IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN MONDAY, THE 26TH SEPTEMBER 2011 / 4TH ASWINA 1933 RFA.No. 269 of 2006() --------------------- OS.15/2005 of II ADDL.DISTRICT COURT,ERNAKULAM .................... APPELLANT: (DEFENDANT): --------------------------------------- AL SHIFA SUPER SPECIALTY HOSPITAL FOR PILES, RAJAJI ROAD, NEAR K.S.R.T.C. BUS STAND, ERNAKULAM, KOCHI-35, REPRESENTED BY ITS CHIEF EXECUTIVE. BY ADV. SRI.G.KRISHNAKUMAR SRI.B.S.SURAJ KRISHNA SRI.MANOJKUMAR MALLIA RESPONDENT(S): (PLAINTIFF): ----------------------------------------- AL SHIFA HOSPITAL PVT. LTD., REGISTERED OFFICE AT OOTY ROAD, PERINTALMANNA, MALAPPURAM DISTRICT, PIN-697 222, REPRESENTED BY ITS MANAGING DIRECTOR, SHRI P.UNNEEN. ADV. SRI.T.M.RAMAN KARTHA SRI.T.M.RAMAN KARTHA,COVEATOR THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 19/08/2011, THE COURT ON 26/09/2011 DELIVERED THE FOLLOWING: P. BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - R.F.A. No. 269 of 2006 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 26th day of September, 2011. JUDGMENT The defendant in O.S.15 of 2005, who suffered decree in a passing of action is the appellant. 2. The plaintiff hospital established in 1989 is well equipped and offers specialised treatments for various ailments. It also runs several sister institutions. They have adopted the mark of 'Al-Shifa Hospital'. By virtue of long, continuous and extensive user of the said mark, it has become a house hold name. Patients from abroad knowing about the quality of the service offered by the hospital come for treatment. The plaintiffs claimed that they moved an application for registration of the above mark. According to the plaintiff, they have spent huge amounts for advertisement of the mark 'Al-Shifa Hospital' and the name has acquired a distinctive character. The hospital has R.F.A.269/2006. 2 earned goodwill and high reputation in the process. The complaint was that the plaintiff happened to come across a few advertisements made mention of in the plaint in leading newspapers in respect of a hospital run by the defendant, which also carried the name Al-Shifa followed by Super Speciality Hospital for Piles. The grievance of the plaintiff is that the name so adopted by the defendant is phonetically, visually, structurally, constitutionally and literally a replica of the plaintiff's reputed service mark. They would accuse the defendant of fraudulently adopting the said mark and has caused damages to them. Noting the deception, the plaintiff is said to have issued notice to the defendant asking them to desist from the representations being made by them. The defendant chose not only not to respond to the notice, but they carried on the campaign with added vigour. This has left the plaintiff with no other remedy than to approach the court for necessary reliefs. R.F.A.269/2006. 3 3. The defendant resisted the suit. The defendant pointed out that they were not aware of the quality of the service offered or reputation enjoyed by the plaintiff's hospital. They disputed the tall claims set up by the plaintiff. It was pointed out by the defendant that they have specialized in particular field only. It is wrong to claim that the plaintiff is entitled to have exclusive use of the word Al-Shifa Hospital. The technology, mode of treatment etc adopted by the defendant is entirely different from the one being carried on by the plaintiff. The so-called complaint of deception and misconception and the possibility of misunderstanding are without any basis. The defendant too claimed that they had acquired proprietary right over the mark Al-Shifa Super Speciality Hospital for Piles. Except for the words, namely, Al-Shifa, there is nothing in common between the two institutions. They also pointed out that Shifa, an Arabic word, means cure, and it is a descriptive word. Therefore no proprietary right can be acquired over R.F.A.269/2006. 4 the same. It is also their contention that there are several institutions, concerns and other business ventures having the name Al-Shifa. They denied that they had ever made any attempt to show that they had anything to do with Al-Shifa Hospital, namely the plaintiff. The persons who wish to avail of the services extended by the plaintiff or defendant cannot be deceived by the claim because they would make sufficient enquiries before they approach the hospital for treatment. They also disputed that the plaintiff enjoyed a goodwill and reputation. On the basis of these contentions they prayed for a dismissal of the suit. 4. On the above pleadings, issues were raised by the court below. The evidence consists of the testimony of P.Ws. 1 to 3 and documents marked as Exts.A1 to A18 from the side of the plaintiff. The defendant had D.Ws.1 and 2 examined and Exts.B1 to B11 marked. On an analysis of the evidence in the case, the trial court came to the conclusion that the defendant is guilty of mischief of passing off and R.F.A.269/2006. 5 granted a decree in favour of the plaintiff, which reads as follows: “In the result, suit is decreed in part declaring that the service marks “Al-Shifa Hospital” and “Al-Shifa” are the exclusive service marks of the plaintiff and defendant is restrained by a decree of permanent prohibitory injunction restraining the defendant from using the said name and mark in any manner. The plaintiff is also granted a decree for mandatory injunction directing the defendant and his men to deliver invoice bill, printed materials, printing block, seals and other materials bearing service marks “Al-Shifa” for the purpose of destruction. The defendant shall also pay cost of the suit to the plaintiff.” 5. It is the above judgment and decree that is assailed in this appeal. 6. After having heard counsel on both sides and after having perused the records in the case, it is felt that two questions arise for consideration in this case. They are R.F.A.269/2006. 6 (i) whether the finding of the court below that the defendant is guilty of the mischief of passing off is justified and (ii) whether the plaintiff is entitled to a decree as is now granted. 7. At the outset itself one may notice that both function in the same field. Both extend medical services to the public. After going through the evidence, there is little doubt regarding the fact that the plaintiff seems to have adopted the word Al-Shifa prior in point of time to the defendant. The records would disclose that the defendant started functioning in 2002 only. The plaintiff would claim that they are entitled to the exclusive use of the word Al-Shifa and the defendant cannot appropriate that name. According to the plaintiff, the use of the word Al-Shifa by the defendant created confusion in the minds of the general public and they have received several queries as to whether the defendant is a branch of the plaintiff hospital. They also assert that they have received complaints regarding the R.F.A.269/2006. 7 defendant hospital and that affected the goodwill and reputation earned and enjoyed by the plaintiff. They claim to have obtained registration of the trade mark used by them. 8. The defendant would counter this claim of the plaintiff by pointing out that absolutely no confusion is caused in the mind of any person who wishes to avail the service rendered by the plaintiff or defendant by the use of the name Al-Shifa. The defendant holds itself out as Al-Shifa Super Speciality Hospital for Piles and it stationed at Ernakulam, whereas the plaintiff is represented as Al-Shifa Hospital Pvt. Ltd. at Perinthalmanna. They too claimed to have obtained registration of their trade mark. The defendant would also point out that visually, structurally and literally the two marks are entirely different and distinguishable. 9. Before going into the merits of the case, it is necessary to understand the difference between R.F.A.269/2006. 8 infringement of trade mark and passing off action. Infringement of trade mark is a statutory remedy and to avail of that remedy a particular trade mark has to be registered. An unregistered trade mark gets protection under Section 27 of Trade Marks Act and passing off action was usually referred to as a common law remedy. In the decision reported in Durga Dutt Sharma v. N.P. Laboratories (AIR 1965 SC 980) difference was pointed out as follows: “These matters which are of the essence of the cause of action for relief on the ground of passing off play but a limited role in an action for infringement of a registered trade mark by the registered proprietor who has a statutory right to that mark and who has a statutory remedy in the event of the use by another that mark or a colourable imitation thereof. While an action for passing off is a common law remedy being in substance an action for deceit, that is, a passing off by a person of his own goods as those of another, that is not the gist of an action for R.F.A.269/2006. 9 infringement. The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of “the exclusive right to the use of the trade mark in relation to those goods”. The use by the defendant of that 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. No doubt, 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. But there the correspondence between the two ceases. In an action for infringement, the plaintiff must, no doubt, make out that the use of the defendant's mark is likely to deceive, but where the similarity between the plaintiff's and the defendant's mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further evidence is R.F.A.269/2006. 10 required to establish that the plaintiff's rights are violated. Expressed in another way, 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 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; whereas in the case of pass 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.” 10. In the decision reported in Parle Products v. J.P. & Co. Mysore (AIR 1972 SC 1359) after referring to the decision reported in Durga Dutt Sharma's case (supra) it was held as follows: “To decide the question as to whether the plaintiff's right to a trade has been infringed in a particular case, the approach must not be that in an action for passing off goods of the defendant as and for those of the plaintiff. According to this R.F.A.269/2006. 11 Court in Durga Dutt v. Navratna Pharmaceutical Laborataries: “While an action for passing off is a common law remedy being in substance an action for deceit, that is, a passing off by a person of his own goods as those of another, that is not the gist of an action for infringement. The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of “the exclusive right to the use of the trade mark in relation to those goods”. The use by the defendant of that 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.” In the above case the court further pointed out: “In an action for infringement, the plaintiff must, no doubt, make out that the use of the defendant's mark is likely to deceive, but where the similarity between the plaintiff's and the defendant's mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further R.F.A.269/2006. 12 evidence is required to establish that the plaintiff's rights are violated. Expressed in another way, 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 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; whereas in the case of pass 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.”” 11. In the decision reported in A.C.Krishnan v. Nambisan's Dairy Pvt. Ltd. (1997(1) K.L.T. 163) it was held as follows: “An action for passing off is a common law remedy being in substance an action for deceit, a passing off by a person of his goods as those of another. The gist of an action for infringement is different. The action for infringement is a statutory remedy conferred on the registered R.F.A.269/2006. 13 proprietor of a registered trade mark for the indication of his exclusive right to the use of the trade mark in relation to his goods. The use by the defendant of the trade mark of the plaintiff is not essential in action for passing off, but is the sine qua non in an action for infringement. Where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential feature of both the actions may coincide in the sense that what would be a colourable limitation of a trade mark in a passing off action would also be such in an action for infringement of the same trade mark. But the correspondence between the two ceases there. An in an action for infringement, the plaintiff must not only make out that the use of the defendant's mark is likely to deceive, but where the similarity between the plaintiff's and the defendants mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is limitation, no further evidence is required to establish that the plaintiff's rights are violated. The length of user of a mark will also be material factor for the mark to become distinctive and R.F.A.269/2006. 14 exclusively associated with the goods of the plaintiff. Supreme Court pointed out the distinction between infringement action and passing off action. The former is a statutory right and if the trade mark of the defendant is identical with the plaintiff's mark, the court will not enquire whether the infringement is such as is likely to deceive or cause confusion. But, if the alleged infringement is not in using the exact mark, but something similar, then the test of infringement is the same as in an action for passing off. And the gist of the latter is that the defendant is not entitled to represent his goods as the goods of the plaintiff. But, it is not necessary for the plaintiff to prove that the defendant did this knowingly or with any intent to deceive. It is enough in a passing off action that the get up of the plaintiff's goods has become distinctive and that there is a possibility of confusion between them and the goods of the defendant. No case of actual deception need be proved.” R.F.A.269/2006. 15 12. In the decision reported in S.M.Dyechem Ltd. v. Cadbury (India) Ltd. ((2000) 5 SCC 573) it was held as follows: “It is no answer to a charge of infringement - as contrasted with a passing-off action - that the defendant's mark, whilst including the plaintiff's mark, includes other matters too. Still less is it an answer that by something outside that actual mark the defendant has distinguished his goods from those of the plaintiff - by adding his own name. But this principle is not absolute. It is also accepted that addition of his own name by the defendant is an element to be considered and may turn the scales in favour of the defendant. In the same para Kerly says: “But the use of the defendant's name as part of the mark complained of is an element to be considered and in some cases it has turned the scale in his favour.”” 13. In the decision reported in Preme v. Ambujakshan (2006 (1) K.L.T. 905) it was held as follows: R.F.A.269/2006. 16 “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 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, R.F.A.269/2006. 17 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.” 14. A reading of the above decisions leaves one in no doubt that there is clear distinction between an action for infringement of trade mark and action for passing off. Even assuming that one may not get a relief on complaint of infringement of trade mark, still he may be successful with regard to the grievance of passing off action. While the complaint of infringement is concerned with a right of the proprietor of the registered trade mark, the gist of action for passing off is deceit and misrepresentation. 15. It will be useful at this point of time to find out as to what one means by passing off. Usually passing off is treated as a common law tort used to protect unregistered trade mark right. The legal and economic basis of this tort is R.F.A.269/2006. 18 to provide protection for the right of property which exists not in particular name, mark or style but in an established business or professional reputation or goodwill. The true basis of the action is now held to be that passing off injures the right of property in the plaintiff. It affects the goodwill and reputation of his business. The gist of the concept of passing off is that the goods are telling falsehood and are saying something about themselves to mislead. The law of passing off prevents a person from selling his goods as the goods of somebody else. What is protected by passing of faction is an economic asset. The fundamental principle behind passing off is that one man has no right to put his goods for sale as the goods of a rival trader. It seeks to protect the traders from unfair competition which involves false or misleading representation using the reputation and goodwill earned by somebody else. It seeks to prevent the intrusion of rivals upon the goodwill and reputation earned by another in services. A person is therefore precluded from R.F.A.269/2006. 19 using the trade mark, letters or names which may induce the clients or consumers to believe that the goods which he is selling are actually of somebody else. In Halsbury's Laws of England, 4th Edition, Vol.48 at page 185 Note 297, the elements of passing off action are enumerated as follows: “Elements of the action for passing off: The necessary elements of the action for passing off have been restated by the House of Lords as being three in number: (1) that the claimant's goods or services have acquired a goodwill or reputation in the market and are known by some distinguishing feature; (2) that there is a misrepresentation by the defendant (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by the defendant are goods or services of the claimant; and (3) that the claimant has suffered or is likely to suffer damage as a result of the erroneous belief engendered by the defendant's misrepresentation. R.F.A.269/2006. 20 The restatement of the elements of passing off in the form of this classical trinity has been preferred as providing greater assistance in analysis and decision that the formulation of the elements of the action previously expressed by the House. This latest statement like the House's previous statement, should not, however, be treated as akin to a statutory definition or as if the words used by the House constitute an exhaustive, literal definition of passing off and in particular, should not be used to exclude from the ambit of the tort recognised forms of the action for passing off which were not under consideration on the facts before the House.” The very same ingredients are seen mentioned in Halsbury's Laws of India Vol.20(1) at note 185.1358. The characteristics of a passing-off action are made mention of at Note 185.1357 in Halsbury's Laws of India Vol.20(1), which read as follows: “An action for passing-off is a common law remedy being an action in substance of deceit under the law of tort. The following five R.F.A.269/2006. 21 characteristics which must be present in order to create a valid cause of action for passing-off are: (1) misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his ultimate customers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader in the sense that there is a reasonably foreseeable consequence, and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought, or in a quia timet action, will probably do so.” The principle relating to passing off is considered in the decision reported in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. ((2001) 5 SCC 73), wherein it was held as follows: “As far as this court is concerned, the decisions in the last four decades have clearly laid down that what has to be seen in the case of a R.F.A.269/2006. 22 passing off action is the similarity between the competing marks and to determine whether there is likelihood of deception or causing confusion. This is evident from the decisions of this court in the cases of National Sewing Thread Co.Ltd. case, Corn Products Refining Co. case, Amritdhara Pharmacy case, Durga Dutt Sharma case and Hoffmann-La Roche & Co. Ltd. Case. Having come to the conclusion, in our opinion incorrectly, that the difference in essential features is relevant, this Court in Dyechem case sought to examine the