IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.PADMANABHAN NAIR FRIDAY, THE 11TH APRIL 2008 / 22ND CHAITHRA 1930 RFA.No. 476 of 2007() --------------------- OS.9/2000 of FIRST ADDL.DISTRICT COURT, THRISSUR .................... APPELLANT/IST DEFENDANT ---------------------------------------- K.P.JAMES, S/O.PAVUNNY, RESIDING AT KALAN HOUSE, NELLAI P.O., MUKUNDAPURAM TALUK, THRISSUR DISTRICT. BY ADV. SRI.V.CHITAMBARESH (SR.) SRI.SAIGI JACOB PALATTY RESPONDENTS: PLAINTIFFS/2ND DEFENDANT ------------------------------------- 1. DR.K.K.JOHNY, S/O.K.P.KOCHUVAREED VAIDYAN, M/S.J & J KALAN PHARMACY, NELLAI P.O., THRISSUR. 2. KURNTHOTTAM AYURVEDIC AGENCIES, T.D.ROAD, KOCHI-35, REPRESENTED BY ITS PARTNER SHABI MOHAN, S/O.MOHAN DAS. 3. KATHIR VELU, PROPRIETOR, M/S.SRI SHANBA PRINT PACK, 13-B-3/10, P.K.N.ROAD, SIVAKASI - 626 189. R1 & R2 BY ADV. SRI.G.SREEKUMAR SRI.A.L.GEORGE THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 04/04/2008, THE COURT ON 11/04/2008 DELIVERED THE FOLLOWING: K. PADMANABHAN NAIR ,J. ------------------------------------------------- R.F.A.No.476 of 2007 ------------------------------------------------- Dated, this the 11th day of April, 2008 JUDGMENT First defendant in O.S.No.9/2000 on the file of First Additional District Court, Thrissur is the appellant. Appeal is filed against a decree passed by the court below by which the appellant was restrained from passing off the goods manufactured by him by name 'Kerala Kesamrutham' as goods manufactured by the first respondent/plaintiff by name 'Kesamrutham' and from using the logos, labels and cartons which are deceptively similar to the one used by the first respondent/plaintiff. For the sake of convenience the parties will be referred to as arrayed in the plaint. 2. First respondent originally filed a suit before the District Court, Ernakulam as O.S.No.39/2000. The suit was filed on 25.10.2000. The appellant appeared and raised a contention that the courts at Ernakulam had no jurisdiction to entertain the suit. By order dated 24.11.2000 the District Court, Ernakulam accepted the contention and held that the suit was not maintainable before the District Court, Ernakulam. The plaint was returned for presentation before the proper RFA No.476/2007 2 court. Accordingly plaintiff filed the suit before the District Court, Thrissur on 25.11.2000 and numbered as O.S.No.9/2000. 3. Material averments in the plaint are as follows: First plaintiff is an Ayurvedic Doctor and also the proprietor of M/s.J.J.Kalan Pharmacy, Nellai which is engaged in the manufacture and trade of ayurvedic, sidha and unani drugs and medicinal preparations which includes all types of hair oils, cosmetics, preparations for hair, other cosmetic and toilet preparations for a long time. In the course of said business he had conceived and adopted the trade mark 'Kesamrutham' both in English and Malayalam and the logos from the year 1983. He obtained drug licence on 12.9.1993. He also applied for registration of logo bearing the picture of cini actress Smt. Charmila under Classes 3 and 5 and trade mark 'Kesamrutham' both in English and Malayalam. The applications were accepted for registration by the Registrar of Trade Marks. The total local sales turnover and export sales turnover for the year 1996-97 were Rs.4,35,120.50 and Rs.7,210/- respectively. During the year 1999-2000 the total local sales turnover and export sales turnover were Rs.17,45,580.23 and Rs.30,32,002/- respectively. First plaintiff RFA No.476/2007 3 was using the trade mark and logos with a view to indicate that such goods are manufactured by him and also to show that he was doing business under the said labels, trade marks and logos. Trade marks and logos are distinctive of the goods manufactured by the first plaintiff. He had also spent considerable amount for promoting the sale of goods manufactured by him and spent considerable amount for publicity and advertisement. In the year 1999-2000 he spent more than Rs.1,48,695/- for advertisement and sales promotion. The unwary purchasers and consumers refer and identify the first plaintiff's business and goods manufactured by him under the trade mark and logos By the constant use of the trade mark and logos they have become very distinct of the first plaintiff's business and the goods only and with none else. On 23.10.2000 the first plaintiff came to know that first defendant is making hasty plans to commence business using trade marks and logos of his business. Goods manufactured by the first defendant were identical and deceptively similar to that of the first plaintiff. With ulterior motives he had started using the trade style and trade mark 'Kesamrutham' both in English and Malayalam and logos which are mere copies of the first plaintiff's trading style, trade marks and RFA No.476/2007 4 logos. The first defendant is imitating and copying the first plaintiff's trade mark and logos and the trade mark and logos used by the first defendant are deceptively similar to the one used by the first plaintiff. First defendant is creating confusion in the market and public are misled to think that the goods/products of first defendant are the goods/products of first plaintiff. On 23.10.2000, 17,000 packets and labels of deceptively similar items were delivered to the premises of the first plaintiff mistakenly by the second defendant who is the proprietor of M/s.Sri Shenba Print Pack, Sivakasi. First plaintiff made enquiries with the agent of the second defendant and understood that all those items were supplied at the instance of the appellant/first defendant who placed orders with the second defendant at Sivakasi for manufacturing and printing of infringed labels and cartons with a mala fide intention to create confusion in the market. A perusal of the infringed cartons shows that the first defendant obtained drug licence in the year 2000. Since the second defendant is manufacturing and printing infringed labels and cartons he is also made a party to the suit. Hence the suit for a decree of permanent prohibitory injunction restraining the first defendant, his servants, employees or agents or any one RFA No.476/2007 5 claiming through or under him from in any manner of passing off trade/business as that of first plaintiff using the trade mark Kesamrutham both in English and Malayalam and the logos as seen in the label and packet in combination of colours, cyan and yellow and also for a decree of permanent prohibitory injunction restraining the second defendant from manufacturing, printing and supplying of infringed labels and cartons to the first defendant which are deceptively similar to that of the cartons used by the first plaintiff. 4. Appellant/first defendant filed a written statement contending that the averment that the first plaintiff honestly conceived and adopted the trade mark Kesamrutham both in English and Malayalam and logo is incorrect. There are several manufacturers of ayurvedic preparations who are manufacturing and selling hair tonic under the same name 'Kesamrutham'. It was contended that first defendant's brother Shri Varghese was manufacturing and selling hair tonic by name 'Kesakalpam' in a carton and first plaintiff had imitated that carton. It was also contended that it was the appellant who started manufacturing of Kesakalpam in the year 1984 which was subsequently transferred to his brother. RFA No.476/2007 6 The cartons used by the first plaintiff itself is an imitation. He is not the first user. The name Kesamrutham being used in the market even before 1970 and hence it become a common property. The averment that the first plaintiff had applied for registration of the trade mark and logo was denied. The averment that the first plaintiff obtained the drug licence in the year 1983 was not admitted. The further averment that the first plaintiff was exporting Kesamrutham to various Gulf countries was not admitted. The figures given in the plaint are not the sales turnover of 'Kesamrutham'. The averment that the first plaintiff is using the trade name and logo and hence it become distinctive was denied. First plaintiff had not been using the trade name and logo as alleged. The trade mark and logo of the first plaintiff is not distinctive as claimed by him. The averment that he was doing extensive business and manufacture was also denied. First plaintiff was not actually using the trade mark and logo as alleged by him in respect of the goods manufactured by him. The averment that the first plaintiff spent considerable amounts and and efforts for promoting the sales of the goods manufactured by him using the trade mark and logo was denied. The further averment that the unwary purchasers and consumers refer and RFA No.476/2007 7 identify the first plaintiff's goods/products under that trade mark and logo is incorrect and hence denied. The further averment that due to continuous and extensive user of the trade mark and logo they have become distinct of the first plaintiff's business and the goods only and with none else was not correct. It was contended that the trade mark and logos of the first defendant is neither identical nor deceptively similar to the trade mark and logo used by the first plaintiff. The word 'Kesamrutham' is a descriptive word meant to describe the nature of the product and also the word of common use. So many manufacturers are selling their products under the name 'Kesamrutham' much prior to the starting of the business of the first plaintiff. The first plaintiff had started manufacturing only in the year 1996. The name of the product of the appellant/first defendant is 'Kerala Kesamrutham' and not 'Kesamrutham' and the name of the establishment is 'Kalans Products' and that name is also printed on the top and bottom of carton. There are other dissimilarities also. The cartons produced by the first plaintiff claiming to be that of his is not the carton which he has actually marketing his products. The averment that trade mark and logo used by the first defendant are deceptively similar to the trade mark and RFA No.476/2007 8 logo of the first plaintiff is absolutely incorrect. The first defendant is having his own independent trading style, trade mark and logo and he had not adopted the identical and deceptively similar trade style, trade mark and logo of the first plaintiff. On 23.10.2000 the bundles containing of first defendant's carton, viz., Kesakalpam and labels as also the bundles containing cartons of first plaintiff arrived by bus at Thrissur. A person was entrusted with the bundles for delivery to the first plaintiff as well as first defendant. He was not the person who used to do it in usual course. The residence and business of the first plaintiff are located in the same compound and that is situated ahead of the first defendant's residence. The driver of the mini metadore van who brought the bundles went first to the first plaintiff's house for delivery, he enquired the first plaintiff as to where the first defendant was staying. With a mischievous motive the first plaintiff took delivery of the parcel of the first defendant misrepresenting the facts to the driver though the name and address of the first defendant was clearly shown in the bundle. The averment that those cartons and labels were mistakenly delivered by the first plaintiff was denied. Those labels and cartons are not deceptively similar to the cartons RFA No.476/2007 9 and labels being used by the first plaintiff. First defendant has not ordered for manufacturing and printing any infringed labels or cartons. He has no intention to create confusion in the market and consuming public and not thinking that the goods manufactured by the first defendant are the goods manufactured by the first plaintiff. The licence number of first defendant is 36/25/D/2000. Hence he prayed for dismissal of the suit. 5. Second defendant who was the manufacturer of the cartons had filed a written statement contending that he was an unnecessary party to the suit. It was contended that most of the averments in the plaint are not against him. He was not aware of the imitation and copying of plaintiff's trade style, trade mark and logo by the first defendant. The averments that the trade mark and logo used by the first defendant is deceptively similar to that of first plaintiff's trade mark and logo and that the first defendant had copied the first plaintiff's well established trading style, trade mark and logo with a view to enrich himself unjustly were denied. It was further contended that he had never used the offending trade mark and logo. The RFA No.476/2007 10 second defendant is the proprietor of M/s.Sri Shenba Print Pack, Sivakasi. The averment that the second defendant is assisting the first defendant to pass off his goods as that of the first plaintiff was denied. In the written statement it is admitted that the second defendant was printing labels and cartons for the first plaintiff from 1995 onwards. The labels of Kesamrutham were first printed in the year 1995. The colour combination of labels are combination of cyan and yellow with photo of cine actress Charmila. Second defendant was not having sales tax registration during 1995-96. So the entire transaction with the first plaintiff was done through Sri Devipala Colour Galaxy and another who had Central Sales Tax registration. The colour combination was of 45% cyan with colour majantha and this colour combination was selected and suggested by the first plaintiff. The ratio of colours to be mixed to get that colour was also suggested by the first plaintiff. The colour combination suggested by the first plaintiff was printed by the second defendant. The first plaintiff required two types of cartons and labels for his product Kesamrutham, one was for export purpose and another was for local sales in India. The cartons for export purpose were printed with combination of cyan colour with a RFA No.476/2007 11 yellow border on the top side and the picture of cine actress Charmila was also printed on the cartons and labels. In addition to English and Malayalam words some Arabic words are also printed. Below the word 'hair tone' the word 'export quality' is printed. In the cartons printed for local sales in the place of 'export quality' it is printed as 'for sale in India only' and in two sides of cartons and labels instead of combination of cyan, green colour was used. The details are printed in yellow colour. In addition to English and Malayalam, Tamil words are also printed. Instead of the picture of Charmila the photo of another model was printed. So from 1995 onwards second defendant has been printing two types of cartons and labels for 'Kesamrutham', one for export and other for local sales. Few days prior to 28.10.1998 the first defendant approached the second defendant and requested to print cartons and labels for a product named 'Kesakalpam' in the same colour combination used by the first plaintiff for export quality. Although the indications and instructions were copied from first plaintiff's cartons and labels the name of the product, address of the manufacturer, picture of the models were different. There were several differences. So the second defendant printed the cartons and labels as demanded by the RFA No.476/2007 12 first defendant. During the second week of August, 2000 the first defendant again approached the second defendant to print labels and cartons for his product, Kalans Products 'Kerala Kesamrutham' in the above colour combination and the films for printing cartons and labels were bought by the first defendant from Kerala. First defendant requested the second defendant to print labels and cartons in the same colour used by the first plaintiff for 'Kesamrutham' for export quality. One of the major difference is that the yellow margin on the top side of the carton was a little wider. All the other colour combinations were same. Since the first plaintiff had no particular right over the said colour, the second defendant printed the labels and cartons as requested by the first defendant. It was further contended that the first plaintiff never informed the second defendant that the colour combination is his private property. Printing of labels and cartons for the first defendant in the above colour combination was started in October, 1998 only. Labels and cartons of 'Kerala Kesamrutham' was printed in the month of August, 2000. During October, 2000 also he supplied the cartons and labels of 'Keralakalpam'. Unfortunately those bundles were delivered to the first plaintiff and first plaintiff RFA No.476/2007 13 accepted the same. Second defendant is entitled to get the cost of those products. It was further contended that both the bundles were addressed to Nellai and both the parties are called as 'Kalans' and the person who took the goods delivered both parcels to the first plaintiff. It was further contended that even though the colour combination is a product of first plaintiff, he has no right to question the second defendant for printing the same to the first defendant. So he also prayed for dismissal of the suit. 6. First plaintiff filed a replication. It was reiterated that the word 'Kesamrutham' is not a generic word. It is a combination of two words - 'kesam' and 'amrutham'. First plaintiff had got exclusive right over the word 'Kesamrutham'. He also obtained registration under the Patents Act, 1970 for preparation of 'Kesamrutham'. Father of the first plaintiff was manufacturing a preparation by name 'Kesamrutham'. So the first plaintiff has got exclusive right over it. First plaintiff obtained drug licence on 30.3.1983. He obtained drug licence to manufacture 'Kesamrutham' in the year 1984 and from the year 1984 onwards the preparation by name 'Kesamrutham' was sold in a commercial basis in Kerala. From 1995 onwards RFA No.476/2007 14 the first plaintiff marketed his business by advertising in weeklies and magazines within India and also out of India. The colour code, style and trade mark for the preparation of 'Kesamrutham' was registered in the name of first plaintiff under the provisions of Trade Mark and Merchandise Act. The word 'Kesamrutham' was also registered with effect from 20.12.1998. He had obtained the certificates on 9.3.2001. First defendant did not obtain any registration. The documents produced by the first defendant are fabricated for the purpose of suit. In the cartons marketed by the first defendant the word 'Kerala' is printed in a very small letters and no ordinary person can read the same. It is with the intention to mislead the general public. First defendant is not having an independent trading style and logo and he is imitating and copying that of the first plaintiff. The colour combination and labels are combination of cyan and yellow but it is usually called as combination of colour cyan. Technically speaking this combination of cyan is also called as majantha. The contention that the first plaintiff had no particular right over the trade mark is denied. 7. On the side of the plaintiffs PWs 1 to 5 were RFA No.476/2007 15 examined. Exts.A1 to 109 proved and marked. MOs. 1 to 16 identified. On the side of the defendants DWs.1 and 2 were examined. Exts.B1 to B78 proved and marked and B MOs.11 to 44 identified. Trial court found that the suit is maintainable and the products manufactured by the first defendant is deceptively similar to that of the first plaintiff and passed a decree of permanent prohibitory injunction restraining the first defendant, his servants, employees or agents or any one claiming through or under him from in any manner of passing off trade/business as that of the first plaintiff by the first defendant by using the trade mark 'Kesamrutham' both in English and in Malayalam and the logos as seen in the labels and packets in combination of colours, cyan and yellow. It is also directed to surrender the unused cartons. Challenging that decree and judgment the first defendant has filed this appeal. 8. Learned counsel appearing for the appellant/first defendant strenuously argued that the finding of the court below that the suit is maintainable is illegal and perverse. It is argued that the suit was filed by two plaintiffs, but during the pendency of the suit the alleged trade mark was assigned to a private limited company which is an entirely different RFA No.476/2007 16 entity. It is argued that that company is not a party to the proceedings. It is further argued that the plaintiffs have no subsisting interest in the matter and hence the trial court ought to have dismissed the suit on that simple ground. 9. The suit was filed by Dr. K.K.Johny, Proprietor of M/s.J & J Kalan Pharmacy, Nellai and Kurunthottam Ayurvedic Agencies, rep. by its partner. The suit was originally filed before the District Court, Ernakulam on 25.10.2000. By order dated 24.11.2000 the plaint was returned and same was presented before the First Additional District Court, Thrissur on 25.11.2000 and numbered as O.S.No.9/2000. It was admitted by the plaintiffs that the first plaintiff is the owner of proprietary concern and the same was converted as a private limited company with four directors. The plaintiffs filed I.A.No.1935/2005 to implead the company as the third plaintiff. The name and address of the third plaintiff sought to be impleaded is as follows:M/s.J & J Kalan Pharmacy (P) Limited, Nellai P.O., Thrissur District, rep. by Director Dr.K.K.Johny, Aged 58, S/o.Kalan Kochuvareed Vaidyan, Nellai P.O., Thrissur Dt. That application was rejected on the ground that if the same is allowed it will cause much prejudice RFA No.476/2007 17 to the defendants. So, according to the appellant/first defendant it is admitted by the original plaintiffs that they have no subsisting interest over the subject matter of the suit and the company which claims that it is using the trade name and logos is not before the court. It is argued that even if a decree is granted to the original plaintiffs, the assignee plaintiff will not be in a position to execute the same. 10. The first plaintiff claims exclusive right over the trade mark, label and logo. The second plaintiff was impleaded as he was the distributor of the products manufactured by the first plaintiff. He did not make claim over the trade mark, label and logo. Learned counsel for the respondents/plaintiffs relying on a Division Bench decision of this Court reported in Cherukutty v. Velappu (1987 (1) KLT 565) argued that the dismissal of the application filed by the plaintiffs does not make any difference in this case. It is argued that this is not a case of an individual assigning his rights under the Trade mark to a stranger company, but it is a case in which a proprietary concern itself was converted as a private limited company and the person who is authorised to conduct the case as the principal officer is none other than the original first plaintiff himself. It is also argued that it is not RFA No.476/2007 18 necessary to implead the assignee in all cases and if the original plaintiffs are able to protect the interest of the same they can be allowed to prosecute the proceedings. 11. Ext.A92 is the certificate of incorporation of M/s. J & J Kalan Pharmacy and Ext.A100 is the memorandum of articles. A reading of Ext.A92 shows that the proprietary concern run by the first plaintiff was converted as a company with effect from 19.5.2003. Ext.A100 is the memorandum of articles of association of M/s.J & J Kalan Pharmacy. There are only four subscribers and directors. First plaintiff, his wife, his brother and sister-in-law are the directors of the company. 12. Learned counsel for the appellant/defendant relying on the decisions reported in State Trading Corporation of India Ltd. v. CTO and others (AIR 1963 SC 1811); Tata Engineering and Locomotive Co. Ltd. v. State of Bihar (AIR 1965 SC 40) and Raghu Lakshminarayanan v. Fine Tubes ((2007) 5SCC103) has argued that a juristic person can be a company within the meaning of the provisions of the Companies Act, 1956 or a partnership within the meaning of the provisions of the Partnership Act, 1932 or an association of persons which ordinarily would mean a body of persons which is not incorporated under any statute. It is further argued that RFA No.476/2007 19 a proprietary concern however stands absolutely on a different footing. It is also argued that a person may carry on business in the name of a business concern, but he being proprietor thereof, would be solely responsible for conduct of its affairs and a proprietary