IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN WEDNESDAY, THE 14TH DECEMBER 2011 / 23RD AGRAHAYANA 1933 RFA.No. 140 of 2005 --------------------- OS.2/2003 of I ADDL. DISTRICT COURT, PALAKKAD .................... APPELLANT/DEFENDANT: ------------------------------------- MR.T.R.KUMAR, PROPRIETOR, SONY TRAVELLING GOODS 12/1058 SHOBHA T.S.M. COMPLEX, R.S.ROAD, PALAKKAD 678 001. BY ADVS. SRI.JOHN MATHEW SRI.M.S.JOHNSON SRI.PRAMOD J.DEV RESPONDENT/PLAINTIFF: -------------------------------------- SONY KABUSHIKI KAISHA ALSO TRADING AS SONY CORPORATION, GATE CITY OSAKI 1-11-1 OSAKI SHINAGAWA-KU, TOKYO 141-0032, JAPAN. R1 BY ADVS. SRI.C.G.SUNIL SRI.SAJI MATHEW THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 22/11/2011, THE COURT ON 14/12/2011 DELIVERED THE FOLLOWING: STK RFA.No. 140/2005 APPENDIX P.BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - R.F.A.No. 140 of 2005 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 14th day of December, 2011 J U D G M E N T “SONY” a multinational Corporation found its registered trade mark being misused by a tiny shop keeper at Palakkad. In spite of, the desist and cease notice issued to the defendant, he continued to use the name “SONY” for his shop, which infact had the trade name ‘Sony Travelling goods’. That compelled the plaintiff to institute a suit for necessary reliefs. 2. The suit was resisted by the defendant on various grounds. One of the contentions was that the defendant was not a manufacturer but only a retail seller of certain articles which were supplied to him by various manufacturers. As usual, all the allegations in the plaint were denied by the defendant. Then it was contended that, at any rate, the claim made by the plaintiff is barred by estoppel, waiver and acquiescence. On the basis of these claims, the defendant prayed for a dismissal of the suit. :2: R.F.A.No. 140 of 2005 3. On the above pleadings issues were raised by the trial court. The evidence consists of the testimony of PW1 and documents marked as Exts.P1 to P15 from the side of the plaintiff. The defendant had DW1 examined and Ext.B1 to B4 marked. On an appreciation of the evidence in the case, the trial court came to the following conclusions:- (1). There was no infringement of the registered trade mark, in so far as, the goods dealt with by the defendant is entirely different from the one manufactured, produced and sold by the plaintiff Corporation. (2.) However the defendant is guilty of the mischief of passing of. 4. On the basis of above findings the suit was decreed. The said judgment and decree are assailed in this appeal. 5. The learned counsel appearing for the appellant pointed out that the court below has grievously erred in law and on facts in decreeing the suit. According to the learned counsel after having found that there is no infringement of :3: R.F.A.No. 140 of 2005 the registered trademark the court below was not justified in coming to the conclusion that there is passing off . The court below ought to have seen that the necessary ingredients to attract the mischief of passing off had not been established. 6. According to the learned counsel, the evidence furnished by PW1 is far from satisfactory to establish the claim of the plaintiff. In fact he has absolutely no idea about the business carried on by the defendant. There is absolutely no evidence to show that there was any misrepresentation or that anybody was mislead by the act of the defendant using the word “SONY” and naming his shop as 'Sony Travelling goods'. His small shop has been in existence for a long time and he has earned goodwill. Under these circumstances, according to the learned counsel, the court ought to have dismissed the action. 7. The learned counsel appearing for the respondent on the other hand pointed out that the court below was not :4: R.F.A.No. 140 of 2005 justified in declining to grant relief on the basis of registered trademark for the reason that the goods dealt with by the plaintiff are entirely different from the goods dealt with by the defendant. It omitted to note Section 29 (4) of the Trade marks Act, 1999 which deals with the concept of dilution of trade marks also. That ought to have been found in favour of the plaintiff. It was also contended that the court below was perfectly justified in coming to the conclusion that the defendant is guilty of the mischief of passing off, on the basis of evidence adduced in the case. The goodwill and reputation necessary to attract passing off have been established by the plaintiff, so says the counsel. The learned counsel also drew attention of this Court to the investigation report obtained by the plaintiff which is marked as Ext.P13. That report would show that the defendant was selling articles with the label 'SONY”. The learned counsel also drew attention of this Court to the fact that the lower court was not correct in its approach in :5: R.F.A.No. 140 of 2005 holding that since the articles manufactured, dealt with and sold by the plaintiff’s Corporation related to electronic goods and equipments there cannot be an infringement of the registered trade mark. In fact the corporation had applied for registration of trade mark in relation to entry No.18 which relates to leather bags etc. The same were the items that were being sold by the defendant. The learned counsel went on to contend that, at any rate, it is clear that the defendant has committed the mischief of passing off and there are no grounds made out to interfere with the judgment and decree of the court below. 8. The lower court has come to the conclusion that since the registration of Corporation as on the date of the suit related to the electronic goods only, it cannot be extended to the nature of business carried on by the defendant, which was entirely different, as he dealt with travelling goods and articles. The lower court does refer to the fact that though the Corporation had applied for the :6: R.F.A.No. 140 of 2005 registration of trade mark in relation to the leather bags etc., since as on the date of suit it was not registered, it could not be said that there is infringement of trade mark as far as the business carried on by the defendant is concerned whose business essentially was related to retail sale of bags, suit cases, umbrellas, raincoats etc. But as already stated for reasons given by the court below, it was found that there was passing off. 9. Before going to the details of the case and the evidence adduced on record, it is necessary to understand what constitutes infringement of trade mark and passing off. 10. According to the Trade Mark Act, 1999, Mark is defined as follows:- 2(m) “mark” includes a device,brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof; 11. Trade mark is defined as follows:- (zb)“trade mark” means a mark capable of being :7: R.F.A.No. 140 of 2005 represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and -- (i) in relation to the Chapter XII (other than Section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and (ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to the goods or services for the purpose of indicating or so to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark; 12. Section 27 reads as follows:- 27. No action for infringement of unregistered trade mark.-(1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark. :8: R.F.A.No. 140 of 2005 (2) Nothing in this Act be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another persn, or the remedies in respect thereof. 13. Section 29 reads as follows:- 29. Infringement of registered trade marks:- (1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of mark likely to be taken as being used as a trade mark. (2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way permitted use, uses in the course of trade, a mark which because of -- (a) its identity with the registered trade mark and the similarity or the goods or services covered by such registered trade mark:, or (b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark;,or (c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trademark, :9: R.F.A.No. 140 of 2005 is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark. (3) In any case falling under clause(c) sub-section (2), the court shall presume that is likely to cause confusion on the part of the public. (4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which-- (a)is identical with or similar to the registered trade mark; (b)is used in relation to goods or services which are not similar to those for which the trade mark is registered; and (c)the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair adavantage of or is detrimental to, the distinctive character of repute of the registered trade mark. (5) A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered. (6) For the purpose of this section, a person uses a registered mark, if, in particular, he- (a) affixes it to goods or packaging thereof: (b) Offers or exposes goods for sale, puts :10: R.F.A.No. 140 of 2005 them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark; (c) imports or exports goods under the mark;, or (d) uses the registered trade mark on business papers or in adverting. (7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee. (8) A registered trade mark is infringed by any advertising-- (a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or (b) is detrimental to its distinctive character; or (c) is against the reputation of the trade mark. (9) Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall be construed accordingly. :11: R.F.A.No. 140 of 2005 14. In short, a trade mark is a word, symbol or phrase used to identify a particular manufacturer’s or seller’s products and distinguish them from the product of others. It is under certain circumstances, trade mark protection is extended beyond words, symbols, phrases includes other aspects of a product such as its colour and packaging. Trade mark makes it easier for consumers to quickly identify the source of a given product. Action for unregistered trademark is provided by Section 27 while action for infringement of registered trade mark is provided under Section 29 of the Trade Marks Act,1999 (hereinafter referred to Act 47 of 1999). Infact, till the inclusion of Section 27(2) in the Act passing off action was considered as a common law remedy. The said mischief has now been given statutory recognition. 15. Passing off and infringement of trade mark are actions relating to intellectual property rights. Intellectual property rights creates and tries to protect the rights of :12: R.F.A.No. 140 of 2005 owners and creators of work, which had resulted in the creativity. Rights may relate to literature, music, inventions etc. The intellectual property laws assign exclusionary rights to the creators or inventors against any misappropriation or use of the work without prior knowledge of the creator of the work or inventor. 16. Modern capitalism is designed and devised to sell products and services by means of some mark, brand or name. This attitude has invaded into all fields. Trade marks arise to afford protection against unfair imitation of marks and names. The trade mark Act 1999, broadly offer two types of protection namely; 1. Infringement of registered trademark and 2. Passing off action. 17. Kerly's Law of Trade Marks and Trade Names, 12th Edn. at page 292 draws distinction between infringement of trade mark and passing off as follows: “Although many of the principles applicable are common to both forms of action (and the two are habitually combined in a single action), it is essential to deal separately with actions which are brought to prevent or to recover damages for the :13: R.F.A.No. 140 of 2005 infringement of trade or service mark, and with those which are compendiously described as “passing -off actions.” In an action of the first class the plaintiff complains that the defendant has infringed his mark by taking it in its entirety, or by taking a substantial portion of it, or by colourably imitating it, and he relies on his statutory title to the exclusive use of the mark in question for goods or services of a specified kind; in an action of the second class the plaintiff's case is less specialised, for he complains that the defendant is using means which are calculated to pass-off, or to cause to be passed-off, the goods or business of the defendant as and for those of the plaintiff, and the means may or may not comprise or consist of the taking of a mark, either registered or not.” 18. In Law of Trade Marks and Geographical Indications by K.C.Kailasam and Ramu Vadaraman, 2003 Edn. at page 356 the distinction is drawn thus: “The issue in a passing off action is: would the user of the defendants, either the actual user proved in evidence or the proposed user conceded for the purposes of action, be likely to lead person, either members of the trade or of the public, to suppose that the goods so sold were the product of the plaintiffs or that the business concerned in their production was the plaintiff or was associated with the plaintiff's business. The issue in an infringement action is: Are the defendants proposing to use a mark which is identical with the registered trademark of the plaintiff or which so nearly resembles it as to e likely in normal course of trade to deceive or cause confusion to persons who are brought into contact with it. In an infringement action, once it is found that the defendant's mark is used as a trademark, the fact that he makes it clear that the commercial :14: R.F.A.No. 140 of 2005 origin of the goods indicated by the trademark in some business other than that of the plaintiffs, avails him nothing, since infringement consists in using the mark as a trademark i.e. as indicating origin.” 19. In Intellectual Property by P. Narayanan, 3rd Edn. at page 222 the author tabulates the difference between infringement of trade mark and action for passing off. 20. It is usually stated that the action for infringement is a statutory remedy, while action for passing off is usually treated as a common law remedy intending to protect unregistered trade mark. 21. In the decision reported in Jaleel Associates v. Hotel Sagar (2005(1) K.L.T.757) this court has observed that in view of Section 27 of the Trade Marks act it could no longer be said that passing off action is a common law remedy. 22. There are umpteen number of decisions drawing the distinction between infringement and passing off. 23. Some of the decisions are (1). Durga Dutt Sharma :15: R.F.A.No. 140 of 2005 V. N.P.Laboratories[AIR 1965 SC 980], (2).Parle Products V.J.P.&Co.Mysore[AIR 1972 SC 1359], (3).Moideen V. Vasu [1980 KLT 325], (4). A.C.Krishnan V. Nambisans Dairy Pvt.Ltd[1997(1) KLT 163], (5). SM Dychem Ltd V. Cadbury (India) Ltd [AIR 2000 (5) SCC 573], (6).Satyam Infoway Ltd V.Sifynet Solutions Pvt.Ltd[AIR 2004 SC 3540], (7). Preme V. Ambujakshan[2006(1) KLT 905] 24. It is unnecessary to refer to the all the above decisions except the one reported Preme v. Ambujakshan [2006(1) KLT 905] where in the other the decisions on the point has been referred to. In the said decision, it is held as follows:- “6. There is difference between an action for passing off and action for infringement of trade mark. An action for passing off is a common law remedy being in substance an action for deceipt. It is a passing off by a person of his own goods, as those of another. The action for infringement of trade mark is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of his exclusive right to the use of the trade mark in relation to those goods as provided under the Trade Marks act. the use by the defendant of the :16: R.F.A.No. 140 of 2005 trade mark of the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement. May be that where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a colourable imitation of a trade mark in a passing off action would also be such in an action for infringement of the same trade mark. In an action for infringement, plaintiff must make out that the use of the defendant's mark is likely to deceive, where the similarity between the plaintiff's and the defendant's mark is so close either visually, phonetically or otherwise when the court reaches the conclusion that there is an imitation, no further evidence is required to establish that plaintiff's rights are violated. If the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences or indicate clearly a trade origin different from that of the registered proprietor of the mark would be immaterial. But in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff. Once the use by the defendant of the mark which is claimed to infringe the plaintiff's mark is shown to be in the course of trade the question whether there has been an infringement is to be decided by comparison of the two marks. Once the two marks are identical, the infringement is made out. Once two marks are not identical, plaintiff would have to establish that the mark used by the defendant so nearly resembles the plaintiff's registered trade as is likely to deceive or cause confusion in relation to goods in respect of which it is :17: R.F.A.No. 140 of 2005 registered. But this question is not relevant in an action for passing off. The basis of an action for passing off is a false representation by the defendant. The purpose of an action for passing off is not only to protect the commerce and goodwill, but also to ensure that the purchasers were not exploited and dishonest trading is prevented.” 25. It would appear from a reading of the decision that the two remedies available namely; the infringement of registered trade mark and passing off action are distinct and independent, but not mutually exclusive. As far as a registered trademark is concerned the applicant may able to seek remedy under both heads. But as far as infringement of unregistered trademark is concerned, the only remedy seems to be passing off action. First of all, in order to serve as a trademark, a mark must be distinctive. That means, it must be capable of identifying the source of a particular good. In distinguishing whether a mark is distinctive, the courts usually categorize the mark into four based on the relationship between the mark and the goods they intend to represent. They are:- 1. Arbitrary or fanciful 2. Suggestive 3. Descriptive 4.General. A trade mark :18: R.F.A.No. 140 of 2005 which qualifies for protection is acquired in two ways. They are:-1. User in prior point of time and 2. Being the first in registering the mark. Registration of a trade mark constitutes nationwide constructive notice to others that the trade mark is owned by a party and it enables the holder to sue for infringement in appropriate forum. 26. When one seller is using and adopting a trade mark ie. confusingly similar to the prior adopted and used trademark or registered trade mark of another seller that amounts to infringement of trademark. The standard is ’likelyhood of confusion’. 27. To be more precise and specific the use of a trade mark in connection with the sale of a good constitutes infringement if it is likely to cause confusion in the minds of the consumers regarding the source of goods or as to the sponsorship or approval of such goods. The facts that usually taken into consideration while considering the case of infringement are 1. The strength of the mark 2. The :19: R.F.A.No. 140 of 2005 proximity of the goods 3. Similarity of the marks 4. The evidence of actual confusion 5. Similarity of marketing channels used. 6. The degree of caution exercised by a typical purchaser 7. The defendants intend. 28. It is easy to understand as to why such practices are prohibited by law. If it was otherwise, it would cause confusion in the minds of the consumers and they could not be assured of the quality of the products they purchased. Further it is quite