TMI Blog1998 (6) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... n the said suit, the plaintiff filed O. A. No. 163 of 1996 seeking for the grant of ad interim injunction restraining the defendant from passing-off its business by using the expression Westinn or any other expression aurally, phonetically, or otherwise deceptively similar to it in the course of its business. It also filed O.A. No. 164 of 1996 seeking for ad interim injunction restraining the defendant from proceeding further with respect to the proposed public issue of shares by making public announcements, or by receiving subscription from applicants pending disposal of the suit. 4. The learned single Judge after hearing both the parties, dismissed both the applications. The plaintiff, as stated above, has filed these appeals against the impugned order rejecting the interlocutory applications, before this Court. 5. Briefly stated, the facts which are considered relevant and necessary for the purpose of disposal of these appeals are the following :-- The plaintiff is one of the oldest international hotel management companies, rendering high class hospitality services under the mark/name Westin . The plaintiff and its predecessors have been in the hotel and hospitality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of 1996 and the defendant WHSL filed O.A. No. 28 of 1996 for interim injunction against CPHR in C.S. No. 5 of 1996. 10. The learned single Judge in the impugned common order dismissed the applications filed by both the parties. According to the learned single Judge, the application as well as the suit filed by the WHSL in O.A. No. 28 of 1996 and C.S. No. 5 of 1996 are misconceived as the statutory provisions under which the suit was filed is wholly inapplicable to the service marks and the service mark is not in any manner regulated by the Trade and Merchandise Marks Act, 1958 and as such, the application in the above suit was liable to be rejected. Against this part of the order there is no appeal filed by the plaintiff in C.S. No. 5 of 1996, the defendant in the present suit. 11. In these appeals, filed by the plaintiff, we are called upon to go into the legality or otherwise of the order passed by the learned single Judge in O.A. Nos. 163 and 164 of 1996 rejecting the interim reliefs sought for. 12. The plaintiffs case is briefly as follows :-- The plaintiff has been rendering high class hospitality services in the hotels and resorts sector all over the world unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was converted into a Public Limited Company. 15. In the year 1991 the defendant launched a division 'Hotlink', which provides instantaneous hotel marketing and reservation system. The defendant invented a Logo with the letter 'W' to connote and denote the consultancy services in the field of hotels and resorts. It has exclusive copyright in the artistic work 'W' Logo. The defendant has recently entered into a collaboration agreement with a popular US chain hotels M/s. Days Inn of America, by which the defendant would exclusively promote and market the said U.S. Company's services in India. 16. The defendant is only engaged in consultancy services for hotels and resorts and it has no intention to establish any hotel or resort anywhere in India under the name Westinn . The plaintiff docs not have consultancy services for hotels, resorts and hospitality business anywhere in the world. The fields of activity of the defendant and the plaintiff are completely different. The plaintiff does not have a single hotel under the name Westinn in India. The defendant has incurred several thousands of rupees in respect of sales promotion and advertisement expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no branch office or regional office of either the Westin Hotel company or of CPHR in India. The mark has also not been extensively advertised in India. It had not advertised its name or logo on the television. There are only two advertisements announcing the appointment of the General Sales Agent in 1989. (2) The number of Indians staying in Westin Hotels as shown in the computer print is not over 200 in number. There has been no advertisement at all of Westin in India, except two announcements in 1989. The expenditure on advertisement is wholly insignificant in India. The word 'Westin' though it may be well known in U.S.A. or at Singapore, cannot be said to be well-known and had acquired goodwill in India. (3) The defendant was incorporated in 1989. The word 'Westinn' has remained a part of the corporate name throughout. The promoters of the defendant company had received training in U.S.A. in the hotel industry. The use of the word 'West' in which part of the world they received training along with the word 'Inn' cannot be regarded as dishonest and defendant intended to deceive the public. (4) There is no scope for confusion, as ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... injunction. 26. Let us first refer to the decisions on this point, which are as follows :-- (1) Poiret v. Jules Poiret Ltd. and A. F. Nash, (1920) 37 RPC 177 Ch.D; (2) Sheraton Corporation of America v. Sheraton Motels Ltd., (1964) RPC 202 Ch D; (3) N. R. Dongre v. Whirlpool Corporation, (1996)5SCC714 ; (4) Haw Par Bros International Ltd. v. Tiger Balm Co. (P) Ltd., 1996 PTC 311; (5) Caterpillar Inc. v. Jorange, OSA No. 166 of 1997 D/- 1-10-1997; (6) Chelsea Man Menswear Ltd. v. Chelsea Girl Ltd., (1987) RPC 189 CA. 27. In Poiret v. Jules Poiret Ltd. and A. F. Nash, (1920) 37 RPC 177 Ch D, it has been held thus :-- Notwithstanding that the plaintiff Paul Poiret had no place of business in London, he was entitled to the protection of his goodwill and reputation acquired in this country; the continued use by the defendant of the name Poiret in the business would lead lo confusion in the trade and among private customers; the defendant had not acquired in the circumstances any concurrent right to the use of the name Poiret. 28. The next decision is Sheraton Corporation of America v. Sheraton Motels Ltd., (1964) RPC 202 Ch D. In this case, the plaintiffs owned a chain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecome associated in the minds of the public. Even advertisement of trade mark without existence of goods in the mark is also to be considered as use of the trade mark. The magazines which contain the advertisement do have a circulation in the higher and upper middle income strata of Indian society. Therefore, the plaintiff acquired transborder reputation in respect of the trade mark 'WHIRLPOOL' and has a right to protect the invasion thereof. 31. The next decision is Haw Par Bros. International Ltd. v. Tiger Balm Co. (P) Ltd., 1996 PTC 311. In this case, the learned single Judge of this Court while vacating interim injunction granted in the suit for passing off action observed that the plaintiff must establish goodwill and reputation in the geographical area where passing off is alleged and that the reputation of the plaintiff elsewhere is the irrelevant. The Division Bench of this Court headed by Hon'ble Justice Srinivasan (as he then was) while setting aside the order of the learned single Judge categorically held that the appellants/plaintiffs are entitled to get the relief of interim injunction even without actually doing any business in India. The said judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in my view, GLENFIDDICH whisky has a live reputation in India. After referring to judgments relating to persons selling their goods internationally all over the world, I have already held in the case of Apple Computer Inc. 1991 DL 319, that a person whose goods have an international reputation can maintain a passing off action in India. 35. In yet another case in WWF International v. Mahavir Spinning Mills Ltd., 1994 PTC 250, the Delhi High Court considered the question at length and made the following observation :-- Mere fact that the plaintiff has never manufactured any products in this country does not prevent it from acquiring the goodwill here in its trade mark. It is no doubt true that an action passing off relates to the business and it must be established that the plaintiff has a reputation or goodwill of his business in this country. The foundation for the action for passing off is the protection of goodwill and so, one must prove the existence of goodwill in this country before obtaining a relief of passing off. The principle of law of passing off has been also made applicable to non-trading business or non-profit making bodies as well. The trade mark law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comforting for the international community to know that reputation of trade marks of overseas companies is being recognised in India and there have been significant judicial precedents on the question of transborder or spill-over of international reputation. 38. Thus, it is manifestly clear that the plaintiff in order to get the relief of interim injunction restraining the defendant from using its service mark need not establish that they actually carry on business in this country. It is enough if they have got customers here. If they have got customers in India, it necessarily means that the plaintiff has got reputation in the general sense of the word in this country. The said reputation could be brought out by advertisement. Therefore, if the plaintiff had acquired ownership of the service mark in India, as a result of some business done in India and as a result of large scale advertisement made in foreign periodicals circulated in India and the periodicals issued in India, he would certainly be entitled to take passing off action in India. 39. In conformity with the principles enunciated in the decisions referred to earlier, we shall now look into the materials produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Volume II by the appellant which runs about 173 pages. 44. According to the plaintiff, it has been the proprietor of all intellectual property rights pertaining to the internationally reputed service mark Westin and its related logo/device. The plaintiff and its predecessors have been in the hotel business for over 60 years and have business operations all over the world, rendering high class hospitality services in the hotels and resorts under the service mark Westin . Westin Hotel is the oldest of the international hotel management companies and is one of the leading hotel companies in the world managing about 70 first class Westin hotels and resorts in 16 countries. There are about 5 lakh members of Westin Premier, all over the world. The service mark Westin possesses a world wide recognition in connection with the high quality services rendered in the hospitality services sector, because of the excellent reliability of the instant reservations. 45. On the other hand, it is the case of the defendant that the plaintiff is not known anywhere in the world as Westin it is not listed in the list of prominent hotels of the world and it has no global reputation in the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth out of a field of 150 entrants at the recent LABTA. Another journal in 1985 as contained in page 28(E) reported the prize awarded to the Westin Hotels. This news is as follows :-- Three Westin Hotels Receive ISO 9002 Three more Westin hotels have been awarded the prestigious International Organization for Standardization (ISO) 9002 certification for Total Quality: the Caesar Park Hotel and The Westin Stamford and The Westin Plaza in Singapore. 51. Some of the journals with worldwide circulation are found in page 91 (a). They are Time Magazine, Newsweek. The Economist, Fortune, Business Week, Far Eastern Economic Review, International Herald Tribune, Asia Week, Business Traveller and Asian Well Street Journal. Pages 92 to 105 give the particulars of the service mark Westin which was claimed by the plaintiff to have registered and pending for registration in various countries. 52. The applications were made for the service mark Westin on behalf of the plaintiff Caesar Park Hotel Investment, Inc. in various countries like Australia, Cambodia, China, Fiji, Hong Kong, India, Indonesia, Japan, Korea, Laos, Macao, Malaysia, Nepal, New Zealand, Papua New Guinea, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erties. ....... Westin and Hyatt also tend to be higher priced than Sheraton and Hilton, which may boost their ratings. Other notable upscale segment results : Westin was first in the key corporate-rate-program category, followed by Sheraton, Marriott, Raddisson, Hyatt and Hilton. Curiously, among this group, Sheraton and Radisson, appear well down the list in overall price/value relation, which would seem to be a related category. 56. In page 166, the news about receipt of numerous awards by Westin Hotels is found. According to the business travel, news, Westin received an overall score of 8.21 out of 10 points and received its highest marks for ease in arranging group travel, Corporate Rate programmes, quality of food, and overall value. For 1995, the American Automobile Association (AAA) awarded two of its prestigious Five-Diamond awards to Weslin hotels and resorts. Five-Diamonds are bestowed only to those exceptional properties which are widely recognized for superior guest facilities, service and atmosphere. Westin's 1995 Five-Diamond award recipients are the Westin Hotels in united Slates and Maxico. 57. It has also been reported in the same report in pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiff and their Indian clients including these General Sales Agents. The reading of these letters would show that the several of these General Sales Agents booked the rooms in Westin hotels on behalf of the Indian clients situated in various countries. This would also make it clear that many Indian clients through the General Sales Agents stayed in the Westin Hotels at various countries and that thereafter the General Sales Agents also obtained their commission. 66. Besides this, the Westin Hotels maintain frequent guest recognition programme called 'Westin Premier'. This is an exclusive Club of individuals, who patronise the Westin Hotels world over. According to the plaintiff, there are about 5 lakh members of Westin Premier, out of whom a large number are from India. 67. Pages 63 to 74 contain the list of members holding Westin Premier in India. Pages 75 to 77 contain the letters from Westin, U.S.A. to one of the General Sales Agents, Hotel world Corporation in New Delhi on 6-3-1989 to publish the press release and the copy of the new Directory of plaintiff hotels. On 10-4-1989 along with the reply, the Hotelworld Corporation enclosed the photo-copies of testimon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices has been taking place in India at least from 1988. 72. Yet another significant factor has to be taken note of. Recently, the plaintiff came to know that Days Inn of America, Inc. has entered into an agreement with the defendant Westinn Hospitality Services to manage Days Inn properties in India, Malaysia, etc. Since the plaintiff fell mat the appearance of the 'Westinn' name in conjunction with the hotel services is certain to cause confusion with the name Westin , the plaintiff's well established mark for Premier Hotel services, and it would have an adverse impact on the Westin valuable reputation, the plaintiff sent a notice on 15-11-1995 to the Days Inn of America, Inc. to advise Westinn Hospitality Services to change its name to one that is not confusingly similar to Westin . 73. On receipt of the above notice, Days Inn of America, Inc. requested the plaintiff for additional information regarding the plaintiff's trade mark application and registration in India. Accordingly, on 21-11-1995 it sent the particulars of applications filed in India for registration for the Westin symbol on 23-11-1992, totally 14 applications pending. It also gave deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viding an automatic hotel reservation system. 78. According to the plaintiff, the defendant came to be incorporated as a Private Limited Company under the name Westinn Consultants Private Limited in August 1989. The main objects of the Company as contained in the Memorandum of Association related to the consultancy activities, namely, acting as advisers and consultants on all matters and problems relating to the technical, industry, civil administration, finance and organisation, management, commencement, extension of industry, etc. As such, the Company had nothing to do with the carrying on the business of tourist and travel agency or rendering service in the hospitality services sector. 79. Only in August 1991, the defendant passed a special resolution resolving to commence business of travel assistance. Thereafter, on 18-12-1992 the defendant changed its name from Westinn Consultants Private Limited to Westinn Hospitality Services Private Limited. Only thereafter, the defendant entered into the hospitality sector. The defendant had two divisions. One is Westinn Consultants and another is Hotlink. Westinn Consultants was merely concerned with providing consultancy service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous fields including the hotel project. Most of them are the letters sent by the various firms in India and other foreign countries acknowledging the letters sent by the Westinn Consulting Group intimating about the formation of the firm giving consultancy in various fields. 84. Among these documents, document Nos. 15, 26 and 27 are the letters sent to the Westinn Consulting Group by the firms from foreign countries. The document No. 15, a letter dated 3-11-1989 was sent by Westinn International, Inc. to the predecessor of the defendant acknowledging the letter from Westinn Consulting Group expressing willingness to give service and cooperation for the best western hotels in India. 85. Document No. 26 is the letter dated 14-11-1990 sent by Augustine International, Los Angeles, U.S.A. in response to the letter sent by the Westinn Consulting Group sending proposals for five star hotel project. These letters correspondence would show that the Westinn Consulting Group formed under the partnership deed on 18-1-1989 have indulged in the activities mainly on hotel project. 86. Document Nos. 28, 32 and 35 are the advertisements in THE HINDU dated 30-11-1991, 6-2-1992 and 8-4-1992 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Hotlink to launch new hotel reservation system; (v) Hotlink's unique reservation system; (vi) Hotlink develops new hotel marketing system; (vii) Hotlink Reservation System for travelers ; (viii) Hotlink launches unique system; (ix) Hotlink develops a unique reservation system; (x) Computer hotline; (xi) Hotlink facility; (xii) Unique reservation system by Hotlink (xiii) Hotlink launches new hotel reservation system. These things would show that the entire advertisements in all the papers published in India as well as in other countries only projected through the name 'Hotlink'. Of course, it is true that in these advertisements, in small letters it is mentioned as a division of Westinn Consultants . 89. However, pages 107 to 114 in document No. 68, advertisements published in Express Hotelier and Caterer on 5-6-1995, 24-7-1995, 21-8-1995, 9-10-1995, 16-10-1995, 23-10-1995, 6-11-1995 and 13-11-1995 would reveal that the advertisement was given in the name of Westinn by the Westinn Hospitality Services Limited. It is also strange to note the word 'Hotlink' which was projected earlier in a big way was Completely omitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Managing Director of the Westinn stated that the Westinn owns, operates and manages several hotels in Madras, Delhi, Bangalore, Hyderabad and Cochin. Moreover, in document No. 6 in Form No. 1A filed by the defendant on 9-5-1989 for availability of name of the defendant Westinn name with the Registrar of Companies, it is mentioned as the main object of the proposed Company -- to promote a hotel. 95. As a matter of fact, the defendant in para 29 of the counter-affidavit filed before the learned single Judge would state that the tie up with Days Inn does not prevent the defendant from using its trading style/corporate name 'Westinn'. Therefore, the contention urged by the defendant that their field of activity is completely different from that of the plaintiff, cannot be countenanced, in view of the fact that the defendant has been from the beginning indulging in the matters relating to the promotion of hotels and hotel reservation system originally in the name of 'Hotlink' and now in the name of 'Weslinn'. 96. In these circumstances, the situation as submitted by the counsel for the plaintiff that the franchisee agreement between the defendant and Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interlocutory application. Therefore, the above discussion and conclusion are based upon the documents without giving any finding with reference to the genuineness of the documents. 99. Under the above circumstances, we arrive at the following conclusions :-- (i) Normally in the miscellaneous appeals, the discretionary orders passed in the matter of granting or refusing interim injunction are not interfered with. But in this case, we are of the view that the learned single Judge exercised the discretion without adhering to the well settled principles of law governing the exercise of such discretion and regarding the passing off action. (ii) Though the hotel business has not been carried on in India, the plaintiff could bank upon trans-border reputation, so as to maintain a passing off action in India. The documents filed in this case by the plaintiff prima facie establish that there has been trans-border reputation and goodwill in India and the service mark 'Westin' had been advertised in magazines having international circulation including India. In other words, the reputation of the plaintiff company was travelling trans-border to India as well through commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in U.S.A. has filed the present suit. Therefore, it cannot be said that there is undue delay and that there are laches on the part of the plaintiff in approaching the Court. 100. In view of the above conclusions, we feel that the plaintiff had made out a prima facie case having regard to the trans-border reputation established by it and that the balance of convenience is in favour of the plaintiff, inasmuch as, if the injunction order is not granted, the plaintiff would be put to great hardship and he may be put to irreparable loss. 101. In the result, for the reasons stated, we allow these appeals and set aside the order under appeals passed by the learned single Judge. Consequently, we allow O.A. Nos. 163 and 164 of 1996inC.S.No, 141 of 1996 and grant ad interim injunction as prayed for. No costs. In view of the disposal of the appeals, no separate orders are necessary in C.M.P. Nos. 17259 and 17260 of 1997. 102. However, we make it clear that the observations made by the learned single Judge in the order under appeals, or in the judgment of this Court, are confined only for the purpose of disposal of the interim applications and that they do not affect the merits of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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