* IN THE HIGH COURT OF DELHI + CS (OS) No. 860 OF 2004 % • Reserved On: 25.08.2005 Date Of Decision : 02.12.2005 M/S. N. RANGA RAO & SONS... ... PLAINTIFF through: Ms. Pratibha M. Singh, Advocate. - VERSUS- ANIL GARG & ORS. ... ... DEFENDANTS through: Mr. S.K. Bansal with Mr. Suwarn Rajan, Advocates. CORAM: HON'BLE MR. JUSTICE SANJAY KISHAN KAUL 1. Whether the Reporters of local papers may be allowed to see the judgment? 2. To be referred to Reporter or not? 3. Whether the judgment should be reported in the Digest?, SANJAY KISHAN KAUL. J. 1)The Colours of a rainbow are striking and universal. A combinationofcolourscreatesits own kaleidoscope. Acolouris not the propertyof any individual,but colourcombinationsused in aparticularpatternmay createidentificationwithaproduct. CS (OS)No. 860of2004 p^ggpio. 7of86 Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified <yC? 2) "What's in a name? That which we call a rose by any other name would also smell as sweet", said William Shakespeare. There is but still a tendency to copy the names because a rose is a rose. An amalgam of colour combinations, names and logos may create a total identification with a product and the allegation of copying the same has given rise to the present litigation. 3) The plaintiff is a registered partnership firm engaged in the business of manufacture of incense sticks or agarbathies. Initially, the business was established as a proprietorship concern in 1948 by the father of the present partners of the plaintiff firm and is stated to be now a part of the RANGSONS GROUP started by late Shri N. Ranga Rao. The diversified business now carried on by the Group is stated to not only include the business in questidii, but also other businesses like electronics and education, though theflagshipfirmof the Groupis remainthe plaintiffconcern. 4)The plaintiffinitiallyis stated to have adopted the brand-name CYCLE BRAND AGARBATHIES and CYCLE THREE-IN- ONE AGARBATHIwhich is stated to remain the largestselling brand of agarbathies in India. However, apart from the said brand, the plaintiffis also manufacturingnumberofother brands such as LIA, SANDALUM&CHANDANAM,PARAMPARA, INDIANBRIDE,PEHCHAN,CYCLEPOPULAR,ISHTA,ALL CS (OS)No. 860of2004 2 ry\ ^ IN 1, NR YAGNA, RHYTHM AMBER &ORIENT,BANSURI, MOODS, PRESTIGE, HONEY ROSE, FLUTE INIMAI & NAVIN, FAIRY TALE AND RAHASYAMAI. 5) The plaintiff claims to be a pioneer in the agarbathi industry with various innovating marketing techniques as also packaging. The plaintiff is, thus, stated to have inter alia introduced the concept of three fragrances in one pack, professionalise techniques for marketing and management, hexagonal and rectangular packaging. The plaintiff is stated to have won export awards both from Union of India and Government of Kamataka. 6) The plaintiff claims to be marketing its products all over India and spends money in creating consumer iiwareness and brand building. The Marketing and Sales Division under M/s. Prosperity Marketing Services (P) Ltd., Mysore is stated to ^ employmore than 250 salesand marketingpeopleand the amount spent on advertisementsalone for the financialyear 2002-2003is stated to be Rs.389.7 lakhs. 7)The plaintiffclaimsthatits strengthlies in makinginnovativeand originalbrandsof fragranceskeepingin mind the preferencesand requirementsof consumers across classes. Thus, some of the agarbathiproducts are more used during prayer or pooja, while othersare used for creatingambianceor atmosphere. Thesecater CS (OS)No. 860of2004 p^geMo. 3of86 ^ to differenttimes of the day or differenttypes of moods. In this process of innovation, one of the range of products, which was introduced by the plaintiff in the market is LIA range of products. This name is stated to have been adopted in 2001 and copies of some purchase orders have been filed for the relevant period, 8) The LIA range of agarbathies consists of variety of exclusive fragrances including ROSE LIA, FRESH / SEASHORE LIA, SANDAL / CHANDANAM LIA, JASMINE LIA, NATUI^'S GIFT LIA, VIBRANT / RAINBOW LIA, SPICE WORLD LIA, FRUIT LIA. 9) The rnark LIA is stated to be distinctive and arbitrary in nature as the word 'LIA' has no meaning. The word 'LIA' is also stated to be uncommon in agarbathi market where most brands are based on the name of Gods or words associated with worship and rituals. The word 'LIA' is, thus, stated to be extremely contemporaryand is claimed to have a sophisticatedring to it which sets it apartfrom otherbrandsin the agarbathimarket.One ofthe featuresofthe marketingofthese agarbathiesis statedto be the introductionof packs of 35 sticks range at Rs.l5/-. This packaging is stated to be distinctive as compared to most agarbathiesin the market sold in boxes of 20-22 sticks per box and offered@Rs.lO/-perbox. C5 (OS)No. 860of2004 p^geNo. 4of86 --4 V C^P? 10)The get-up and colour scheme of this range of LIA is stated to be distinctive and the packaging cartons are of different colours depending on each colour conjuring associations with the concerned fragrance. Despite this, there is a uniformity in the scheme of the base consisting of pastel shade softening to whitish towards the centre of the box where the logo / trademark of LIA is printed. The LIA trademark is written in sloping font at slightly upward angle with a line underscoring the word 'LIA'. The text regarding the name of fragrance, the brand-name of the product and the general effect and the fragrance is printed below the LIA logo. A motif of the plant / location associated with the fragrance is printed above the LIA logo. Small semi-circular and ribbon banners containing text are also printed on the eartons and on the side of the cartons,the brand-nameis printedin Devnagiii,Tamil, y Kannada, Telugu and Malayalamscripts. In view thereof, it is statedthatthe labelsare extremelyattractiveand eye-catchingand have gained enormousreputationin the market. The impact is compositeconsistingof the brand-nameLIA, the colour scheme of the cartonsand the variousshadesused for each fragrance,the labeling,the designlay-outas well as the uniqueprice range, as such the plaintiffclaims to own all the commonlaw rights in the LIA brand-nameand all the various productsin the said range. CS (OS)No. 860of2004 PageNo. 5of86 V The art work in lay-out plan of the cartons are stated to have been designed by professionals for the plaintiff firm and the rights are stated to vest in the plaintiff under Section 17 of The Copyright Act, 1957. 11)The plaintiff has set out in the plaint the registration details of the artistic works on the carton for several of the LIA range of products, which have been registered on 22.07.2003 for SANDAL, JASMINE, ROSE, SPICE, FRUIT AND FRESH LIA range. The plaintiff has also stated that an application is pending before the Trademark Registry for the mark and label LIA for agarbathies in Class 3. 12)In a short span of time of marketing of this product under LIA range, the same is stated to have become extremely popular and earned enormous goodwill and reputation. The turnover, as certifiedby the CharteredAccountants,for the two financialyears has been given as under Year Turnoverfor LIArangeof products 2002-2003 Rs.243.67 Lakhs 2003-2004 Rs.413.17 Lakhs 13)Theplaintiffclaimsto havelargepresencein Delhiapartfrom all over the country includingfor the LIA range of products. The productsare statedto have been advertisedin major nationaland CS (OS) No. 860 of2004 Page No. 6 of86 V regional dailies and the expenditure for the financial year 2003- 2004 for this range of products is stated to be Rs.12.39 Lakhs. The sales are stated to have been rising and the products identified with the packaging used in connection with the LIA products, which is claimed to be the single source identifier of the said product. 14)The plaintiff is aggrieved by the products sold by the defendants in and around Delhi under the name of DIA in cartons which are claimed to be identical to that of the plaintiffs LIA cartons. The DIA range of agarbathies of the defendants is being sold in identical fashion in respect of six of plaintiffs LIA products. Defendants No. 1 and 2 are the Directors of defendant No. 3 company, while defendant No. 4 is the Sales and Marketing Divisionof defendantNo. 3. The markis statedto be deceptively VJ similarto the plaintiffsLIA mark-bothphoneticallyand visually and the essentialand distinctivefeaturesofthe packagingofLIA agarbathies is stated to have been copied. There is also commonalityin the choice of names, price and quantity of the sticks per pack and theme and layoutpackagingis claimedto be more than a mere co-incidence. 15)Theplaintiffhas emphasizedthe fact that the defendantclaimsto have an address, which is printed on the side of the carton, as CS (OS)No. 860of2004 pageNo. 7of86 follows Divya Incense (India) Pvt. Ltd. #13, Divya Mansion, 1st Main Road, Srirampuram, Saibaba Nagar, Bangalore - 560 021. 16)The plaintiff claims that on investigation, it has been revealed that there is no such office at the given address, but that there is a building called Keerthi Mansion where there is a board carrying the name Keerti Parimala Works. The goods of the defendants are stated to be manufactured at NOIDA unit and the defendants also have a showroom in Gaziabad. The defendants' cartons have fragrance names printed on the side of the carton in Devnagri, Tamil, Kannada and Telugu scripts even though the business of the defendants and their sales really run in U.P. and Delhi. This is stated to be deliberately done to cause deception so that the public assumes that the products of defendants are actually of the plaintiff. 17)The plaintiff has also referred to the fact that the name DIA is not co-incidentalsince the defendantsare tradingunderthe name and style 'Divya Inscense (India) Pvt. Ltd.', thus, the word 'DIVYA' as such could have been chosen and the word 'DIA' is stated to have been chosensolelydue to its visualand phoneticsimilarityto the plaintiffs LIA mark. The plaintiff claims that the test of unsuspectingconsumer with average intelligenceand imperfect CS (OS)No. 860of2004 Page No. 8 of86 V V recollection must be applied and if the said test is applied, the consumer is bound to be deceived. The get-up of the two productsis stated to be identicaland the productis being sold at the unusual rate of Rs.l5/- for 35 sticks in the same fashion as the plaintiffs product. 18)The plaintiff has set out in detail the distinctivefeatures, which are common in the two get-ups and it would be appropriate to reproduce the same A. ROSE LIA & ROSE DIA LIA DIA Colour Scheme : Pink Colour Scheme : Pink base base softening to whitish towards the centre of the box, where the logo / trademark LIA is printed. softening to whitish towards the centre of the box, where the logo DIA is printed. LIA logo : "Lia" written DIA logo : "Dia" written in a sloping font at a slightly upward angle with a line underscoring the word "Lia" and a shadow effect provided. in a sloping font at a slightly upward angle with a line underscoring the word "Dia" and a shadow effect provided. Text with name and effect of Rose fragrance below LIA logo along with arrested ribbon banner. Text with name and effect of Rose fragrance below DIA logo along with arrested ribbon banner Picture of Roses above LIA logo along with semicircular banner. Picture of Roses above DIA logo along with semicircular banner. "ROSE LIA" printed in Devanagri, Tamil, Kannada, Telegu and Malayalam scripts on side of box. "ROSE DIA" printed in Devanagri, Tamil, Kannada and Telegu scripts on side of box. CS (OS) No. 860 of2004 Page No. 9 of86 V Price : Rs.l5/- for 35 sticks. Price : Rs.l5/- for 35 sticks. B. SANDAL LIA& SANDAL DIA LIA DIA Colour Scheme : Yellow Colour Scheme : Yellow base softening to whitish towards the centre of the box, where the logo / trademark LIA is printed. base sbftening to whitish towards the centre of the box, where the logo DIA is printed. LIA logo : "Lia" written DIA logo : "Dia" written in a sloping font at a slightly upward angle with a line underscoring the word "Lia" and a shadow effect provided. in a sloping font at a slightly upward angle with a line underscoring the word "Dia" and a shadow effect provided. Text with name and effect of Sandal fragrance below LIA logo along with arrested ribbon banner. Text with name and effect of Sandal fragrance below DIA logo along with arrested ribbon banner. Picture of Sandalwood above LIA logo along with semicircular banner. Picture of Sandalwood above DIA logo along with semicircular banner. "SANDAL LIA" printed in Devanagri, Tamil, Kannada, Telegu and Malayalam scripts on side of box. "SANDAL DIA" printed in Devanagri, Tamil, Kannada and Telegu scripts on side of box. Price : Rs.l5/- for 35 sticks. Price : Rs.l5/- for 35 sticks. C. JASMINE LIA & JASMINE DIA LIA DIA Colour Scheme : Light Colour Scheme : Light green base softening to whitish towards the centre of the box, where the logo /trademark LIA is printed. green base softening to whitish towards the centre of the box, where the logo DIA is printed. CS (OS) No. 860 of2004 Page No. 10 of 86 V- LIA logo : "Lia" written DIA logo : "Dia" written in a sloping font at a slightly upward angle with a line underscoring the word "Lia" and a shadow effect provided. in a sloping font at a slightly upward angle with a line underscoring the word "Dia" and a shadow effect provided. Text with name and effect of Jasmine fragrance below LIA logo along with arrested ribbon banner. Text with name and effect of Jasmine fragrance below DIA logo along with arrested ribbon banner Picture of flowering Jasmine plant above LIA logo along with semicircular banner. Picture of flowering Jasmine plant above DIA logo along with semicircular banner. "JASMINE LIA" printed in Devanagri, Tamil, Kannada, Telegu and Malayalam scripts on side of box. "JASMINE DIA" printed in Devanagri, Tamil, Kannada and Telegu scripts on side of box. Price : Rs.l5/- for 35 sticks. Price : Rs.l5/- for 35 sticks. D. VIBRANT / RAINBOW LIA & LAVENDER DIA LIA DIA Colour Scheme : Mauve, Colour Scheme ; Manve base softening to whitish towards the centre of the box, where the logo / trademark LIA is printed. base softening to whitish towards the centre of the box, where the logo DIA is printed. LIA logo : "Lia" written DIA logo : "Dia" written in a sloping font at a slightly upward angle with a line underscoring the word "Lia" and a shadoweffect provided. in a sloping font at a slightly upward angle with a line underscoring the word "Dia" and a shadow effect provided. CS(OS)No. 860 of2004 Page No. 11 of86 Text with name and effect of Vibrant fragrance below LIA logo along with arrested ribbon banner. Text with name and effect of Lavender fragrance below DIA logo along with arrested ribbon banner. Picture of flowers above LIA logo along with semicircular banner. Picture of flowers above DIA logo along with semicircular banner. "VIBRANT LIA" printed in Devanagri, Tamil, Kannada, Telegu and Malayalam scripts on side of box. "LAVENDER DIA" printed in Devanagri, Tamil, Kannada and Telegu scripts on side of box. Price : Rs.l5/- for 35 sticks. Price : Rs.l5/- for 35 sticks. E. FRESH/SEASHORE LIA &KEWDADIA LIA DIA Colour Scheme : Blue Colour Scheme : Blue base base softening to whitish towards the centre of the box, where the logo / trademark UA is printed. softening to whitish towards the centre of the box, where the logo DIA is printed. LIA logo ; "Lia" written DIA loso : "Dia" written in a sloping font at a slightly upward angle with a line underscoring the word "Lia" and a shadow effect provided. in a sloping font at a slightly upward angle with a line underscoring the word "Dia" and a shadow effect provided. Text with name and effect of "Fresh" fragrance below LIA logo along with arrested ribbon banner. Text with name and effect of Kewda fragrance below DIA logo along with arrested ribbon banner. Picture above LIA logo along with semicircular banner. Picture above DIA logo along with semicircular banner. & CS{OS)No. 860 of2004 Page No. 12 of86 "FRESH LIA" printed in Devanagri, Tamil, Kannada, Telegu and Malayalam scripts on side of box. "KEWDA DIA" printed in Devanagri, Tamil, Kannada and Telegu scripts on side of box. Price:Rs.l5/- for 35 sticks Price:Rs. 15/- for 35 sticks F, NATURE'S GIFT LIA & MOGRA DIA LIA DIA Colour Scheme : Green Colour Scheme : Green base softening to whitish towards the centre of the box, where the logo /trademark LIA is printed. base softening to whitish towards the centre of the box, where the logo DIA is printed. LIA logo : "Lia" written DIA logo : "Dia" written in a sloping font at a slightly upward angle with a line underscoring the word "Lia" and a shadow, effect provided. in a sloping font at a slightly upward angle with a line underscoring the word "Dia" and a shadow effect provided. Text with name and effect of "Gift" fragrance below LIA logo along with arrested ribbon banner. Text with name and effect of "Mogra" fragrance below DIA logo along with arrested ribbon banner. Picture of flower buds above LIA logo along with semicircular banner. Picture of flower buds above DIA logo along with semicircular banner. "GIFT LIA" printed in Devanagri, Tamil, Kannada, Telegu and Malayalam scripts on side of box. "MOGRA DIA" printed in Devanagri, Tamil, Kannada and Telegu scripts on side of box. Price:Rs.l5/- for 35 sticks Price: Rs.l5/- for 35 sticks '3/ 19)Inorder to appreciatethe visualimpactof the two products,it is appropriate to incorporate in the judgment the respective cartons of the plaintiff and the defendants, which are as under:- CS (OS) No. 860 of2004 Page No. 13 of86 >yi Q' CS (OS) No. 860 of2004 hnis W AcDinbnalioiiof Kose,which givesyou0distinct a a- & o Page No. 14 of 88 EXCLUSIVE % => CS (OS) No. 860 of2004 Arorabinatkinof SiBidotwliidi givespo distinct Page No. 15 of88 Of/r/ i',. CS (OS) No. 860 of2004 lasmlfie,wlildi jivcspadistBicI (mlliveiyM I'l Page No. 16 of88 Id I CS (OS) No. 860 of2004 Acombinatianof lovender,which givesyovodistincl a J 35 Page No. 17 of88 / CS (OS) No. 860 of2004 f feWllD,Klltidl Divesyou odislinct I I «• Is J •9 -3^ Page No. 18 of88 (i^ EXCLUSIVE w «o 1 Cafm •& |\ Relivcinj CS (OS) No. 860 of2004 tisfniHiiiilHiiii Page No. 19 of88 20)The plaintiff claims that the aforesaid is not a mere co-incidental act, but is a deliberate act of copying in order to deceive the customers and to cause confusion amongst the mind of the said customers. The defendants are, thus, alleged to be attempting to ride piggy back on the reputation and fame of the plaintiffs products and it is not a case of one product being copied, but the entire range itself being copied. The defendants are further alleged to be attempting to utilise the substantial reputation and goodwill of the plaintiff and it is all the more because of the nature of the products where packaging forms an essential and integral part of identification of the products. The defendants' act is alleged to be a misrepresentation in the course of trade so as to cause deception about its origin or at least claim an indirect connection with the plaintiff. t 21)Theplaintiffallegesthatthe defendants'act amountto an attempt to pass off its goods as that of the plaintiff, an act of unfair competition, infringement of copyright of the plaintiff and dilution. The deceptionis statedto be boundto lead to confusion m passing off of the goods and even if the customer evinces interestin the defendants'productsbased on its get-up,the same would be 'initial interestconfusion',which is also a species of passingoff. The aspectof dilutionis explainedas aconsequence CS (OS)No. 860of2004 PageNo. 20of86 y of utilisation by the defendants of the plaintiffs goodwill arising from the high quantity of products and sales standards and the act of the defendants would, thus, constitute dilution of the plaintiffs brand-name equity in the products. 22)The plaintiffhas prayed for a decree of permanentinjunctionin respect of six packages of DIA products in question, which are similar to the LIA products; decree for delivery up; and for damages of Rs.21,50,000/-. 23)At the stage of the suit being entertained and summons being issued, the interim relief was grantedin favour of the plaintiffand Local Commissioners were appointed, who submitted their reports. The situationon visitto the officeof M/s. DivyaIncense (India) Pvt. Ltd. at Srirampuram, Bangalore has been explained by the Local Commissioner and it was found that the premises belong to M/s. Keerti Parimala Works, who were manufacturers and suppliersof agarbathi. The said Works also did job work for M/s. Divya Incense. At some stage, M/s. Divya Incensehad its office in the premises, but the same was stated to have been subsequentlymoved to anotheraddressat Bangaloreat 19/2, 2nd Cross, Robertson Block, Ramachandrapuram,Bangalore. This office of M/s. Divya Incense was also stated to be managed by Mr. Sunder Raj, who was the proprietor of M/s. Keerti Parimala CS (OS)No. 860of2004 PageNo. 21 of86 \\o Works. This new premises was also visited by the Local Commissioner. The six brand-names oLDIA were manufactured there on job-work basis by M/s. Keerti Parimala Works, who purchased raw agarbathies from M/s. Divya Incense, Bangalore. The goods after packaging were then shipped to M/s. Divya Incense, NOIDA. 24)The Ghaziabad office of the defendants was also visited by the Local Commissioner who found the alleged infringing material. Similar position arose in respect of the Local Commissioner, who visited the office of the defendants at Ramesh Nagar and NOIDA, U.P. 25)The defendants have contested the suit and one of the principal defences is that the trademark of the defendants is not DIA, but LOTUS DIA. This is compared with the plaintiffs CYCLE brand. It is, thus, claimed that LOTUS DIA is a composite mark and, thus, there is no question of deception. It is also claimed that the word 'LIA' is not a trademark and is being used as only a quality mark. The defendants have claimed to have adopted the trademark LOTUS DIA bona fide during the course of business, which is distinct from the mark of the plaintiff. The word 'DIA' is stated to be an ordinary word used in reference to 'small earthern lamps',whichis commonlyusedon religiousoccasions. CS (OS)No. 860of2004 PageNo. 22of86 26)Insofar as the infringement of copyright is concerned, it is claimed that the trade dress and the artistic features are completely different for the two. The allegation of passing off has been denied and it has been claimed that the plaintiff has, in fact, come with unclean hands before the Court. The defendants claim to have achieved sales worth Rs.5.75 Lakhs in 2003-2004 and about Rs.10.15 Lakhs from 01.04.2004 to 0.08.2004. The defendants claim to have engaged the services of an artist at Bangalore to create the copyright and the labels / packaging. It is, thus, stated that the plaintiff is not entitled to any relief of injunction or damages. 27)On the pleadings of the parties, the following issues were framed "1. Whether the plaintiff is registered partnership firm and the suit is filed and instituted through a competent person and to what effect? 2. Whether the plaintiffis the proprietor both under the statutory and common law of the allegedtrademarksand copyrightsLIA and artisticworks / copyrightbearing the same in relation to its alleged products being incense sticks / agarbathies? 3. Whether the defendant impugned trademark LOTUS DIA' and its artistic features and labels are identical with or deceptively similar to the trademark / copyrights of the plaintiff sued upon amountingto infringementand passingoff and to what effect? CS (OS)No. 860of2004 23of86 A •J' 4. Whether the plaintiff is guilty of suppressing material facts and making false statements and to what effect? 5. Whether the defendants have honestly adopted and used his subject matter trademark since 2003 in relation to incense sticks (agarbathies) and to what effect? 6. Whether the defendants, in the alternative, are entitled to benefit of honest and concurrent users and to what effect? 7. Whether the suit is barred by delay, acquiescence, laches, estoppel and waiver? 8. Relief.' ^1/ 28)On 25.08.2004, learned counsel for the parties agreed that the plaintiff would not claim damages and the defendants would not press