CS (OS) No. 1143 of 2004 Page 1 of 45 IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on : August 27, 2009 Date of Judgement: November 30, 2009 CS(OS) No. 1143 of 2004 FOODWORLD ..... Plaintiff Through: Mr. Hemant Singh with Mr. Sachin Gupta, Advocates. versus FOODWORLD HOSPITALITY PVT. LTD. ..... Defendant Through: Mr. S.K. Bansal, Advocate. CORAM: HON'BLE DR. JUSTICE S.MURALIDHAR 1.Whether reporters of the local news papers be allowed to see the order? Yes 2.To be referred to the Reporter or not? Yes 3. Whether the order should be reported in the Yes Digest ? J U D G M E N T S. Muralidhar, J. 1. This suit, filed on 12th October 2004, prays for a decree of permanent injunction to restrain the Defendant from marketing, selling, offering for sale, advertising, directly or indirectly dealing in food products and food business under the trademark and trade name FOODWORLD or any other mark or name deceptively similar thereto as may likely to cause confusion or deception amounting to passing off of Defendant‟s goods and business as those of the Plaintiff. The other prayers in the suit are for delivery up of the infringing packaging, labels and rendition of accounts and for a decree for the amount due or in the alternative for Rs.20 lakhs as token damages. CS (OS) No. 1143 of 2004 Page 2 of 45 Case of the Plaintiff 2. The Plaintiff M/s Foodworld is a registered partnership firm having its registered office at Greater Kailash Part-II, New Delhi. It is stated that earlier the Plaintiff was a proprietorship concern of which Mr. Iqbal Krishan Dogra was the sole proprietor. Since 1987, the said concern was in the food business which included institutional and outdoor catering under the trademark/trade name FOODWORLD. On 15th March 2001, Mr. Dogra inducted his wife Mrs. Meenakshi Dogra as a partner and by a partnership deed dated 15th March 2001 converted the proprietorship concern into a partnership firm. 3. An application was made on 4th August 1994 by Mr. Dogra and Mrs. Meenakshi Dogra for registration of the trademark FOODWORLD (label) in Class 30 of the Schedule to the Trade and Merchandise Marks Act 1958 („TM Act 1958‟) i.e. coffee, tea, cocoa, sugar, flour preparation made from cereals, bread, biscuits, cakes, pastry and confectionary etc. The said registration was opposed by the Defendant and was pending at the time of the filing of the suit. 4. The Plaintiff is also stated to have made application on 29th July 2004 under the Trade Marks Act 1999 („TM Act 1999‟) for grant of registration for the trademark FOODWORLD in Class 29 [i.e meat, fish, poultry and game, meat extracts, preserved, dried and cooked fruits and vegetables, jellies, jams, fruit sauces, eggs, milk and milk products, edible oils and fats] and in Class 42 [i.e service of providing food and drinks, temporary accommodation, medical hygienic and beauty care, veterinary and CS (OS) No. 1143 of 2004 Page 3 of 45 agricultural services, legal services, scientific and industrial research, computer programming, services that cannot be classified in other classes]. 5. The Plaintiff claims that the trademark/trade name FOODWORLD has been coined and adopted by the Plaintiff and used exclusively, continuously and extensively in relation to the food business since 1987. It is stated that the firm began with supplying packed executive lunches to various reputed organisations like Eicher Goodearth Limited, Ranbaxy Lab. Ltd., Modi Xerox, BHEL, Coal India, FICCI etc. It claims to have been running a restaurant under the trademark/trade name FOODWORLD at the Inland Container Depot (Dry Port), Tughlakabad, New Delhi since September 1993. Apart from institutional and outdoor catering, the Plaintiff was allotted a contract for rendering mobile catering services on various trains including the New Delhi-Jaipur-Ajmer Shatabadi Express. The Plaintiff claims to have restaurant outlets apart from Tughlakabad also at Dadri in UP. It is claimed that the Plaintiff caters to more than 6000 passengers on various trains or through various outlets every day. The trademark/trade name FOODWORLD appears on all the invoices and the food packaging. It is also prominently displayed on various commodities like sugar, salt and pepper sachets, toothpick packaging, on the cutlery supplied, on paper cups, snacks etc. supplied to the passengers on the train. It is stated that the Indian Railways has a maximum reach of people and connects even the remotest corners of the country. It is accordingly claimed that the Plaintiff has thus acquired “enviable goodwill and reputation in the trademark/trade name FOODWORLD.” CS (OS) No. 1143 of 2004 Page 4 of 45 6. In para 7 of the plaint, the turnover figures of the Plaintiff for the years ending on 31st March 1988 to 31st March 2004 have been indicated. As on 31st March 2004 the annual turnover was 9.56 crores. It is claimed that the trademark/trade name FOODWORLD is distinctive of the goods and business of the Plaintiff and has acquired secondary significance to connote and denote the trade source and origin of the goods. It is stated that the trademark/trade name FOODWORLD along with the goodwill of the business thereunder was assigned in favour of the Plaintiff firm which accordingly became the proprietor of the said trade mark FOODWORLD. 7. The Defendant M/s Foodworld Hospitality Pvt. Ltd., a company incorporated under the Companies Act, 1956 having its office at Vasant Kunj, New Delhi is also engaged in food business. The Plaintiff claims that it became aware of the adoption of the trademark FOODWORLD by the Defendant in July 2004 after receiving a copy of notice of opposition filed by the Defendant against the Plaintiff‟s trademark Application No. 635965 in Class 30 for the mark FOODWORLD. Although notice of opposition was received in May itself, it was brought to the attention of the partners of the Plaintiff firm only in July. The Plaintiff then filed a counter statement to the opposition. These proceedings were stated to be pending. 8. The Plaintiff claims to have sent a legal notice dated 12th August 2004 asking the Defendant to discontinue the use/adoption of the trademark FOODWORLD. By its reply dated 25th August 2004, the Defendant declined to do so and thereafter the present suit was filed. CS (OS) No. 1143 of 2004 Page 5 of 45 9. The case of the Plaintiff is that the adoption of the mark FOODWORLD by the Defendant in relation to food preparations or products is dishonest and is bound to cause confusion or deception among the members of the public and the trade on account of its identity with the Plaintiff‟s trademark FOODWORLD. The use by the Defendant of the trademark FOODWORLD in relation to food preparations, products and services is bound to lead the members of the public to believe that the Defendant‟s goods or business originate from the Plaintiff or that the Defendant has a trade connection or association with or the approval of the Plaintiff. This, according to the Plaintiff, amounts to passing off of the Defendant‟s goods as those of the Plaintiff. It is alleged that the Defendant‟s conduct is dishonest and malafide and motivated to misappropriate the Plaintiff‟s goodwill and reputation attached to the trademark FOODWORLD. It is claimed that the illegal action of the Defendant is causing irreparable loss and injury to the Plaintiff in its business, goodwill and reputation and that the said injury cannot be compensated in monetary terms. Case of the Defendant 10. A written statement was filed by the Defendant on 8th November 2004. It is claimed in the written statement that the Plaintiff is neither the proprietor nor the owner of the trademark or trade name FOODWORLD. It is stated that the Plaintiff has admitted to have accepted the disclaimer condition imposed by the Registrar in the Plaintiff‟s Trade Mark Application under registration No.635965 in Class 30. The Plaintiff‟s application was for the artistic logo with the word/mark FOODWORLD which contains a device of a globe in the letter „O‟. This application was advertised in the Trade Marks CS (OS) No. 1143 of 2004 Page 6 of 45 Journal No. MEGA 3 dated 14th October 2003 with a disclaimer condition that the registration of this trade mark would give no right to the exclusive use of “GLOBE ALONG WITH FOOD & WORLD.” It is submitted that inasmuch as the Plaintiff has accepted this disclaimer the only right, if any, that the Plaintiff has is to the artistic logo on the left side of the word/mark FOODWORLD. It is further stated that in view of the disclaimer the Plaintiff is estopped from claiming any exclusive right in the said trade name/ trademark FOODWORLD. 11. It is submitted that the non-disclosure of the above disclaimer in the plaint amounted to suppression of a material fact and entailed outright dismissal of the suit. It is stated that in the application made for the registration of the trademark, the Plaintiff claimed user only since 1st August 1994 and therefore the claim of being a user since 1987 was false to the knowledge of the Plaintiff. It is further pointed out that the application was filed in the name of Mr. Iqbal Krishan Dogra and Mrs. Meenakshi Dogra and not in the name of the Plaintiff firm which was admittedly formed only in March 2001. It is therefore alleged that the Plaintiff is not a legal entity and has made wrong submissions as to its business and logo. 12. The Defendant claims to be engaged in the hospitality business and manufacturing, running and operating restaurants under the service mark FOODWORLD as well as the corporate name FOODWORLD. It has claimed to have adopted the said service mark/trade name in 1998 and it has been using it continuously, commercially and exclusively in the course of trade. The Defendant also claims that the said service mark/trade name is CS (OS) No. 1143 of 2004 Page 7 of 45 identified with the Defendant and indicates the business and service as originated from the Defendant. It is further claimed that the consuming public and the trade associates would identify the said service mark and trade name with the Defendant alone. The Defendant also claimed that the said service mark and the trade name has acquired secondary significance and have become synonymous with the goods and business of the Defendant. The Defendant claimed to have acquired considerable reputation and goodwill to have conducted business running into lakhs of rupees. 13. The Defendant, in the year 2001, applied for registration of the said service mark/trade name FOODWORLD in Class 29 and Class 30 since the applications were under the Trade & Merchandise Marks Act, 1958 („1958 Act‟) which contained no provision for the registration of service marks. Both the applications were advertised in the Trade Mark Journal on 25th October 2003. No objection was filed by the Plaintiff to the said applications. After the coming into force of the TM Act 1999 which permitted registration of marks to be used in services, the Defendant filed an application for registration of the service mark FOODWORLD in Class 42. This application was also directed to be advertised by the Registrar of Trade Marks. The Defendant also claimed to have applied and obtained a copyright registration A-64449 of 2003. The copy of the certificate has been placed on record. It is submitted that the subject matter of the copyright registration is an original artistic work within the meaning of the Copyright Act, 1959 and that the Defendant is the owner of the copyright therein. It is accordingly submitted that the Defendant has its own and independent right in the service mark and trade name FOODWORLD on the ground of honest and CS (OS) No. 1143 of 2004 Page 8 of 45 concurrent user as well. 14. On 14th September 2005 the Defendant filed an amended written statement to bring on record the fact that it had been granted registration for the mark FOODWORLD in Class 30 on 1st June 2005 effective from 19th December 2001. It was also granted registration in Class 29. The Defendant also was granted copyright registration No. A-64449 of 2003 for the artistic work. 15. In its replication, the Plaintiff claims that it had adopted and is the prior user of the trademark/trade name FOODWORLD and has acquired enviable goodwill and reputation. The contention is that on the principles of prior adoption, continuous use and excellent quality control, the Plaintiff is the legitimate proprietor of the trademark/trade name FOODWORLD. It is asserted that notwithstanding the disclaimer for the device of the globe with „Food‟ or the device of the globe in conjunction with the word `World‟ there was no disclaimer with regard to the trademark FOODWORLD as a whole. 16. This Court did not grant any interim relief. On behalf of the Plaintiff, Shri I. K. Dogra filed an affidavit dated 30th May 2006 by way of examination-in-chief. Inter alia along with the affidavit, Shri Dogra exhibited copies of the trademark applications made, the legal notice issued and the copy of the opposition filed by the Plaintiff to the Defendant‟s trademark application. The Plaintiff has also placed on record copies of the visitor‟s book kept in the trains which contained the comments made by the customers about the quality of the food supplied by the Plaintiff. The CS (OS) No. 1143 of 2004 Page 9 of 45 figures of sales turnover as well as the copies of the balance sheet and profit and loss account of the Plaintiff from March 2001 to March 2004 have been placed on record. 17. The other witness of the Plaintiff, Shri Pradeep Kumar Nagpal (PW-2) filed an affidavit dated 30th May 2006 by way of examination in chief. A further affidavit dated 28th November 2006 by way of evidence of PW 1 has been filed on behalf of the Plaintiff. PWs-1 and 2 were cross examined on various dates. On behalf of the Defendant the affidavit dated 1st July 2006 of Shri Sameer Puri DW-1 by way of evidence was filed. Shri Puri was cross- examined on 5th July 2007. Issues 18. By an order dated 5th April 2006 the following issues were framed: “1. Whether the suit has been instituted by a competent and authorised person? OPP 2. Whether the Plaintiff is proprietor of the trademark/trade name FOODWORLD? OPP 3. Whether by the use of the word FOODWORLD the Defendant is passing off its goods and services as those of the Plaintiff? OPP 4. Whether the Defendant is prior user of the trademark/trade name FOODWORLD? OPD 5. Whether the Defendant is entitled to use the trademark/trade name FOODWORLD on account of honest and concurrent use? OPD CS (OS) No. 1143 of 2004 Page 10 of 45 6. Whether the suit is barred by delay, acquiescence and laches? OPD 7. Whether the Plaintiff is guilty of suppressing material facts and has not come to the Court with clean hands? OPD 8. Whether the Plaintiff is entitled to any relief as prayed for?” The submissions of Mr. Hemant Singh, learned counsel for the Plaintiff and Mr. S.K. Bansal, learned counsel for the Defendant have been considered. Issue No.1: Whether the suit has been instituted by a competent and authorised person? 19. The plaint has been signed by Shri IK Dogra describing himself to be the partner of the plaintiff firm. It is supported by the affidavit dated 12th October 2004 of Shri Dogra. The letter of authorisation dated 7th January 2004 given by Ms. Meenakshi Dogra, one of the partners of the Plaintiff firm, to file the suit is marked as Ex. PW 1/1. This Court is satisfied that the suit has been instituted by a competent and authorised person. Accordingly this issue is decided in favour of the Plaintiff and against the Defendant. Issue No.6: Whether the suit is barred by delay, acquiescence and laches? 20. The case of the Plaintiff is that it came to know about the adoption and use of the trademark FOODWORLD by the Defendant in July 2004 when it received the Defendant‟s notice of opposition to its application. CS (OS) No. 1143 of 2004 Page 11 of 45 21. It is seen that the Plaintiff‟s application was advertised in the Trade Marks Journal Mega No.3 dated 14th October 2003. The opposition filed by the Defendant was dated 24th February 2004. The Plaintiff filed its counter statement on 27th July 2004. The present suit has been filed on 12th October 2004. In the circumstances it is held that the suit is not barred by laches or delay. Issue No.2: Whether the Plaintiff is proprietor of the trademark/trade name FOODWORLD? 22. The case of the Plaintiff is that it has been using the mark FOODWORLD continuously since 1987 in relation to the food catering business. There are invoices of FOODWORLD, having its office at Greater Kailash in New Delhi, of the years 1990, 1991, 1992, 1993, and 1995 onwards. Letters addressed to the Senior Commercial Manager (Catering), Northern Railways of 1st January 1997 including the bills for the period 16th December 1996 to 31st December 1996 of the New Delhi-Jaipur-Ajmer-New Delhi Shatabdi Express are on record. There are exhaustive invoices of 1997, 1998, 1999. The agreement for running mobile catering services with the Northern Railways dated 13th March 1995 (Ex.PW 1/3.1) has been duly proved. Of course, this agreement is with FOODWORLD which is the proprietary concern, of which Shri Dogra was the sole proprietor. 23. Then we have sales tax registration in respect of M/s. FOODWORLD with its registration valid from 17th March 1989. We have assessment orders for the period 31st October 1987 to 31st March 1988; 1st April 1988 to 16th March 1989 and 17th March 1989 to 31st March 1989. There are assessment CS (OS) No. 1143 of 2004 Page 12 of 45 orders for the years 1989-90, 1990-91, 1991-92, 1992-93 onwards all in the name of M/s. FOODWORLD. The assessment order dated 29th March 2004 for the year 2002-03 notes that the Plaintiff is providing food services. The turnover figures are also given in these assessment orders. 24. We have the partnership deed dated 15th March 2001 between Shri IK Dogra and Mrs. Meenakshi Dogra (Ex.PW 1/2) and the registration of the firm (Ex.PW 1/1) issued on 15th March 2001. In its counter statement to the notice of opposition, the partnership firm adverts to the fact that it has been assigned the mark FOODWORLD by the proprietary concern after the consideration of the forming. The cross-examination of the witnesses for the Plaintiff on this aspect has not yielded much to describe the exhaustive evidence placed by the Plaintiff to show that it is not the proprietor of the mark FOODWORLD. 25. In the considered view of this Court, there is overwhelming evidence adduced by the Plaintiff to prove that the Plaintiff is the proprietor of the mark. The Plaintiff has also placed on record a copy of the form TM-16 whereby the Trademarks Registry was informed that the status of the applicant had changed from a proprietary concern to a partnership firm with effect from 15th March 2001 and accordingly requested the name of the applicant in the applications may be amended to Mr. IK Dogra and Ms. Meenakshi Dogra, Indian nationals trading as FOODWORLD. Accordingly this issue is decided in favour of the Plaintiff and against the Defendant. Issue No. 3:Whether by the use of the word FOODWORLD the Defendant is CS (OS) No. 1143 of 2004 Page 13 of 45 passing off its goods and services as those of the Plaintiff? The elements of passing off 26. The present case is one of passing off. The Plaintiff has applied for registration for the mark FOODWORLD whereas the Defendant holds a registration both in respect of the trademark as well as copyright in FOODWORLD. In order to succeed on the issues framed the Plaintiff has to prove that the elements of passing off exist in the present case. 27. The leading modern authority on passing-off is the decision of the House of Lords is Reckitt and Colman Products Ltd v. Borden Inc and others [1990] 1 All ER 873, where the House of Lords explained the “classical trinity” of passing off. Lord Oliver said: “The law of passing off can be summarised in one short general proposition, no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get- up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff 's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely on a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Third, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.” CS (OS) No. 1143 of 2004 Page 14 of 45 28. Earlier, in the Advocaat case, Erven Warnink v. Townend [1979] 2 All E.R. 927, in the leading speech of Lord Diplock it was observed: “Spalding v. Gamage (1915) 32 RPC 273 (H.L.) and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing-off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequences) 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.” 29. Courts in our country have been adhering to the above principles which are recognised as part of the common law in the area of passing off. This Court in M/s Smithkline Beecham and Ors v. M/s. Hindustan Lever Ltd. and Ors 1999 PTC 775 (Del) held that “in order to prima facie prove a cause of action for passing off certain pre-conditions are to be fulfilled. The first ingredient to be prima facie pleaded and proved is goodwill, whereas the second aspect to be proved is misrepresentation and the third such aspect that is to be proved is the fact that such misrepresentation has led to sufferance of damages. The plaintiffs have to prove that the defendant has been using or is using in connection with his own goods a name, mark, sign, or get up which has become distinctive with the plaintiffs. He also has to prove in addition that the defendants' use of the said feature was calculated or likely to deceive, which has resulted into injury actually to the goodwill of the