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2015 (3) TMI 1197 - SUPREME COURT

2015 (3) TMI 1197 - SUPREME COURT - 2016 (2) SCC 683, 2015 (7) SCALE 136 - Infringement of trade mark - permanent injunction seeked - Held that:- The rights in common law can be acquired by way of use and the registration rights were introduced later which made the rights granted under the law equivalent to the public user of such mark. Thus. we hold that registration is merely a recognition of the rights pre -existing in common law and in case of conflict between the two registered proprietors, .....

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ce. From the plethora of evidences produced by the Respondent she has been able to establish that the trade mark Truttukadai Halwa' has been used of by her/her predecessors since the year 1900. - The business in that name is carried on by her family. It has become a household name which is associated with the Respondent/her family. The Court has also noted that the Halwa sold by the Respondent's shop as Truttukadai Halwa' is not only famous with the consumers living in Tirunelveli, but is al .....

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e above Tamil cinema song being repeatedly played in the State of Tamil Nadu has also spoken more about the trade mark Truttukadai halwa', it goes without saying that the Plaintiffs trade mark name Truttukadai halwa' has become a household name in the nook and corner of this State, therefore, no one can claim as his own the name Truttukadai halwa' except the Respondent. - The Court is of the considered opinion that allowing the Defendant to use the trade mark ' Tirunelveli Iruttukadai Halwa' .....

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ger. In a situation like this, it is the bounden duty and obligation of the Court not only to protect the goodwill and reputation of the prior user, but also to protect the interest of the consumers. - Civil Appeal No. 2758 of 2015 (Arising Out of SLP (C) No. 12671 of 2014) - Dated:- 17-3-2015 - H.L.DATTU & A.K.SIKRI JJ. For the Appellant: K.K.MANI, T. Archana, For the Respondent: ROHINI, MUSA JUDGEMENT Arjan Kumar Sikri, J. - 1. THE Res .....

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ent injunction and other reliefs on the ground that the Appellant had adopted deceptive similar trade mark to confuse the consumers. This suit was decreed by the trial court on 20.04.2011. Insofar as the relief of rendition of accounts is concerned it was denied by the trial court. The Appellant herein filed an appeal against the said decree before the High Court of Madras. The High Court has dismissed the appeal, thereby affirming the decree of the trial court, vide judgment dated 07 .....

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his death, the Respondent, who is the daughter -in -law of late Mr. R. Krishna Singh, continued to carry on the business of selling halwa. It was also claimed that the product of halwa assumed an unique name of 'Iruttukadai Halwa' not only at Tirunelveli in Tamil Nadu region, but also in other parts of India as well as in foreign countries. It was further claimed that from the year 1900 till now, 'Irruttukadai Halwa Shop' would open only at 5.00 p.m. or 5.30 p.m., and would remai .....

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the halwa sold by Irruttukadai is considered as high quality and its taste lasts longer, in the beginning of 1900, when the shop was opened, only one oil lamp used to be lit in the centre of the shop. Due to passage of time, today in the place of oil lamp, the shop is illuminated with a 40W bulb. Unlike other shops, no other illumination is made in the shop in question as decoration. While so, the Appellant/defendant's father, zealous for the goodwill enjoyed by the Respondent from the publi .....

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ant again opened yet another shop at No. 1/1 A, Therkku -vasal opposite to Tirunelveli Railway Station in Madurai road in the name of 'Tirunelveli Iruttukadai Halwa' to deceive the public that the Respondent has opened another shop in the above said address by giving advertisement in Tamil Muyrasu newspaper daily on 26.06.2007. Some of the public, after seeing the advertisement made in the above said newspaper daily, started enquiring the Plaintiff/respondent as to whether any .....

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.07.2007 refusing to accede to the demand of the Respondent, the Respondent filed the suit for declaration, permanent injunction and rendition of accounts. 2. The Appellant defended and contested the said suit by filing the written statement. It was pleaded that it was not open to the Respondent to claim that the halwa manufactured in their shop alone has got the sweet taste, forgetting for a minute that every halwa manufactured in Tirunelveli by using Tamirabarani river. F .....

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Tirunelveli city, there is no question of making allegation that the Appellant is attempting to deceive the public by using the name of the Respondent's shop. Also the carry bag used by the Appellant with the name 'Raja Sweets' has got a different colour with different picture showing the telephone number. Further, it was pleaded that the Appellant also got registered Under Section 25(2) of the Trade Marks Act, 1999 (hereinafter referred to as the 'Act') with the specific nam .....

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When the Defendant has been using the Plaintiffs place of address with mala fide intention? (iii) Whether it is proper for the Defendant to say that the Plaintiff has no logo? (iv) Whether there has been any loss of profit, loss of reputation and goodwill to the Plaintiff by allowing the Defendant to carry on the business in the name of Iruttukadai halwa? (v) Whether the Plaintiff has got the right of proprietorship to carry on the business in her address?< .....

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ame and logo identical to the Plaintiffs trade mark? (x) Whether the Defendant has got any right to sell the halwa in question in the same name of the Plaintiffs trade mark? (xi) To what reliefs the Plaintiff is entitled to - 3. In support of her case, the Respondent examined two witnesses and produced twenty -seven documents. On the other hand, the Appellant examined three witnesses and marked seven documents in support of his case. Arguments were heard thereaft .....

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ark name 'Iruttukadai Halwa' had become a household name in the nook and corner of the State of Tamil Nadu. There was even a famous Tamil song from the movie "Samy" wherein name of this halwa was mentioned time and again. Therefore, opined the High Court, no one can claim as his own name 'Iruttukadai Halwa' except the Respondent. The High Court recognised the fact that the Appellant had also got the trade mark 'Iruttukadai Halwa' registered. However, no credence .....

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user of the trade mark has been well recognised. Even a registered trade mark holder like the Defendant cannot lawfully interfere with or restrain the use of the trade mark by the prior user, for, the law is well settled that even a registration by the recent user cannot be a ground to reject the plea of the prior user that he/she is the prior user of the trade mark." According to the High Court, the Respondent is not only a prior user of the trade mark, she has even prior regist .....

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style of 'Iruttukadai Halwa', the Defendant cannot simply add the word 'Tirunelveli Iruttukadai Halwa', as the same has been used prior in point of time by the Plaintiff. Therefore, the Court is of the considered opinion that allowing the Defendant to use the trade mark ' Tirunelveli Iruttukadai Halwa' will amount to deceiving the public, hence, no one can be permitted to encroach upon the goodwill and reputation of other party, particularly when a specific mark, though m .....

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interest of the consumers." 5. IT is clear from the above that two reasons which have primarily influenced the trial court as well as High Court to decree the suit of the Respondent are: (i) The Respondent is the prior user of the trade mark 'Iruttukadai Halwa', and because of its long user the Respondent's trade mark has acquired a distinct reputation and goodwill in the business under the name and style 'Iruttukadai Halwa'. Therefore, as a prior u .....

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effect, rule against 'passing off is applied to give the relief." 6. The submission of Mr. Mani, learned Advocate appearing for the Appellant, while questioning the validity of the aforesaid judgment was that even the Appellant had been selling the halwa and sweets in Tirunelveli for last 40 years in the same place in the name of 'Raja Sweets'. It was further submitted that shop of the Appellant is situated 5 kilometers away from the Respondent's shop and, therefo .....

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s basis, it was argued that the question of deception does not arise and it cannot be said that the public would be cheated thereby. Mr. Mani submitted that the aforesaid important distinguishing features have been totally ignored by the courts below. In addition to this submission, his other argument on which great reliance was placed, is that the trade mark of the Appellant with the specific name 'Tirunelveli Iruttukadai Halwa' was duly registered Under Section 25(2) of the .....

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corded to the effect that not only Respondent was prior user of the aforesaid trade name but a user was for a period of more than 100 years as the family of the Respondent started using this trade mark way back in the year 1900. She also relied upon the judgments which are referred to by the High Court in the impugned judgment on the proposition that a prior user has exclusive right to use the trade mark. 8. After considering the aforesaid submissions of the counsel for the parties, w .....

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spondent claims prior user of the trade mark 'Iruttukadai Halwa'. Moreover, she is also registered owner of this trade mark which she got registered in the year 2007. This registration is even prior to the registration of trade mark in favour of the Appellant. But at the same time, we have the Appellant who is also a registered owner of the trade mark 'Tirunelveli Iruttukadai Halwa' which was registered by the Registrar in the year 2008. In the fact situation, when the Appellant .....

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o:p> 9. Chapter III of the Act pertains to the 'Procedure For And Duration of Registration'. For getting a trade mark registered, an application can be preferred Under Section 18 of the Act. Such an application is to be made in the prescribed manner in the office of the trade mark registry within whose territorial limits the principal place of business in India of the applicant or in the case of joint applicants, the principal place of business in India of the applicant whose name is fir .....

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etion to the Registrar to revoke the acceptance even when such an application is accepted for registration of a trade mark. However, it is to be done after the acceptance but before its registration and that too on satisfaction of any of the two conditions stipulated in the said provision, which are: "(i) If the applications has been accepted in error; or (ii) If the Registrar finds that trade mark should not be registered or should be registered subject to conditions .....

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rtising is to afford the public at large an opportunity to oppose the registration of the mark. After the advertisement, such a right to oppose the registration conferred on every member of the public as 'any person' can file objections Under Section 21 of the Act. An opposition is to be made within four months from the date of advertisement/re -advertisement. Once opposition(s) is/are received, the Registrar is to serve a copy of the same to the applicant and within two months thereof t .....

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eceiving such evidence, the Registrar is duty bound to give an opportunity of hearing to both of them, if they so desire. After hearing the parties and considering the evidence, the Registrar is to take a decision as to whether he would be permitting the registration or rejecting the application. At this stage, if the Registrar feels that the mark considered as a whole is likely to create confusion, he is empowered to refuse the registration. Once the application is accepted and either there is .....

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and that date shall, subject to the provisions of Section 154, be deemed to be the date of registration. Section 24 deals with jointly owned trade marks with which are not concerned in the present case. Thereafter, Section 25 provides for duration, renewal, removal and restoration of registration. Duration of the trade mark, as per Section 25(1) of the Act, is 10 years which can be renewed for a period of 10 years from the date of expiration of the original registration. Sub -section (2) thereof .....

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> 11. From the aforesaid procedure contained in Chapter III pertaining to registration, two things become apparent which may be recapitulated as under: "(i) When the application for registration is received and accepted, a public notice thereof is given by publishing an advertisement thereby affording an opportunity to public at large to file any opposition to the said application. (ii) While considering such application for registration of a trade mark, the Registry w .....

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egistration is stated to be Under Section 25(2) of the Act, which would imply that it was a case of renewal of registration in the year 2008 and the original registration was much earlier. However, those facts do not emerge from the record and the Appellant also did not press this fact. Therefore, we shall proceed on the basis that the Appellant's trade mark was registered in the year 2008, more so when we find that actual date has no bearing to the outcome. Effect of .....

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/o:p> (1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark. (2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof." 13. Section 28 which is very material for our purpose, as that provision confers certain .....

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Act. (2) The exclusive right to the use of a trade mark given under Sub -section (1) shall be subject to any conditions and limitations to which the registration is subject. (3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the reg .....

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"(i) Exclusive right to use the trade mark in relation to the goods or services in respect of which the trade mark is registered. (ii) To obtain relief in respect of infringement of trade mark in the manner provided by this Act." Sub -section (3) of Section 28 with which we are directly concerned, contemplates a situation where two or more persons are registered proprietors of the trade marks which are identical with or nearly resemble each other. It, thus, postu .....

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s no exclusive right to use the said trade mark against each other, which means this provision gives concurrent right to both the persons to use the registered trade mark in their favour. Otherwise also, it is a matter of common -sense that the Plaintiff can not say that its registered trade mark is infringed when the Defendant is also enjoying registration in the trade mark and such registration gives the Defendant as well right to use the same, as provided in Section 28(1) of the Act.

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dent can bring an action against the Appellant for passing off invoking the provisions of Section 27(2) of the Act. In other words, what would be the interplay of Section 27(2) and Section 28(3) of the Act is the issue that arises for consideration in the instant case. As already noticed above, the trial court as well as High Court has granted the injunction in favour of the Respondent on the basis of prior user as well as on the ground that the trade mark of the Appellant, even if it is registe .....

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aforesaid question would be in the affirmative. Our reasons for arriving at this conclusion are the following: "(A) Firstly, the answer to this proposition can be seen by carefully looking at the provisions of Trade Marks Act, 1999 (The Act). Collective reading of the provisions especially Section 27, 28, 29 and 34 of the Trade Marks Act, 1999 would show that the rights conferred by registration are subject to the rights of the prior user of the trademark. We have already reprod .....

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27(2) which are "Nothing in this Act shall be deemed to affect rights...." Likewise, the registration of the mark shall give exclusive rights to the use of the trademark subject to the other provisions of this Act. Thus, the rights granted by the registration in the form of exclusivity are not absolute but are subject to the provisions of the Act. Section 28(3) of the Act provides that the rights of two registered proprietors of identical or nearly resembling tra .....

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nt of Section 28(3) which clearly states that the rights of one registered proprietor shall not be enforced against the another person. Section 34 of the Trade Marks Act, 1999 provides that nothing in this Act shall entitle the registered proprietor or registered user to interfere with the rights of prior user. Conjoint reading of Section 34, 27 and 28 would show that the rights of registration are subject to Section 34 which, can be seen from the opening words of Section 28 of the Ac .....

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annot disturb interfere with the rights of prior user. The overall effect of collective reading of the provisions of the Act is that the action for passing off which is premised on the rights of prior user generating a goodwill shall be unaffected by any registration provided under the Act. This proposition has been discussed in extenso in the case of N.R. Dongre and Ors. v. Whirlpool Corporation and Anr. : AIR (1995) Delhi 300 wherein Division Bench of Delhi High Court recognized that the regis .....

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re unaffected by the registration rights under the Act. Secondly, there are other additional reasonings as to why the passing off rights are considered to be superior than that of registration rights. Traditionally, passing off in common law is considered to be a right for protection of goodwill in the business against misrepresentation caused in the course of trade and for prevention of resultant damage on account of the said misrepresentation. The three ingredients of passing off are goodwill, .....

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e rights in favour of the person and generates goodwill in the market. Accordingly, the latter user of the mark/name or in the business cannot misrepresent his business as that of business of the prior right holder. That is the reason why essentially the prior user is considered to be superior than that of any other rights. Consequently, the examination of rights in common law which are based on goodwill, misrepresentation and damage are independent to that of registered rights. The mere fact th .....

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w jurisdiction that passing off right is broader remedy than that of infringement. This is due to the reason that the passing off doctrine operates on the general principle that no person is entitled to represent his or her business as business of other person. The said action in deceit is maintainable for diverse reasons other than that of registered rights which are allocated rights under Recent Civil Reports the Act. The authorities of other common law jurisdictions like England more specific .....

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or otherwise, the Defendant has done what is calculated to pass off his goods as those of the claimant. A claim in "passing off' has generally been added as a second string to actions for infringement, and has on occasion succeeded where the claim for infringement has failed" The same author also recognizes the principle that Trade Marks Act affords no bar to the passing off action. This has been explained by the learned Author as under: - 15 -034 "Subjec .....

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registration. Again, it is no defense to passing off that the Defendant's mark is registered. The Act offers advantages to those who register their trade marks, but imposes no penalty upon those who do not. It is equally no bar to an action for passing off that the false representation relied upon is an imitation of a trade mark that is incapable of registration. A passing off action can even lie against a registered proprietor of the mark sued upon. The fact that a claimant is using a mark .....

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jurisdictions also including England/UK (Provisions of UK Trade Marks Act, 1994 are analogous to Indian Trade Marks Act, 1999) that the registration is no defense to a passing off action and nor the Trade Marks Act, 1999 affords any bar to a passing off action. In such an event, the rights conferred by the Act under the provisions of Section 28 has to be subject to the provisions of Section 27(2) of the Act and thus the passing off action has to be considered independent Truttukadai Halwa' t .....

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n all important part. A trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. Registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed at common law and a .....

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mbay High Court in the case of Sunder Parmanand Lalwani and Ors. v. Caltex (India) Ltd. : AIR 7 969 Bombay 24 (D.B.) in which it has been held vide paras '32' and '38' as follows: "32. A proprietary right in a mark can be 'Iruttukadai Halwa" obtained in a number of ways. The mark can be originated by a person, or it can be subsequently acquired by him from somebody else. Our Trade Marks law is based on the English Trade Marks law and the English Acts. The .....

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later Acts. The English Acts enabled registration of a new mark not till then used with the like consequences which a distinctive mark had prior to the passing of the Acts. The effect of the relevant provision of the English Acts was that registration of a trade mark would be deemed to be equivalent to public user of such mark. Prior to the Acts, Prior to the Acts, one could become a proprietor of a trade mark only by user, but after the passing of the Act of 1875, one could become a .....

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The mark can be originated by a person or can be acquired, but in all cases it is necessary that the person putting forward the application should be in possession of some proprietary right which, if questioned, can be substantiated". Law in India under our present Act is similar." We uphold said view which has been followed and relied upon the courts in India over a long time. The said views emanating from the courts in India clearly speak in one voice which is that .....

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the two registered proprietors are better and superior in common law which have been recognized in the form of the registration by the Act. 16. When we apply the aforesaid principle to the facts of the present case, we find that the impugned judgment of the High Court, affirming that of the trial court is flawless and does not call for any interference. From the plethora of evidences produced by the Respondent she has been able to establish that the trade mark Truttukadai Halwa' h .....

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anda Viketan, a weekly Tamil magazine dated 14.9.2003, describing the high quality and the trade mark Iruttukadai halwa sold by the Plaintiff, the findings and conclusions reached by the Court below is perfectly in order, hence, the same does not call for interference, carries more merit, for, this name has been further acknowledged in a Tamil song from the movie "Samy" as follows: "Tirunelveli Halwada, Tiruchy Malai Kottaida (Rock Fort) Tirupathike Ladduthan .....

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l position is summed up by the High Court in the following manner: "From the year 1900 onwards till now, the Respondent's family has been running the shop only for limited hours without selling any other item except halwa and the public not only in Tirunelveli but also in other parts of India has accepted the name as Iruttukadai halwa. As highlighted above, this could be seen from the telephone directory, issued in the year 1999, wherein the Plaintiffs Iruttukadai halwa shop .....

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e. Moreover, the Plaintiff has also registered the trade mark 'Iruttukadai halwa' Under Section 25(2) of the Trade Marks Act, 1999 with the Registrar. Under Clause 16 even the paper and paper articles etc., and the trade mark's certificate issued and registered under Clause 30 also clearly proves the case of the Plaintiff that she is the prior user of the trade mark 'Iruttukadai halwa'. Therefore, the trial Court accepting the case of the Respondent that she has officially re .....

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