Anr. ..Respondents ! COUNSEL FOR APPELLANT: MR. E.HEMAPRAKASA RAO ^COUNSEL FOR RESPONDENTS: MR. E.MADAN MOHAN RAO < Gist: > Head Note: ? CITATIONS: 1) 2007 (35) ptc 265 (Del.) 2) 1997 (2) ALT 391 3) AIR 1987 Delhi 353 4) AIR 1994 Delhi 239 5) AIR 1985 All. 242 6) AIR 1970 S.C. 146 7) AIR 1965 S.C. 980 8) (2007) 6 SCC 1 9) (1996) 5 SCC 714 THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY C.M.A.No.1026 of 2009 Dated:11th November, 2009 Between: Ashwini Chemical Works ..... Appellant AND 1. Aswini Homeo Pharmacy & Anr. .....Respondents *** THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY C.M.A.No.1026 of 2009 JUDGMENT: This Civil Miscellaneous Appeal is directed against the order dated 09.06.2009 passed in I.A.No.1577 of 2009 in O.S.No.256 of 2009 on the file of the Chief Judge, City Civil Court, Hyderabad, whereby and whereunder the learned Chief Judge allowed the application filed by the plaintiffs under Order 39, Rules 1 and 2 of the Code of Civil Procedure and thereby made the ad interim injunction granted on 23.04.2009 as absolute. 2. Background facts in a nutshell leading to filing of this C.M.A. by the defendant in O.S.No.256 of 2009 on the file of the Chief Judge, City Civil Courts, Hyderabad, are: The respondents herein are the plaintiffs in O.S.No.256 of 2009. The 1st plaintiff is M/s.Aswini Homeo Pharmacy, rep. by its Proprietor Sri B.Ch. V.Subba Rao @ Aswini Subba Rao and 2nd plaintiff is M/s.Aswini Pharmaceuticals, rep. by its proprietrix Smt.Maheshwari W/o.B.Ch.V.Subba Rao, through their G.P.A. Holder Sri B.Anil Kumar, who is no other than their son. Ashwini Chemical Works is the defendant in the suit and it is represented by its Proprietor T.Bala Mahesh. B.Ch.V.Subba Rao established a factory for manufacture and sale of homeo hair oil and named the product as ASWINI HOMEO HAIR OIL and his business as ASWINI HOMEO PHARMACY and obtained all licenses and permission from the authorities concerned. He expanded the business and in the process, he commenced ASWINI PHARMACEUTICALS in the name of his wife Smt.B.Maheswari. The plaintiffs introduced several products from time to time. The products manufactured are hair oils, bath powder, coconut oil, muscle oil, tooth powders, shampoo, cosmetics, diabetic atta food items, medical products etc. They have been marketing their products under brand name ‘ASWINI’. According to them, the brand name ASWINI became a household name of their family in the general public and the general public and traders started calling the founder B.Ch.V.Subba Rao as Aswini Subba Rao. Thus, the brand name became the surname and household name of the founder Sri B.Ch.V.Subba Rao. The petitioner applied for and obtained valid certificates from the Trade Marks Registry on 06.10.1992 vide No.657936 as per the provisions of the Trade Marks Act, 1999. They obtained several trade mark certificates for different goods and services under Class 3, 5, 30 and 35 of Schedule IV of the Trade Marks Act, 1999. They have four units in the manufacture of products, branch offices in 7 States and 600 distributors. They also obtained trade mark in 2007 vide Certificate No.2460497 with an intention to export the products to foreign countries. As of now, their products got market not only in India, but also in foreign countries such as Singapore, Malaysia, Sri Lanka and Dubai. Whileso, according to them, in the month of August, 2005, their Sales Executives came across one detergent cake in the name of ASHWINI. They got issued notice to the defendant, who has been marketing its products under brand name ASHWINI. The defendant got issued a reply on 15.09.2005. The defendant is stated to have assured that he would withdraw the brand name ASHWINI and continue the other brand name SUPER9. In the month of May, 2008, the plaintiffs came to know that the defendant had applied for registration of trademark ASHWINI and therefore, they lodged opposition vide No.MAS 724991 to the application No.866449. But Registry of Trademarks rejected the opposition on the ground that the said opposition is filed beyond the period of limitation prescribed. The plaintiffs applied for registration of trademarks for several goods and proposed products. The defendant filed opposition vide No.730258 to the said application of the plaintiffs. According to the plaintiffs, the defendant is passing on the detergent cake under brand name ASHWINI so as to make it appear that it is the product of ASWINI group owned by them. The intention of the defendant, according to the plaintiffs, to reap the benefits from out of the goodwill and reputation of the ASWINI products. The plaintiffs filed the suit seeking the following reliefs: a) A PERPETUAL INJUNCTION be granted thereby restraining the defendant, his servants, agents, and or any other person or persons claiming through and or under him, from manufacturing, selling, offering for sale, advertising, directly and or indirectly dealing in and under the mark ‘ASWINI’ or any mark either phonetically and or visually identical or deceptively similar to the plaintiffs’ trademark ‘ASWINI’ and or from doing any other thing as is likely to lead infringement of the plaintiffs’ trade mark ‘ASWINI’ in Ashwini detergent cake and powder; b) A PERPETUALINJUNCTION be granted thereby restraining the defendant, his servants, agents and or any other person or persons claiming through and or under him, from manufacturing, selling, offering for sale, advertising, diretly and or indirectly dealing in and under the mark ‘ASWINI’ or any mark either phonetically and or visually identical or deceptively similar to the plaintiffs’ trademark ‘ASWINI’ i.e., Ashwini detergent cake and powder and or from doing any other thing as is likely to lead passing off of the goods of the defendant as that of the plaintiffs. c) COSTS of the suit be awarded; d) AND any other relief or reliefs to which the plaintiffs found entitled to maybe granted.” The plaintiffs filed I.A.No.1577 of 2009 under Order 39, Rules 1 and 2 CPC for grant of interim injunction pending the suit. A n ad interim injunction came to be granted on 23.04.2009 by the trial Court. 3. The defendant filed counter in I.A.No.1577 of 2009 resisting the claim of the plaintiffs. The counter filed in opposition to the temporary injunction application in brief is:- The defendant has been engaged in production of washing powder, cleaning powder and liquids and marketing the same under the trademark ASHWINI from the year 1998. The defendant applied for registration of trademark label under No.866448, which was published in the Trademarks Journal No.1381 (Regular) at page 86 inviting oppositions by the members of the public. Neither of the plaintiffs lodged opposition, but one Aswini Homeo and Ayurvedic Products Ltd. sought to oppose its registration, but the said opposition was rejected by the Trademarks Registry, Chennai and the mark of the defendant is allowed to go on in the register. The 2nd plaintiff applied for registration of Trademark ASWINI under No.1559260 on 16.05.2007. The mark was opposed by the defendant under opposition No.730258, which was pending disposal before the Trademarks Registry, Chennai on the date of filing of the suit. B.Anil Kumar, G.P.A. holder of the plaintiffs is not entitled to verify the plaint and to depose the averments contained in the affidavit in the absence of any documentary evidence. B.Ch.V.Subba Rao, proprietor of the 1st plaintiff concern has ever manufactured and marketed homeopathy medicines, which include homeo hair oil under the trademark ‘Aswini homeo hair oil’ under the trade name ASWINI pharmacy at any time from the year 1990. The trademark ASWINI was registered in the name of third parties independently and the search result generated from the date base of trademark registry reveals that the trademark ASWINI was not only registered in the name of several parties, but several applications are pending registration. Therefore, the claim of the plaintiffs that their trademark ASWINI has acquired distinctive character and reputation in relation to the products manufactured by them is false. Even otherwise, the goodwill and the reputation if any acquired in respect of a particular goods are confined to those goods only and that the reputation and the goodwill does not extend to the other goods. The plaintiffs have yet to commence manufacture of detergents. Whereas the defendant has been regularly manufacturing and selling its detergents under trademark ASHWINI from the year 1998. The defendant has been using the trademark ASHWINI for the detergents earlier, prior or anterior user of the mark than that of the plaintiffs. Under the provisions of the Act, the rights of an earlier user of a trademark are placed on a higher pedestal even than the rights of a registered proprietor of the same trademark in respect of the same goods. Under Section 28 of the Act, rights granted to the registered proprietor are subject to the other provisions of the Act, which include protection to the earlier user. Therefore, the plaintiffs cannot take advantage of registration of their trademarks, if any, in respect of the same or different description of goods and try to usurp the rights of the defendant to the trademark ASHWINI in respect of detergents. As per the search result generated from the date base of trademark registry, the trademark ASWINI does not belong to the plaintiffs. The trademark bearing No.657936 is TOWER filed by Bhasawkar Jainstral, P.O.Sainthia Dist., Biabhom in Class 3 in respect of soaps and washing powder and that the application was treated as abandoned. Since the plaintiffs approached the Court suppressing the material facts, they are not entitled to seek discretionary relief of injunction. The plaintiffs allowed the defendant to manufacture and market their products under trademark ASHWINI for their detergent cakes for over a decade or at any rate from 2005 when there was exchange of notices, which amounts to acquiescence of the plaintiffs in respect of the mark and therefore, the plaintiffs are estopped to file the suit at a belated stage. The balance of convenience is not in favour of the plaintiffs since the defendant has been using the trademark ASHWINI in respect of detergent cakes for over a decade and the plaintiffs have not started using of the mark in respect of the said goods. 4. Neither party chose to adduce any ocular evidence in support of their respective contentions before the trial Court. But, the plaintiffs marked 29 documents as Exs.P1 to P29 and the defendant marked 18 documents as Exs.R1 to R18 to substantiate their respective contentions. 5. The learned Chief Judge, on considering the material brought on record and on hearing the counsel appearing for the parties, came to the conclusion that the plaintiffs have satisfied essential ingredients for grant of temporary injunction restraining the defendant from using the trademark ASHWINI for their detergent cakes and thereby made the ad interim injunction granted on 23.04.2009 as absolute, by order dated 09.06.2009. The said order is assailed in this Civil Miscellaneous Appeal filed under Order 43, Rule 1 r/w.Sec.151 CPC. 6. Both the parties filed petitions to receive certain documents as additional evidence on their behalf. The said applications being CMP No.1940 and 1935 of 2009 came to be allowed on 02.11.2009. More precisely, CMP No.1940 of 2009 is filed by the respondents/plaintiffs and whereas CMP No.1935 of 2009 is filed by the appellant/defendant. The additional documents received on behalf of the respondents/plaintiffs are marked as Exs.P30 and P31 and the additional documents received on behalf of the appellant/defendant are marked as Exs.R19 to R23. At this juncture, I deem it appropriate to give the details of the documents received as additional evidence on behalf of the parties. Ex.A30 is the Photostat copy of the entry in the register of Trade Marks relating to registration of Trade Mark No.597262 in respect of hair oil and all other goods included under class 3. Ex.A31 is the Photostat copy of the entry in Register of Trade Marks relating to Registration of Trade Mark No.1559259 in respect of Bleaching preparations and other substances for laundry use etc. included in class 3 issued on 13.02.2009. Ex.R19 is the Photostat copy of the certificate of registration, bearing No.825785, dated 18.08.2009 issued by the Registrar of Trade Marks. Ex.R20 is the Photostat copy of Certified Copy of the certificate issued by the Registrar of Trade Marks, dated 09.09.2009. Ex.R21 is the Copy of the order of the Trade Marks Registry bearing No.TLA/16728, dated 03.09.2003. Ex.R22 is the Office copy of the letter sent on behalf of the appellant/defendant to the Registrar of Trademarks, dated 15.07.2003, and Ex.R23 is the office copy of the application filed by the predecessor in title of the appellant/defendant together with an additional representation returned by the Trademarks Registry allotting No.866446, dated 16.07.1999. 7. Heard Sri K.Hemaprakasa Rao, learned counsel appearing for the appellant/defendant and Sri E.Madan Mohan Rao, learned counsel appearing for the respondents/plaintiffs. 8. Learned counsel appearing for the appellant/plaintiff submits that the appellant/defendant has been manufacturing and marketing detergent cakes with trademark ASHWINI since 2003 after acquiring right over the trademark under a deed of assignment executed by ASHWINI CHEMICAL WORKS, a proprietary concern of K.Srinivas and K.Venkatesh, who have conceived, coined and adapted ASHWINI as a trademark in respect of washing powder, cleaning powder and liquid as early as in 1998. The appellant/defendant got substituted its name in the application filed before the Registrar of Trademarks, Chennai with application bearing No.866448, dated 19.07.1999, and the Trademarks Registry recognized the assignment and issued certificate on 18.08.2009 and therefore, the appellant/plaintiff became the proprietor of trademark ASHWINI with a particular device since the date of filing of the petition i.e., 19.07.1999. The learned counsel took me to the certificate issued by the Registrar of Trademarks, on 18.08.2009 along with its enclosures, which contain particulars such as date of filing the application, date of registration and the date of issuance of the certificate, trademark type, word mark and device. As per the certificate, the word mark is ASHWINI and the device is running horse with a divine woman thereon. The learned counsel would contend that the trademark ASWINI which has been claimed by the respondents/plaintiffs has been used by good number of persons in which case the respondents/plaintiffs cannot claim to be the exclusive users of the said trademark. Learned counsel refers the copies of the search reports with regard to trademark ASWINI, which have been filed along with the material paper book running from Pages.45 of 93. It has been strenuously contended by the learned counsel that the appellant/defendant has been manufacturing detergent cakes and trading the same with trademark ASHWINI and whereas, the respondents/plaintiffs have not yet commenced manufacturing detergent cakes and in which case there is no question of confusion among the consumers. He would also contend that temporary injunction pending the suit against the appellant/defendant not only deprives the appellant/defendant from carrying on the business in detergent cakes, but also deprives the livelihood of good number of persons who have been engaged by the appellant/defendant in the manufacturing and marketing detergent cakes. The learned counsel referred various provisions of the Trademarks Act, 1999 laid much emphasis that the respondents/plaintiffs’ trademark is not a well known trademark as defined under the Act and in which case, temporary injunction granted by the learned Chief Judge restraining the defendant from using the trademark ASHWINI to the detergent products is unsustainable. Learned counsel contended that the respondents/plaintiffs knowing fully well at least from the year 2005 onwards did not raise any objection for the appellant/defendant in using the trade mark ASHWINI and inaction on the part of the respondents/plaintiffs amounts to their acquiescence for the use of the trademark ASHWINI by the appellant/defendant for its detergents. The respondents/ plaintiffs are doing business in products other than that of the appellant/defendant and since there is no similarity between the two products, there is no question of customers being mislead or misguided or get confused. He would further contend that the investigation made by the appellant/defendant has revealed that there are more than 8 units, which have registered their trademark ASWINI. It is contended by the learned counsel that the trail Court having observed in para.7 of the impugned order that goods sold by the plaintiffs and defendant are different, committed serious error in injuncting the appellant/defendant from using the trademark ASHWINI for its detergent cakes. He also contended that there are number of inconsistencies in the certificates placed on record by the respondents/plaintiffs. The inconsistencies pointed out by the learned counsel appearing for the appellant/defendant are in respect of trademark numbers. At page 17 of the material papers filed by the respondents/plaintiffs, the trademark number is shown as 597262/B. Whereas, the trademark number shown in page 54 of the material papers as 597262. Under the heading goods and descriptions stated as hair oil and all other goods included under class 3. Whereas, under trademark No.597262, the description of the goods stated as hair oil included in class 3. By pointing out the discrepancies in the registration number and goods and descriptions, the learned counsel contended that they are fabricated for the purpose of this case. In support of his contentions, reliance has been placed on the following decisions: 1) Canon Kabushiki Kaisha v. B.Mahajan & Ors.[1] 2) M.Mahender Shah v. Tiruchy Flour Mills, Trichy[2] 3) M/s.Hindustan Radiators Co. v. M/s.Hindustan Radiators Ltd.[3] 9. Per contra, learned counsel appearing for the respondents/plaintiffs submits that the respondents/plaintiffs are the proprietary concern and all the proprietors are the family members of B.Ch.V.Subba Rao, who have coined the word ASWINI and got registered the trademark in respect of various products, manufactured and marketed and the said B.Ch.V.Subba Rao has been called as Aswini Subba Rao by the general public and the trade name ASWINI has become the household name of the family of B.Ch.V.Subba Rao. The brand name ASWINI and the product obtained a particular recognition, goodwill, un-believable reputation and distinctiveness and the same are associated exclusively with the plaintiffs and the said mark connote and denote to all its users, customers and general public at large, the connection with the plaintiffs and none else. The learned counsel submitted that the trademark of the appellant/defendant ASHWINI is deceptively similar in sound as that of the trademark of the respondents/plaintiffs i.e. ASWINI. There is any amount of confusion among the customers and every likelihood of the customers believe that the detergent cake marketed by the appellant/defendant in the name of ASHWINI as that of respondents/plaintiffs. The resemblance between the two marks must be considered with reference to the ear as well as eye. There is a close affinity of sound between ASHWINI and ASWINI. It is also submitted by the learned counsel that the principle of similarity cannot be very rigidly applied and if it is prima facie shows that there was dishonest intention on the part of the defendant in using the trademark and the mere delay in bringing the matter to the Court is not a ground to defeat the case of the plaintiffs. He would also submit that the appellant/defendant intends to trade upon the goodwill, name and reputation of the respondents/plaintiffs, which the plaintiffs have built-up during the last 20 years and the conduct of the appellant/defendant in branding their product as ASHWINI is fraudulent. In support of his submissions, reliance has been placed on the following decisions: 1) Daimler Benz Aktiegesellschaft v. Hybo Hindustan[4] 2) Bata India Ltd. v. M/s.Pyare Lal & Co.[5] 3) K.R.China Krishna Chettiar v. SriAmbal & Co. & Anr.[6] 4) Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories[7] 5) Heinz Italia & Anr. v. Dabur India Ltd.[8] 6) N.R.Dongre & Ors. Whirlpool Corporation & Anr.[9] 10. At the outset it must be pointed out that I am presently concerned only with the proceedings for ad interim injunction claimed by the plaintiffs under Order 39, Rules 1 and 2 CPC. I am accordingly, confining myself to the limited aspect only, with large issues left open for decision in the suit. 11. The trademark law in India has undergone drastic reforms resulting in the repeal of the Trade and Merchandise Act, 1958, by the Trademarks Act, 1999. This Act of 1999 came into force from September, 2003. The new Indian Trademarks Act, 1999, makes the Indian law at par with the international standards. The new Act recognizes service marks. It has done away with the system of maintaining registration of trademarks in part A and part B with different legal rights, and to provide only single register with simplified procedure for registration and with equal rights. The concept of well- known trademarks is introduced. To streamline and simplify the procedure of registration, it is now made possible to file one single application for registration of mark in different classes of goods and services. The initial term of protection is also enhanced from the previous 7 years to 10 years. The new Trademark law has also broadened the definition of trademarks to include shape of goods and combination of colour and it provides for registration of collective marks owned by associations etc. The basic requirement for a mark to be registered as a trademark is that it should be distinctive, capable of graphical representation, capable of distinguishing the goods or services as originating from a particular source from that of other similar goods and that mark should not be functional in nature. A mark may include any word, logo, device, branch, ticket, signature, name, shape, packaging, and combination of colours or any combination thereof. Traditionally word marks, symbols or logos were registered as trademarks. 12. In an action for passing off, the plaintiff has to establish prior user to secure an injunction and the registration of the mark or similar mark in point of time is irrelevant. Modern tort of passing off has five elements i.e., 1) a misrepresentation; 2) made by a trader in the course of trade; 3) to prospective customers of his or ultimate consumers of goods or services supplied by him; 4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence), and 5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so. - vide Heinz Italia & Anr. v. Dabur India Ltd (7 supra). 13. The order impugned in this C.M.A. was passed on 09.06.2009. Subsequent to the passing of the order, the appellant/defendant obtained certificates from the Trademarks Registrar on 18.08.2009 for trademark ASHWINI in respect of washing powder, cleaning powder and liquids. The said certificate has been marked as Ex.R.19. The 1st respondent/1st plaintiff obtained certificate dated 20.07.2009 with trademark ASWINI in respect of goods and descriptions, such as hair oils and all other goods included in Class 3. The 2nd plaintiff/2nd respondent obtained certificates dated 09.07.2009 with trademark ASWINI in respect of goods and descriptions, such as, Bleaching preparations and other substances for laundry use; cleaning, polishing, scouring and abrasive preparations; soaps; perfumery, essential oils, cosmetics, hair lotions dentifrices, cosmetics kits, flower perfumes, hair colourants, hair waving preparations, jasmine oil, jelly (petroleum) for cosmetic purposes, make up powder, makeup removing preparations, face masks, oil for cosmetic purposes, rose oil, skin care, skin whitening creams, bleaching soda, stain removers, talcum powder, for toilet use, varnish (nail), washing preparations, toilet soap, liquid blue, tooth paste, mouth freshener, detergent soap, detergent powder, face cream, essential oils, flower extracts, hair dyes, hair lotions, hair spray, deodorants, lip sticks, nail polish, make-up preparations, mouth washes, eye brow cosmetics, eye brow pencils, eye-lash (cosmetic preparations), role oil, rust removing preparations, polishing wax, perfumes, almond oil, almond soap, boot cream, boot polish, cosmetic preparations for slimming purpose design fact an soap, false hair, false nails, false eye lashes, face powder, tooth powder, cosmetics for animals, medicated soap, shaving cream, shaving gel, shaving soap, after shave lotion, softeners cloths, starch, stain remover,