1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. NOTICE OF MOTION NO.3845 OF 2007 IN SUIT NO.2808 OF 2007 M/s.D. R. Cosmetics Pvt. Ltd. & Anr. ...Plaintiffs. Vs. M/s. J. R. Industries. ...Defendant. .... Mr. V. R. Dhond with Mr. Sandeep Parekh i/b. Mr. K. S. Pachoo and Mr. Avesh Kayer for the Plaintiffs. Mr.Mahesh A. Mahadgut with Ms. Deepali Bhalekar i/b. M/s. Bilawala & Co. for the Defendant. ..... CORAM :DR.D.Y.CHANDRACHUD, J. January 11, 2008. JUDGMENT: The Plaintiffs seek interlocutory relief in an action for passing off and infringement. 2. The First Plaintiff is a Company incorporated under the provisions of the Companies' Act, 1956. The Second Plaintiff is a Director of the Company. Prior to the incorporation of the First Plaintiff, a business of manufacturing and marketing soap strips was 2 carried on by a proprietary firm of Dhanvantrai Ramshankar Joshi. The case of the Plaintiffs is that the First Plaintiff was incorporated on 30th March 1999 to convert, as a going concern, the existing proprietory business together with its name, goodwill, licence, assets and liabilities into a corporate entity. The First Plaintiff was initially known as Dhanvantrai Ramshankar Cosmetics Pvt. Ltd. In pursuance of a certificate issued on 21st May 2002 by the Registrar of Companies, the name of the Company has been abbreviated to D.R. Cosmetics Pvt.Ltd. The Directors of the Company are members of the family of the erstwhile proprietor who has since expired. 3. The primary business of the Plaintiffs consists of the manufacture, marketing, distribution, export and sale of soaps and soap products. A trade mark called BUFIN was conceived by the Plaintiffs' predecessors-in-title in 1972. Registration of the mark was granted on 7th April 1972 to the erstwhile proprietor in Class 3, in respect of soaps, cosmetics, non-medicated toilet preparations and shampoo. The registration was renewed on 7th April 2000 for seven years and continues to subsist on the Register. On 27th November 3 2003, the Plaintiffs applied for registration of a label mark which was allowed on 3rd September 2005. The registration dates back to the application for registration. On 12th September 2003, the First Plaintiff requested the Registrar of Trade Marks to enter its name in the Register as a proprietor of the trade mark “BUFIN”, bearing No.279406 and registered in Class 3. This application was allowed by a communication dated 26th October 2007 of the Trade Mark Registry. 4. The Plaintiffs have disclosed in Exhibit D to the Plaint details of their sales and of the advertising expenses from 1st April 1973 till 31st March 2007. The sales figures which stood at Rs. 5.10 lakhs for the year 1978-79, increased to Rs. 45.92 lakhs for 1993-94, Rs. 1.04 crores for 2000-01 and Rs. 1.19 crores for 2004-05. The Plaintiffs have annexed, inter alia, invoices commencing from the year 1978 and bills raised by the advertising agencies. 5. The Plaintiffs manufacture soap strips which consist of a special paper on which a thin coating of soap is applied. The strips of 4 soap are bound together in packs of ten from which each strip can be conveniently removed. Rubbing the soap strip on a wet surface generates lather. According to the Plaintiffs, these strips of soap are particularly useful for maintaining personal hygiene in the course of travel. A label mark is stated to have been adopted in 1983 which inter alia consists of an artistic work. The label mark comprises of the device of a woman with lathered hands resting upon her face. The mark BUFIN appears prominently thereon. The label contains details of the date of manufacture, the licence and batch number and of the Total Fatty Matter (TFM). 6. In or about September 2003, the Plaintiffs claim to have learnt of the use of an allegedly deceptive word mark by the name of BUFER by the Defendant with a label possessing a similar colour scheme and get up. The Plaintiffs filed a criminal complaint on 12th September 2003. On 24th September 2003, the Metropolitan Magistrate in the 25th Court at Mazgaon, directed an investigation under Section 156(3) of the Code of Criminal Procedure, 1973. The Senior Examiner of Trade Marks furnished an opinion to the 5 Investigating Officer on 9th February 2004. On 13th November 2004, a report was submitted to the Magistrate that the Police did not find substance in the complaint. An application for further investigation was thereupon dismissed and on 7th April 2005, a B-summary was granted in accordance with the prayer of the Investigating Officer. The suit before this Court was instituted on 27th August 2007 for infringement and passing off. 7. Affidavits have been filed in reply to the Motion for interim relief. The Plaintiffs have sought an injunction restraining the Defendant from using the mark BUFER so as to infringe the Plaintiffs' registered trade mark BUFIN and from using a label mark so as to infringe the registered label mark of the Plaintiffs. Interlocutory relief has also been sought for restraining the Defendant from using the mark BUFER or any other mark identical to or deceptively similar to the mark of the Plaintiffs. 8. On behalf of the Plaintiffs it has been submitted that (i) The Plaintiffs have used the mark BUFIN over a long period of time, since 6 1972; (ii) The Defendant commenced business in 2003 and cannot claim to be unaware of the prior use of the mark BUFIN by the Plaintiffs; (iii) In any event, a diligent search of the Trade Mark Register would have revealed to the Defendant the registration of the mark BUFIN in the name of the Plaintiffs; (iv) The word mark of the Defendant is deceptively similar to the mark of the Plaintiffs and the label mark adopted by the Defendant adopts a device, layout and colour scheme which is also deceptively similar; and (v) The Defendant has no cogent explanation of how it came to use the mark BUFER in the first place. 9. On the other hand, it has been urged on behalf of the Defendant that (i) There has been an unexplained delay on the part of the Plaintiffs in moving the Court inasmuch as the Defendant had commenced business in 2003, whereas the suit was instituted only in 2007 and the delay is such as to warrant an inference that there has been an acquiescence on the part of the Plaintiffs; (ii) The Plaintiffs have not established any proprietary interest in the mark BUFIN; the other heirs of the erstwhile proprietor have not been impleaded to the 7 proceedings and the Plaintiffs would be disentitled to the interlocutory relief; (iii) The Defendant has a valid and cogent explanation on affidavit for the use of the word mark BUFER; (iv) Other products in the trade are prima facie shown to use the same device on their labels, as adopted by the Defendant which would belie the claim of the Plaintiffs to exclusivity; and (v) A comparison of the rival marks – BUFIN of the Plaintiffs and BUFER of the Defendant would show that the mark of the Defendant is not deceptively similar. 10. In considering the rival submissions of the parties, it would be necessary to note at the outset that the material on the record would prima facie indicate that the mark BUFIN was registered on 7th April 1972 in the name of Dhavantrai Ramshankar Joshi who carried on business through a proprietary concern. The First Plaintiff was incorporated on 30th March 1999 and one of the principal objects underlying the incorporation of the Company was stated to be thus in the Memorandum of Association: “1. To convert as a going concern the existing Proprietorship business now carried on under the Name and Style of D.R. JOSHI at PLOT NO: C-2/10, ROAD B, 1ST PHASE, GIDC INDUSTRIAL ESTATE, VAPI, Dist. 8 VALSAD, GUJARAT STATE with its name, goodwill, licenses, assets, liabilities etc. provided that the said proprietorship business shall stand dissolved after such take over.” A label mark consisting of the mark BUFIN and a pictorial device of a woman cleaning her face with lathered hands was registered on 3rd September 2005. In pursuance of an application filed by the First Plaintiff on 12th September 2003, a communication was issued by the Trade Mark Registry on 26th October 2007, granting the request for entering the name of the First Plaintiff in the Register of Trade Marks as a proprietor of the mark 'BUFIN' which has been registered in class 3. The material on record would prima facie indicate an extensive use of the mark BUFIN since 1st April 1973. The sales figures disclosed in Exhibit D to the Plaint reveal the sizable extent of the turnover of the business which, between the years 2000 and 2005, was in excess of Rs.1 crore per annum. 11. The Defendant commenced business in 2003, well over three decades after the commencement of the use of the mark BUFIN by the predecessor-in-interest of the Plaintiffs. The product which is 9 manufactured and sold by the Defendant is identical to the product of the Plaintiffs. The mark of the Plaintiffs is called BUFIN. The mark of the Defendant, BUFER is deceptively similar. In assessing the question of deceptive similarity, the Court must have due regard to the two marks as they stand and to all the surrounding circumstances including the nature of the product, the class of customers and the channels through which the trade is carried on. The similarity between the mark BUFIN of the Plaintiffs and the mark BUFER adopted by the Defendant is striking. The class of customers who would use such products is not necessarily highly educated and such purchases are generally made on the spot. Comparing the two marks as they stand, there is prima facie merit in the case of the Plaintiffs that the mark of the Defendant bears a striking resemblance to the mark of the Plaintiffs and the use of the offending mark would trade on the reputation established by the Plaintiffs in the course of over three decades of manufacture and sale. 12. In this background, an important circumstance which must weigh with the Court is the absence, prima facie, of a valid or cogent 10 explanation on the part of the Defendant for the adoption of the mark. The explanation of the Defendant is that soap is made with a mixture of alkali (caustic soda plus water) and a manufacturer has to maintain the solution with a constant pH value. Such a mixture is called an acidic or alkaline buffer solution and the word buffer or buffer solution is defined as one which has a definite pH. The Defendant claims that in 2003 when he intended to start his business, he had gathered scientific information and came to know about the buffer solution involved in manufacturing soap. The Defendant claims that he wished to adopt a slogan which would match the nature of the product and the slogan which he has adopted is “Safar Mein Sathi Bufer”. 13. Prima facie, in my view, the explanation furnished by the Defendant for the adoption of the mark BUFER is an afterthought and cannot be regarded as a genuine and honest adoption of the mark. The Defendant, it must be emphasized, is not a seller of a chemical or a chemical product, but a product which is in the nature of a non- medicinal toilet preparation. The use of the expression “BUFER” does not square up either with the nature of the product or the 11 business of the Defendant. The explanation of the slogan is a rather inartistic attempt to justify a crude attempt to pass off the goods of the Defendant as those of the Plaintiffs. The Defendant commenced business during the financial year 2003-04 and the sales figures disclosed on affidavit would show total sales of Rs. 2.03 lakhs for that year which increased to Rs. 5.04 lakhs for the financial year 2006-07. A manufacturer in the position of the Defendant who intended to adopt the mark ought to have made a diligent search in the Trade Mark Registry for if he had done so, he would have found the existence of the mark BUFIN of the Plaintiffs on the Register. The Defendant did nothing of the kind. The Defendant cannot thus claim that he was unaware of the existence of the mark. 14. The principal defence of the Defendant is that there is a delay on the part of the Plaintiffs which would disentitle the Plaintiffs to interlocutory relief. The contention is that the Defendant commenced business in 2003 and that despite this being known to the Plaintiffs, a suit was instituted before the Court only in the month of August 2007. Now, the material before the Court would reveal that 12 the case of the Plaintiffs is that it was in September 2003 that they obtained knowledge that soap strips under a deceptively similar work mark/label were being marketed and sold. The Plaintiffs instituted a criminal complaint on 12th September 2003. The institution of the criminal complaint would prima facie lead to an inference that there was no acquiescence on the part of the Plaintiffs in the conduct of the business of the Defendant involving the use of the offending word and label mark. 15. The question as to whether a delay on the part of a Plaintiff in approaching the Court in an action for infringement or passing off is of such a nature and magnitude and in such circumstances as would disentitle the Plaintiff to relief cannot be determined on the basis of a priori considerations. The principle which underlies the concept of acquiescence is that a person who sits by indolently when another is invading his right cannot be heard to complain when by his acts and conduct he leads the other to substantially after his position. As far back as in the year 1880, in a judgment of the Chancery Division in Willmott v. Barber,1 it was held that an acquiescence which will 1 (1880) 15 Ch. D. 96 13 deprive a man of his legal rights must amount to a fraud for, a man ought not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights. One of the essential ingredients of the doctrine of acquiescence is that the possessor of the legal rights must have encouraged his adversary in expending money or in doing some other acts which he has done either directly or by abstaining from asserting his legal rights. 16. Kerly2 summarises the legal position by stating that: “In general mere delay after knowledge of infringement does not deprive the registered proprietor of a trade mark of his statutory rights or of the appropriate remedy for the enforcement of these rights. But inordinate delay can exceptionally provide a defence, and can also form a major ingredient in a case of acquiescence.” The law on the subject of acquiescence and laches was, according to Kerly, “rather technical and rather obscure”, an illustration of which 2Law of Trade Marks and Trade Names, Thirteenth Edition, 13 – 158, P.391 14 was provided by the “five probanda” in Willmott v. Barber. The relevant test now is the broader test, as enunciated in Habib Bank v. Habib Bank (1982) R.P.C. 1, which is “whether in all the circumstances it would be unconscionable to allow the claimant to maintain his claim.” 17. According to the restatement in Halsbury's Laws of England:3 “Acquiescence may bar a claim where the proprietor has in some way encouraged the infringer so that the subsequent enforcement of the right would be unconscionable. Mere delay on the claimant's part, even with knowledge of the Defendant's activities, does not amount to acquiescence, although inordinate delay will itself give rise to a defence.” The principle has been summarised thus in Corpus Juris:4 “Laches or delay must be accompanied by circumstances amounting to an abandonment or an estoppel before it constitutes any defense. Mere delay and silence, although with knowledge of infringement, do not amount to consent and are no bar to relief against a continuance of the infringement. Laches, acquiescence, or delay, under circumstances showing an abandonment, or otherwise rendering it inequitable to grant an injunction or other relief, constitutes a valid defense. Thus, a delay of several years before commencing action to restrain infringement with knowledge that the defendant was openly using the 3 Fourth Edition, paragraph 95 page 68. 4 Vol.87 p.525 15 infringing mark, and expending large sums in advertising his products thereunder, creating good will, has been held to constitute such laches as to require a court of equity to deny injunctive relief.” The Supreme Court established this as a matter of principle in the Indian law of trade marks in its judgment in Power Control Appliances vs. Sumeet Machines Pvt. Ltd.5 The Supreme Court held thus : 5 (1994) 2 SCC 448 16 “Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as in involved in laches. In Harcourt v. White ((1890) 28 Beav 303 : 54 ER 382)Sr. John Romilly said : “It is important to distinguish mere negligence and acquiescence”. Therefore, acquiescence is one facet of delay. If the plaintiff stood by knowingly and let the defendants build up an important trade until it had become necessary to crush it, then the plaintiffs would be estopped by their acquiescence. If the acquiescence in the infringement amounts to consent, it will be a complete defence as was laid down in Mouson (J.G.) & Co. v. Boehm, ((1884) 26 Ch D 406). The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant as was laid down in Rodgers v. Nowill ((1847) 2 De GM&G 614 : 22 LJ KCH 404). The Supreme Court noted, with approval, the dictum laid down in English judgments that a person who alleges this lying by should have been acting in ignorance of the title of the other man. In other words, it is necessary to establish that the Plaintiff stood by and knowingly allowed the Defendants to proceed and to expend money in ignorance of the title of the Plaintiff. 18. In Ramdeo Food Products (P) Ltd. vs. Arvindbhai 17 Rambhai Patel,6 the Supreme Court observed that acquiescence is a facet of delay and the principle postulates : “(i) Sitting by or allowing another to invade the rights and spending money on it; (ii) ... a course of conduct inconsistent with the claim for exclusive rights for trade mark, trade name, etc.” Taking note of the legal position that in an action for infringement, delay by itself may not be a ground for refusing an injunction, the Supreme Court observed thus: “The defence of acquiescence, thus, would be satisfied when the plaintiff assents to or lays by in relation to the acts of another person and in view of that assent or laying by and consequent acts it would be unjust in all the circumstances to grant the specific relief.” 19. A Division Bench of this Court revisited the issue of acquiescence and delay in Bal Pharma Ltd. vs. Centaur Laboratories Pvt Ltd.7 Mr.Justice B.N. Srikrishna, while delivering the judgment of the Court, held thus : “In a situation where the defendant to an action has been using the mark, even if concurrently, without making himself aware of the fact as to whether the same mark is the 6 (2006) 7 SCC 726 7 2002(24) PTC 226 18 subject matter of the registration and belongs to another person, the first person cannot be heard to complain for he has been using it negligently inasmuch as he has not taken the elementary precaution of making himself aware by looking at the public record of Registrar as to whether the mark in question is the property of another. If, however, he had taken search and, knowing full well that the mark was the property of another person, continues to use the mark, then he runs the risk of a registered proprietor challenging his action for infringement and merely because it is done at a subsequent stage, he cannot be heard to complain on the ground of delay. ... In order to deny an interlocutory injunction, the delay must be such as to have induced the defendant or at least to have lulled him into a false sense of security to continue to use the trade mark in the belief that he was the monarch of all he surveyed. In our judgment, such are not the circumstances here. We are not satisfied from the record that a search was taken of the registry by the Appellant to assure itself that there was no other person who owned the mark “MICRODINE”. Assuming that the search was taken, and the Appellant has done it consciously, then the Appellant has to thank itself for having gambled by investing large amounts in a risky venture. Either way, we do not think that the defence can succeed, at this stage, at least.” The same view has been reiterated in a judgment of S.J. Vazifdar, J. in Pidilite Industries Ltd. vs. S.M. Associates.8 The judgment of a Learned Single Judge of the Delhi High Court in Vikas Makhija vs. The Bengal Phenyle & Allied Products (P) Ltd.,9 is clearly 8 2004(28) PTC 193 (Bom) 9 2001 PTC 612 (Del) 19 distinguishable inasmuch as that involved a situation where there was a delay of nearly 30 years in the institution of the proceedings in circumstance which prima facie gave rise to an inference of an acquiescence. 20. In the present case, the material on record would not prima facie lead to an inference that the Plaintiffs had acquiesced in the use of the offending mark by the Defendant. It cannot be said that there was a positive act on the part of the Plaintiffs or that the Plaintiffs stood by and knowingly allowed the Defendant to proceed with the business based on the use of the offending word and label mark. On the contrary, the institution of the criminal complaint by the Plaintiffs would suggest an inference that the Plaintiffs were diligent in pursuing their remedies. A mere search by the Defendant would have been sufficient to indicate the existence of the registered word and label mark of the Plaintiffs and it would be no answer to submit, as Counsel for the Defendant did, that even if such a search was to be taken, the Defendant would have still adopted the same word and label marks on the supposition that they were not perceived as being 20 deceptively similar. If he did so, he did it at his peril and on the pain of being injuncted if there is found to be a deceptive similarity in the word and label marks used by the Defendant. 21. The other contention of the Defendant is that there are other products in which a similar device has been used as part of a label mark. While dealing with this submission, the Plaintiffs have stated in their rejoinder that this plea of the Defendant is bald and no evidence has been adduced to support that there are actual sales of such products in the market. There is prima facie merit in the contention of the Plaintiffs that merely annexing some label is not enough, in the absence of cogent proof of the actual conduct of business involving such label mark in the market. The Plaintiffs have also submitted that it is not possible to monitor all such competing products when such sales are small and in far flung areas of the country. The existence of more than one imitation cannot