IN THE HIGH COURT OF GUJARAT AT AHMEDABAD APPEAL FROM ORDER No 203 of 1999 with Civil Application No. 4743 of 1999 and Civil Application No. 7428 of 1999 For Approval and Signature: Hon'ble MR.JUSTICE A.M.KAPADIA ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO 1-2 yes - 3 to 5 No -------------------------------------------------------------- CADBURY INDIA LIMITED Versus SM DYECHEM LIMITED -------------------------------------------------------------- Appearance: Mr. Mihir Thakore, senior advocate with Mrs. S.M. Thakore, advocate for appellant. Mr. S.B. Vakil with Mr. A.S. Vakil and Mr. D.C. Dave, advocates for respondent. -------------------------------------------------------------- CORAM : MR.JUSTICE A.M.KAPADIA Date of decision: 24/08/1999 C.A.V. JUDGEMENT 1. Appellant, Cadbury India Limited, having lost the legal battle against respondent SM Dyechem Limited in the lower Court, has knocked the doors of this Court by filing this Appeal from Order with the aids of the provisions of Order 43 Rule 1 of the Civil Procedure Code ('the Code' for short), whereunder it challenged the order dated 23.3.1999 recorded below Ex.6 - Notice of Motion - in Civil Suit No. 852 of 1999, by learned Chamber Judge, City Civil Court, Ahmedabad, whereby he granted injunction against the appellant in terms of para 21(A) & (B) of the application restraining the appellant from infringing the respondent's trade mark "PIKNIK" which is registered under the provisions of Trade and Merchandise Marks Act, 1958 ('the Act' for short hereinafter) vide trade mark No. 505532 and to pass off the appellant's goods i.e., chocolate, chocolate preparations, wafer biscuits and/or the like goods as and for that of respondents, till the disposal of the suit. 2. Present appellant is the original defendant whereas present respondent is the original plaintiff and hence for the sake of convenience and brevity, the parties are hereinafter referred to as 'the plaintiff' and 'the defendant' respectively. 3. Before highlighting the nature of controversy posed for determination of this Court in this Appeal from Order, it is necessary to advert to a few but relevant facts of the case. 4. In nutshell the plaintiff's case is as under: 4.1. Plaintiff, SM Dyechem Limited, is a Public Limited Company incorporated under the provisions of the Companies Act and is carrying on their business of manufacturing and marketing of chemicals and chemical products and food products, including ready to eat snacks, such as potato crisps, potato chips, potato wafers, corn puffs, preparations made from rice and rice flour, preparations made from cereal, etc. 4.2. Defendant, Cadbury India Limited, is also a Public Limited Company incorporated under the provisions of the Companies Act and is carrying on business of manufacturing and selling chocolate preparations/wafer biscuits, snacks, etc. 4.3. In 1988, the plaintiff started business in the field of processing of food products, more particularly known as ready to eat snacks as mentioned hereinabove in their food division known as "SM Foods". In 1989, the plaintiff's said division developed and adopted a trade mark, in the name and style of "PIKNIK", in relation to ready to eat snacks processed by them. 4.4. After adoption of the said trade mark "PIKNIK", the plaintiff commenced use of the said trade mark in relation to ready to eat snacks processed by them and marketed the goods in the name and style of "PIKNIK". 4.5. The plaintiff is the lawful proprietor of the said trade mark since February 1989 and, therefore, on 17.2.1989 the Food Division of the plaintiff applied for registration of a label mark, containing the word "PIKNIK", under the Act, in class 29 in respect of preserved, dried and cooked fruits and vegetables, etc. under application No. 505531B. The plaintiff also applied for registration of the said trade mark in class 30 in respect of tea, coffee, etc. under application No.505532. The plaintiff also applied for registration of the said trade mark in class 32 in respect of beverages, beers, mineral and aerated waters, soda water, etc. under application No.505533. 4.6. The aforesaid three applications were processed and pursuant to the orders passed by the Registrar of Trade Marks, the plaintiff became the registered proprietor of said trade mark "PIKNIK" under Nos.505531B, 505532 and 505533 in Classes 29, 30 and 32 respectively. Since the plaintiff became the proprietor of the said trade mark, they are entitled to use exclusively the said trade mark in relation to the aforesaid goods and the plaintiff has a right to restrain others from using the same and/or similar trade mark. 4.7. It was further case of the plaintiff that since 1989, on an extensive and ever growing scale, the plaintiff has been expanding from time to time its range of ready to eat snacks and has been selling their goods bearing the said trade mark throughout the country with the help of wide network of stockists and dealers. 4.8. By virtue of intensive and extensive sales promotional efforts, adequately supplemented by widespread publicity all over the country, coupled with high standard of quality and controls adhered to by the plaintiff, the plaintiff's said goods have become very popular and acquired tremendous reputation and goodwill all over the country and the said goods became distinctive with the plaintiff and is exclusively identified by the trade and public with the plaintiff. 4.9. In sum and substance, the plaintiff's case is that they have painstakingly built up formidable reputation and goodwill in respect of the said trade mark "PIKNIK" and the enormous reputation and goodwill is reflected from the fact that the plaintiff's sale of said goods have been growing by leaps and bounds year after year. 4.10. The plaintiff's attention was drawn on a food product, being a chocolate preparation/wafer biscuits snacks marketed under the trade mark "PICNIC" purported to be manufactured by the defendant. As the trade mark used in respect of the goods being an eatable and was similar to the plaintiff's trade mark, which was also used for eatables, and the same was violating the rights of the plaintiff in respect of the said trade mark "PIKNIK", the plaintiff, through their trade mark attorney, caused a letter dated 16.3.1998, to be addressed to the defendant, recording some of the abovesaid facts and calling upon the defendant to cease and desist from the use of the trade mark "PICNIC" in relation to the impugned goods forthwith. The plaintiff also informed that the plaintiff is the registered proprietor of the said trade mark "PIKNIK" in relation to chocolate, biscuits and other foods products and, therefore, the use of the trade mark "PICNIC" by the defendant in respect of their chocolates, etc., was infringing the rights of the plaintiff in respect of the said trade mark "PIKNIK". The plaintiff also called upon the defendant to pay Rs.3 crores towards the damages in addition to the notice charges. 4.11. It was further case of the plaintiff that though the aforesaid letter was received by the defendant they failed to give any considered reply and as a matter of fact the defendant had conclusively failed to assign any cogent and justifiable reason for using the impugned trade mark "PICNIC". 4.12. In spite of the plaintiff calling upon the defendant to discontinue the use of the impugned trade mark, the defendant has continued to use the same and the defendant has failed and neglected to comply with the requisitions contained in the letter dated 16.3.1998 issued by the plaintiff's trade mark attorney and they have continued to openly advertise and sell the impugned goods under the plaintiff's trade mark. 4.13. According to the plaintiff, notwithstanding the above facts and with full knowledge that the plaintiff's range of food products or ready to eat snacks or eatables are sold under the trade mark "PIKNIK", the defendant, with fraudulent and dishonest intention of encashing and trading upon the plaintiff's goodwill and reputation, adopted and introduced chocolate preparations or wafers, biscuits, also being food products or ready to eat snacks or eatables under the same trade mark "PICNIC" knowing fully well about the fact that the word PIKNIK irrespective of manners in which it is either spelled or pronounced, the public is likely to be confused and/or deceived as to the origin of the impugned goods and public interest being of considerable importance, should not be allowed to be jeopardized and, therefore, the defendant should not be allowed to encash the reputation and goodwill of the plaintiff, by using the trade mark "PICNIC". It was further alleged that by using the trade mark "PICNIC", the defendant is violating the plaintiff's exclusive right in respect of said registered trade mark "PIKNIK". Hence, the suit was filed for perpetual injunction to restrain the defendant from in any manner using the trademark "PICNIC" in relation to chocolates, chocolate preparation, etc., or any other trade mark which is deceptively or confusingly similar in the manner whatsoever to the plaintiff's trademark "PIKNIK" so as to infringe the plaintiff's trade mark "PIKNIK" registered under No. 505532. 4.14. Along with the suit, application Ex.6, notice of motion, was also taken out by the plaintiff, wherein, inter alia, it was prayed for temporary injunction restraining the defendant from in any manner using the trade mark "PICNIC" or any other trade mark which is deceptively and confusingly similar in any manner whatsoever to the plaintiff's trade mark "PIKNIK" so as to infringe plaintiff's trade mark registered under No. 505532, in relation to chocolates, chocolate preparations, etc., and has also prayed for restraining the defendant from passing off the goods as and for that of the plaintiff. 4.15. The defendant hotly contested the application notice of motion- by filing reply at Ex.14, inter alia, contending that the plaintiff is not entitled to any relief on the ground of delay as the 'CADBURY'S PICNIC' was introduced in the market in February 1998. It was further case of the defendant that the trade mark "PICNIC" of the defendant was registered in the year 1977. It was contended that the trademark "PICNIC" of the defendant was registered by them earlier under No.329970 in Class 30 of the 4th Schedule to the Act. It was further averred that the defendant has filed a subsequent application for registration of the mark CADBURY PICNIC in August, 1996 under application No.712676. It was contended that the defendant's trade mark "CADBURY'S PICNIC" was considered by the Registrar who in any case had directed that the registration of the Trade Mark shall give no right to the exclusive use of the word "PICNIC", it being a common dictionary word. It was alleged that the plaintiff has obtained registration of a label mark containing the words PIK-NIK knowing fully well that they would never have been able to register the mark PIK-NIK or any imitation or a misspelling thereof as it is considered to be not distinctive. It was further contended that the word CADBURY PICNIC and/or "PICNIC" and/or label consisting of the word PICNIC is registered by the defendant's parent company in all over 110 countries all over the world and the application for the same or similar marks are pending in many other countries. It was further averred that by virtue of the existence of the registration world over and use of the mark PICNIC, the defendant's parent company has transborder reputation and goodwill and the plaintiff cannot claim monopoly in an ordinary dictionary word or any misspelling thereof. It was further contended that the plaintiff never intended to be in chocolates or confectionery business and the main business of the plaintiff was dyes and chemical. It was further averred that the business relating to food articles is merely ancillary and primarily confined extruded if it is falling in the category of "Namkin" or "Papads" and, therefore, it was alleged that the plaintiff has filed a fraudulent and frivolous suit to deliberately and purposely harass and defame and defendant's goodwill and denied that trademark of the defendant is similar to the plaintiff's label mark. It was contended that both the labels are different and distinct from each other. It was further contended that PICNIC or PIKNIK is ordinary dictionary word and ordinary dictionary word cannot be registered as a trademark. The defendant, therefore, contended that the plaintiff is not entitled to any relief and prayed for dismissing the application. 5. The learned trial Judge, after considering the submissions advanced by learned advocates for both the parties and after appreciating the documents produced before him and on the facts emerging from the record of the case so also considering the case law relied upon by the learned advocates for both the sides, has allowed the application No.6, notice of motion, by granting injunction as prayed for in favour of the plaintiff by holding that the plaintiff's trade mark is registered, the plaintiff has a prima facie case and balance of convenience also tilted in favour of the plaintiff and if the injunction as prayed for is not granted the plaintiff is likely to suffer irreparable loss and its reputation and resultantly the learned trial Judge has restrained the defendant by issuing temporary injunction from using the plaintiff's trade mark in relation to the chocolate, chocolate preparations, etc., so that there may not be any infringement to the plaintiff's trade mark "PIKNIK" and also restrained the defendant from passing off the defendant's goods as and for that of the plaintiff. It is this finding and resultant order which is now impugned before this Court at the instance of the defendant. 6. Learned Senior Counsel Mr.Thakore on behalf of the appellant strenuously assailed the order mainly on the following premise: (i) The word 'PIKNIK' is an exact phonetic equivalent of a common dictionary word 'PICNIC' and therefore it cannot be considered as an invented work. Alternatively, if it is considered as an invented word, the plaintiff on the basis of such invented word, cannot stop the defendant from using a common dictionary word like 'PICNIC' which is otherwise unregisterable and can be used by any person. (ii) The registration which is granted to the plaintiff is a label containing the word 'PIKNIK' written in a particular manner with a caricature of a little boy above it. Such registration does not prevent any one from using a common dictionary word 'PICNIC' with respect to its goods. Therefore, no infringement would take place since the defendant used the word 'PICNIC' only and not the label registered by the plaintiff and therefore the plaintiff has no prima facie case since there was no infringement of its trade mark. (iii) The defendant has trans-border reputation in not only the mark per se 'Cadbury' but also in the mark 'Cadbury Picnic'. In view of the trans-border reputation, there is no scope of passing off since the defendant's sales figures are far excess of the plaintiff's sales figure which clearly establishes that the defendant is not passing of their goods as made by the plaintiff but are effecting sales in view of their reputation as chocolate manufacturers and their goodwill in the mark 'Cadbury'. (iv) Balance of convenience is tilted in favour of the defendant since the defendant is capable of compensating the plaintiff if the plaintiff succeeds at the trial, whereas the plaintiff is not capable of compensating the defendant for the loss incurred by the defendant on account of continuation of the injunction during pendency of the suit in case the defendant succeeds. (v) The defendant has already applied for rectification of the plaintiff's trade mark label containing the word 'PIKNIK'. There are all good reasons to succeed since the plaintiff has never used label containing 'PIKNIK' for the manufacture of chocolate since registration. On this score also plaintiff is not entitled to ad-interim injunction against defendant for action of infringement. (vi) The plaintiff is not entitled to any ad-interim or interim injunction on the principle of delay, laches or acquiescence as well. 7. On the aforesaid premise, learned Senior Counsel Mr.Thakore contended that the learned Chamber Judge has overlooked all the above aspects and committed serious error both of law and facts and misdirected himself about the crucial question on the basis of phonetic similarity between the two words which, according to the learned trial Judge, is likely to create confusion in the mind of buyers but in reality it is not so and on the basis of the aforesaid finding, the learned Chamber Judge has recorded erroneous finding with respect to prima facie case, balance of convenience and irreparable injury in favour of the plaintiff contrary to the settled canons of law and, therefore, the order recorded by the learned Chamber Judge is bad in law and, therefore, it is liable to be quashed and set aside by allowing this appeal and thereby vacating the injunction granted by the learned Chamber Judge by dismissing the application notice of motion. 8. In counter submissions, learned Senior Advocate Mr.S.B. Vakil for the respondent while supporting the impugned order throughout has repelled all the aforesaid contentions raised by the learned Senior Counsel Mr.Thakore for the appellant and submitted as under: (i) The word 'PIKNIK' is an invented word. The word 'PICNIC' may be a common word but not the word 'PIKNIK'. Since the word 'PIKNIK' is registered, the plaintiff has a proprietary right over the same, therefore, infringement action will lie. (ii) Registration of plaintiff's trade mark has become conclusive in view of expiry of statutory period of seven years from the date of registration and therefore it should be considered as a valid one. (iii) Goods and labels of the defendant are different is no ground to escape action of infringement since action of infringement is a statutory remedy available in favour of proprietor of registered trade mark. (iv) Trans-border reputation of the defendant's product cannot give way to Indian law of trade mark. (v) Since in an action of infringement there is a recurring cause of action, the principle of delay cannot be invoked as it is not fatal in an action of infringement. Same is the position with laches and acquiescence. The suit is filed by the plaintiff in a period of ten months after serving the seizure and desist notice to the defendant and the said period cannot be construed as delay, laches or acquiescence. (vi) Pendency of rectification petition is no ground to refuse injunction and on the basis thereof, defendant cannot claim equity in an action of infringement of registered trade mark. (vii) The submission about the registered trade mark 'PIKNIK' is invalid since it is contrary to Section 9 of the Trade Mark Act is not correct as it is not open to challenge for any party once trade mark is registered. The work 'PIKNIK' is the essential feature of the plaintiff's trade mark, therefore, anyone who uses the said trade mark is liable for action of infringement under the law. 9. On the aforesaid premise, learned Senior Advocate Mr.Vakil has contended that the impugned order is just and proper and in accordance with law which does not require any interference at the hands of this Court. Since the finding and the resultant order recorded by the learned Chamber Judge is not perverse, arbitrary, unjust or unreasonable, this Appeal from Order is liable to be dismissed having no merits in it by affirming the impugned order. 10. Before examining the rival contentions of both the parties, let us highlight the undisputed aspects of the case which are incapable of being disputed. (i) Plaintiff company is dealing in the business of processing food products and in January 1989, they got registered their trade mark in the name and style of label mark having a caricature of a little boy above it with word 'PIKNIK' in Class 29, 30 & 32 respectively. They are, therefore, the registered proprietor of the said trade mark of label mark having a caricature of a boy with word 'PIKNIK'. (ii) Defendant marketed Cadbury Picnic chocolate in February 1998. (iii) Plaintiff served notice on the defendant on 16.3.1998 alleging action of infringement of their trade mark by the defendant. (iv) Defendant gives reply to the said notice refuting charge of infringement and passing off on 7.4.1998. (v) From 7.4.1998 to 10.2.1999, plaintiff takes no action and allow defendant to market their products. (vi) During the interregnum period, defendant incurred sales promotional expenditure i.e. selling cost of Rs.6.75 crores on the total sales of Rs.18 crores. (vii) Plaintiff issues fresh notice dated 10.2.1999. (viii) Plaintiff filed suit on 18.2.1999 i.e. almost after ten months after the defendant has started its business of manufacturing chocolate in the name of Cadbury Picnic. (ix) Defendant has not so far started manufacturing of chocolate though the trade mark is registered in Class 30. (x) Products of the plaintiff and the defendant are different. At present, plaintiff is marketing under trade mark of label mark with the word 'PIKNIK' potato chips, wafers etc. whereas defendant is manufacturing and marketing chocolate in the name of Cadbury Picnic. The said mark is unregistered. (xi) Plaintiff registered their trade mark Cadbury Picnic as back as in 1977 in the name and style of Cadbury Picnic which was lapsed in 1984. Thereafter, again they applied for registration of the said trade mark Cadbury Picnic in the year August 1996. The said application is still awaiting its final decision. (xii) Rectification application filed by the defendant against the plaintiff seeking rectification of their trade mark having label with a caricature of a boy and the word PIKNIK is still awaiting its final decision before the Hon'ble High Court of Bombay. 11. First contention of learned Senior Advocate Mr. Thakore is that the word PIKNIK which is an exact phonetic equivalent of a common dictionary word like picnic is unregisterable. The word PIKNIK is an exact phonetic equivalent of a common dictionary word and, therefore, cannot be considered as an invented word. Alternatively he has submitted that if the word PIKNIK is considered as an invented word, the plaintiff, on the basis of such invented word, cannot stop the defendant from using a common dictionary word like PICNIC, which is otherwise unregisterable and can be used by any person. 11.1. To bring home the aforesaid submissions, Mr. Thakore has placed reliance on the decision in the case of Electrix & Electrics, reported in 1959 RPC 283, wherein the House of Lords has held that a word not being an invented word, ought not to be put on the Register if the spelling is phonetic and resembles in sound a word which in its proper spelling could not be put on the Register. The question before the House of Lords was with respect to the similarity of words Electrix and Electrics. 11.2. Mr. Thakore has also placed reliance on the judgment of the Bombay High Court in the case of Mrs.Anneliese Huckmann v. Registrar of Trade Marks, AIR 1962 Bombay 88. In that case the Bombay High Court has held that the word 'Patentex" is neither an invented word nor a coined word and as such it is not registerable. A word would not be invented which with some trifling addition or very trifling variation, still leaves the word one which is well known or in ordinary use. In that judgment, the Bombay High Court has held that there is so much resemblance between the word 'patentex' and the word "patended". 11.3. Relying upon the aforesaid two decisions, it was contended by Mr. Thakore that the word which is unregisterable is registered by the Registrar of Trade Marks which is a common dictionary word and hence cannot claim to be an invented word and on the basis of that word, action of infringement cannot lie against the use of the similar word either by