CS(OS) No.1164/2001 Page No.1 REPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI + CS(OS) NO. 1164 OF 2001 % Date of Decision : November 14 , 2008. BEIERSDORF A.G. …. Plaintiff. Through Mr.Rajeev K. Virmani, Advocate. VERSUS AJAY SUKHWANI & ANOTHER ….. Defendants. Through Ms.Pratibha M. Singh, Ms.Saya Chaudhary and Ms.Jashan Jot, advocates. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not ? YES 3. Whether the judgment should be reported in the Digest ? YES SANJIV KHANNA, J: 1. M/s.Beiersdorf AG, the plaintiff is the registered proprietor of the mark NIVEA under Class 3, toiletries, under the Trade Marks Act, 1958 (hereinafter referred to as the Act, for short). Defendant no.-2 M/s. Nivea International is a partnership firm and Mr.Ajay Sukhwani, defendant no.1 is one of its partners. It is engaged in the business of educational consultancy and allied services. The plaintiff has filed the CS(OS) No.1164/2001 Page No.2 present suit for passing off and restraining the defendants from using mark/word NIVEA as a trademark/trade name or as a part of trading style and also from operating a website with the domain name www.niveainternational.com. 2. On the basis of the pleadings and documents filed by the parties, the following issues were framed on 8th November, 2005 :- “(i) Whether the plaintiff is the proprietor of the trademark NIVEA and is entitled to protect the said trademark in respect of different goods/services? (ii) Whether the trademark NIVEA is a well known trademark of the plaintiff? (iii) Whether by use by the defendant of the trademark/tradename NIVEA as well as the website over the internet bearing the name www.niveainternational.com the defendant is passing of its business/services as and those of the plaintiff? (iv) Whether the plaintiff has come to this Court with clean hands and has suppressed any material facts from this Court? (v) Whether the suit suffers from delay, latches and acquiescence? (vi) Relief.” CS(OS) No.1164/2001 Page No.3 3. Parties have filed affidavits by way of evidence of Mr.Sudhir D.Ahuja, PW-1 for the plaintiff and Mr.Ajay Sukhwani, DW-1 for the defendants. Parties have not cross examined the witness produced by the other side, on the ground that facts are admitted. By an ex parte order of injunction dated 1st June, 2001, the defendants have been restrained from using the mark NIVEA as a part of their trading name or style and the website www.niveainternational.com or the domain name niveainternational. The said order continues to be in operation. It is stated by the defendants that they did not press for vacation of stay or variation of the injunction order as the trial in the suit was expedited. ISSUE NOS. 1 TO 4 4. Issue nos. 1 to 4 are interconnected, inter related and are therefore being dealt with together. The plaintiff came into existence in 1890 and is incorporated under the laws of Germany. The plaintiff coined and adopted the mark NIVEA, which was registered as a mark in Germany on 23rd June, 1905. In 1911, the plaintiff started first commercial use of the mark NIVEA and by 1991, NIVEA cream was available in 150 countries. The plaintiff started marketing its products in India in 1943. The plaintiff had made an application for registration of mark NIVEA in India in Clause 3 on 12th April, 1943.The registration was granted and has continued since then. The mark CS(OS) No.1164/2001 Page No.4 Nivea has been continuously, extensively and uninterruptedly used by the plaintiff in India and worldwide. 5. It cannot be doubted and to be fair to the learned counsel for the defendants they did not contest that the mark NIVEA is a well known and a respected trademark. 6. The defendants‟ defence in addition to delay and laches, which is subject matter of issue no.5, is based upon the following arguments: (i) Decision dated 25th June, 2001 of the administrative panel of the World Intellectual Property Organisation rejecting the complaint of the plaintiff against defendant no.2. (ii) There is no likelihood of deception as (a) the line of activity i.e. educational services is entirely different and distinct from the goods marketed and sold by the plaintiff under the mark NIVEA, (b) plaintiff cannot claim a universal right to use the mark NIVEA and (c) services provided by the defendants are utilized by well educated persons belonging to middle class and therefore there is no confusion or even likelihood of confusion. EFFECT OF WIPO DECISION CS(OS) No.1164/2001 Page No.5 7. The decision dated 25th June, 2001 of the administrative panel of the World Intellectual Property Organisation (hereinafter referred to as WIPO, for short) is Exhb.DW 1/1. The said decision was made on the complaint made by the plaintiff against grant of registration of the domain name www.niveainternational.com to the defendant no.2 by the registrar of Domain Public Inc., Vancouver, Canada. The said decision is under the Uniform Domain Name Dispute Resolution Policy (hereinafter referred to as „Policy‟, for short) adopted by Internet Corporation of Assigned Names and Numbers (hereinafter referred to as ICANN, for short) and the „Rules for Uniform Domain Name Dispute Resolution Policy‟ (hereinafter referred to as Rules, for short), framed by them. The „Policy‟ and „Rules‟ were not filed along with documents but since both parties have relied upon, I have taken them on record as Exhibits‟ “C” and “D” and relevant provisions have been quoted below. 8. A domain name is an identity or name, which distinguishes the registrant from another. Internet allows universal access cutting across boundaries. Domain name therefore gives universal exclusivity. No two domain names can be exactly similar. International registration of Domain Name System (DNS) is regulated by ICANN. 9. Registration of domain name is an administrative act, which involves a request to the domain name registry, payment of fee and CS(OS) No.1164/2001 Page No.6 allotment, if there is no prior user with the same domain name. Registration being ministerial act is not a pronouncement on the question of violation or infringement of trademark, deception, confusion, etc. At the same time, ICANN was conscious that there can be complaints of infringement of trademark or deception. Therefore, each applicant seeking registration has to give an undertaking to agree to mandatory administrative proceedings in case of a complaint by a third party in respect of the domain name. Clause 4(a) of the Policy reads as under:- “4. Mandatory Administrative Proceeding. This Paragraph sets forth the type of disputes for which you are required to submit to a mandatory administrative proceeding. These proceedings will be conducted before one of the administrative-dispute-resolution service providers listed at www.icann.org/udrp/approved-providers.htm (each, a “Provider”). a. Applicable Disputes. You are required to submit to a mandatory administrative proceeding in the event that a third party (a “complainant”) asserts to the applicable Provider, in compliance with the Rules of Procedure, that (i) your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and (ii) you have no rights or legitimate interests in respect of the domain name; and (iii) your domain name has been registered and is being used in bad faith. CS(OS) No.1164/2001 Page No.7 In the administrative proceeding, the complainant must prove that each of these three elements are present.” 10. Clause 4 mandates that an applicant must agree to submit to mandatory administrative proceeding, if a third person makes a complaint. Administrative proceedings are initiated, when in a complaint it is asserted that conditions of clause 4 (a) are satisfied. Domain name registered in favour of the applicant can be cancelled or transferred on satisfaction of the three conditions mentioned in the sub clause „a‟. Onus is on the complainant to prove that the three elements are present. 11. Sub-clause „b‟ of Clause 4 of the policy1 lists four circumstances regarded as evidence of registration and use of 1 *b. Evidence of Registration and Use in Bad Faith. For the purposes of Paragraph 4(a)(iii), the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith : (i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or (ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or (iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor ; or (iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on you web site or location. CS(OS) No.1164/2001 Page No.8 domain name in bad faith. These circumstances are not inclusive or exhaustive. ICANN is not a participant before the administrative panel or in the administrative proceedings and is not liable for the decisions rendered by the administrative panel. Clause 4 (i) of the Policy stipulates that the administrative panel decision is limited to cancellation of domain name of the applicant or for transfer of the said domain name to the complainant. No other relief can be granted by the administrative panel. 12. Clause 3, Clause 4(k) and Clause 5 of the Policy read as under:- Clause 3 “3. Cancellations, Transfers, and Changes. We will cancel, transfer or otherwise make changes to domain name registrations under the following circumstances: a. Subject to the provisions of Paragraph 8, our receipt of written or appropriate electronic instructions from you or your authorized agent to take such action; b. Our receipt of an order from a court or arbitral tribunal, in each case of competent jurisdiction, requiring such action; and/or c. Our receipt of a decision of an Administrative Panel requiring such action in any administrative proceeding to which you were a party and which was conducted under this Policy or a later version of this Policy adopted CS(OS) No.1164/2001 Page No.9 by ICANN. (See Paragraph 4(i) and (k) below.) We may also cancel, transfer or otherwise make changes to a domain name registration in accordance with the terms of your Registration Agreement or other legal requirements.” Clause 4(k) : “k. Availability of Court Proceedings. The mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent either you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded. If an Administrative Panel decides that your domain name registration should be canceled or transferred, we will wait ten (10) business days (as observed in the location of our principal office) after we are informed by the applicable Provider of the Administrative Panel‟s decision before implementing that decision. We will then implement the decision unless we have received from you during that ten (10) business day period official documentation (such as a copy of a complaint, file- stamped by the clerk of the court) that you have commenced a lawsuit against the complainant in a jurisdiction to which the complainant has submitted under Paragraph 3(b)(xiii) of the Rules of Procedure. (In general, that jurisdiction is either the location of our principal office or of you address as shown in our Whois database. See Paragraphs 1 and 3(b)(xiii) of the Rules of Procedure for details.) If we receive such documentation within the ten (10) business day period, we will not implement the Administrative Panel‟s decision, and we will take no further action, until we receive (i) evidence satisfactory to us of a resolution between the CS(OS) No.1164/2001 Page No.10 parties; (ii) evidence satisfactory to us that your lawsuit has been dismissed or withdrawn; or (iii) a copy of an order from such court dismissing your lawsuit or ordering that you do not have the right to continue to use your domain name.” Clause 5 “5. All Other Disputes and Litigation. All other disputes between you and any party other than us regarding your domain name registration that are not brought pursuant to the mandatory administrative proceeding provisions of Paragraph 4 shall be resolved between you and such other party through any court, arbitration or other proceeding that may be available.” 13. As per clause 3, ICANN will cancel, transfer or make changes to a registered domain name where (a) the registrant himself makes a request, (b) an order of the court or a tribunal of competent jurisdiction requires such action and (c) when an order is passed by an administrative panel. Use of the word “and/or” in clause 3 indicates that sub-clause „a‟ ,„b‟ and „c‟ are independent and distinct. 14. Clause 5 stipulates that disputes other than disputes relating to domain name, cannot be made subject matter of mandatory administrative proceedings. All other disputes have to be resolved by “you”-the registrant and the other party through court, arbitration or any other proceedings. Administrative proceedings are restricted to the question of domain name. CS(OS) No.1164/2001 Page No.11 15. Clause 4(k) states that mandatory administrative proceedings shall not prevent the registrant or the complainant from raising a dispute before a court for independent resolution before or after mandatory administrative proceedings. The word “concluded” used in the first sentence of Clause 4(k), is a pointer that parties have right to go to court, even after administrative proceedings have concluded and a decision is rendered. Latter part of sub-clause (k) states that ICANN shall wait for a period of ten days before implementing a decision of the administrative panel to cancel or transfer the domain name and within this period, the registrant can submit certified document that he has commenced a law suit or legal proceedings against the complainant. The use of the word “you” in Clause 4(k) refers to the registrant in contradiction to the complainant. The last part of the said sub-clause stipulates that the registrant can commence a law suit in a jurisdiction to which the complainant has submitted under paragraph 3(b)(xiii) of the Rules of Procedure. Paragraph 3(b)(xiii) of the Rules of Procedure (excluding other paragraphs) reads as under:- Rule 3. The Complaint CS(OS) No.1164/2001 Page No.12 (b) The complaint shall be submitted in hard copy and (except to the extent not available for annexes) in electronic form and shall: (xiii) State that Complainant will submit, with respect to any challenges to a decision in the administrative proceeding canceling or transferring the domain name, to the jurisdiction of the courts in the Mutual Jurisdiction.” 16. The term “mutual jurisdiction” for the purpose of the Rules has been defined in Paragraph 1 as under:- “Mutual Jurisdiction means the jurisdiction either (a) at the principal office of the Registrar (if the domain-name holder has submitted in its Registration Agreement to that jurisdiction for court adjudication of disputes concerning or arising from the use of the domain name) or (b) at the location of the domain-name holder‟s address as shown for the registration of the domain name in Registrar‟s Who is database at the time of the complaint (if the domain-name holder has not submitted to such jurisdiction in the Registration Agreement).” 17. Accordingly, when the plaintiff made the complaint to WIPO, under Rule 3(b)(xiii) they agreed to submit to the jurisdiction of the courts of mutual jurisdiction i.e. courts located at the principal office of the Registrant as in the present case the domain name holder had submitted to their jurisdiction in the Registration agreement. In this CS(OS) No.1164/2001 Page No.13 connection, learned counsel for the defendants had brought to my notice, amendment made by the plaintiff to the complaint on 2nd May, 2001, incorporating the following clause :- “In accordance with Paragraph 3(b)(xiii) of the Rules, the Complainant agrees to submit only with respect to any challenge that may be made by the Respondent to a decision by the Administrative Panel to transfer or cancel the Domain Name that is the subject of this Complaint to the jurisdiction of the courts in the location of the principal office of the Registrar.” (This document was not filed with the list of documents by the defendants but was with the consent of the parties placed on record at the time of arguments. For the sake of convenience the document is marked Exhb. „E‟). 18. The aforesaid undertaking was in terms of Rule 3(b)(xiii). 19. Rule 3(b)(xiii) and the undertaking reveals that it will apply only when the registrant decides to challenge a decision of the administrative panel to transfer or cancel the domain name and in such cases the complainant has to agree to submit to a court of mutual jurisdiction i.e. the place where principal office of the registrar is located, if the registrant has agreed and in other cases, the place of registrant‟s address as shown in the data base at the time of the complaint. For the said Rule and the undertaking to apply, there should be a decision of the administrative panel to transfer or cancel CS(OS) No.1164/2001 Page No.14 the domain name. The aforesaid undertaking and Rule 3(b)(xiii) will not apply, if the complaint is dismissed. When a complaint case is dismissed, the Rules and undertaking quoted above do not prescribe or fix a court of mutual jurisdiction. The complainant can take action against the registrant in a court of competent jurisdiction as per private international law or municipal law. If the intention of the Rules is to confer exclusive jurisdiction in the court of mutual jurisdiction even when a complaint is dismissed, they would have been worded differently. The words “any challenge which may be made by the respondent”, cannot be replaced by the words “any challenge made by the parties” or “complainant”. Similarly, instead of the words “decision of the administrative panel to transfer or cancel domain name” the words “any challenge to the decision of the administrative panel” would have been used. The words cannot be modified and amended to read that any challenge or litigation by the complainant against the registrant can be exclusively in the court of mutual jurisdiction as defined in the Rules or the undertaking. 20. It is not possible to accept the contention of the defendant that the decision of the administrative panel is an award or a binding decision which operates as res judicata. It is not adjudication is a strict sense. Parties do not appear and address arguments before the administrative panel. No evidence is recorded. There is no cross examination. Decision of the administrative panel is an administrative CS(OS) No.1164/2001 Page No.15 decision, which is open to challenge in a court of law if the domain name is cancelled/transferred. When a complaint is dismissed, the complainant, if he is not satisfied with the decision, is at liberty to initiate legal proceedings against the registrant therein in accordance with law in a court of competent jurisdiction. ICANN under Clause 3 of the policy will cancel or transfer registration on decision by a court of competent jurisdiction requiring such action. Finality is not attached to the decision of the administrative panel. For res judicata to apply, the decision between the parties should have attained finality. Civil suit is maintainable before and after administrative proceedings. It is also not possible to accept the contention of the defendants that the decision of the administrative panel is an award. There is no arbitration agreement between the parties. Administrative panel is not an arbitrator. There is no adjudication of mutual rights by an arbitrator. The words of the Policy itself indicate and are a pointer that the decision of the panel is administrative. Registration of domain name is an administrative process and when a challenge is made to the registration of the domain name, an administrative decision is taken on the basis of parameters or guidelines. It cannot be said that the administrative decision is an award which can be enforced as a domestic award or as an international award or is recognized under Section 43 of the Arbitration and Conciliation Act, 1996. It is also not a protective shield that bars or prohibits court proceedings. Clause CS(OS) No.1164/2001 Page No.16 4(k) of the Policy permits court proceedings during pendency of a complaint or even after decision of the complaint. The object behind the Policy is to ensure expeditious, cheap and speedy disposal of complaints regarding registration of domain name. Policy creates a contract based scheme for addressing disputes between the domain name registrants and third parties challenging the registration and use of domain name. The unique contractual arrangement renders the provision of judicial review of arbitration awards inapplicable. Law recognizes that there can be decisions, which are not awards or court decisions (Refer, K.K. Modi versus K.N. Modi, reported in (1998) 3 SCC 573). 21. Plaintiff had filed a complaint before WIPO on or before 1st May, 2001. But this fact was not disclosed in the plaint filed on 31st May, 2001. The reason given by the plaintiff is mistake on the part of the officers who were involved in filing of the plaint as it is claimed that they were not aware of the said fact. The plaintiff should have been careful but I am not inclined to deny relief to the plaintiff on this ground alone for the date of the decision by the administrative panel is 25th June, 2001 i.e. after filing of the Suit and grant of the ex parte injunction order. Defendants were party to the complaint proceedings and therefore were aware. Plaintiff has not gained or taken advantage by not mentioning about the complaint before the administrative panel. Policy has also been interpreted. CS(OS) No.1164/2001 Page No.17 Passing Off 22. Passing off is a common right which protects goodwill and reputation of a person and prevents dishonest or improper use of a goodwill by a third person. The principle is “a man cannot sell his own goods on the pretence that they are goods of another man”. 23. For establishing a case for passing of, the plaintiff is required to prove (a) goodwill, (b) deception by a third person and (c) damage or possible damage to the claimant/plaintiff. The three requirements are inter connected and causal connection between goodwill, deception and damage or possible damage should be established. A claim of passing off requires adjudication into the nature and extent of the plaintiff‟s goodwill in a mark, label etc., deception or misstatement made by the defendant with reference to goodwill of the plaintiff and whether it has caused or is likely to cause injury or loss to the goodwill of the plaintiff. The nature and extent of goodwill, misstatement and deception made is substantially a question of fact. Lord Oliver in Reckitt and Colman versus Borden reported in (1990) RPC 341 had explained classical trinity of reputation, deception and damage in the following words:- “The law of passing off can be summarised in one short general proposition-no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or CS(OS) No.1164/2001 Page No.18 reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the