January 13, 2023
Court: Delhi High court
Case: VINTAGE DISTILLERS LIMITED VS RAMESH CHAND PAREKSH
This case was filed before the Hon’ble High Court of Delhi by the Plaintiff for the infringement and passing off of the mark DHOLA MARU by the Defendants who started using the mark DHOLA THARU. The Plaintiff filed the suit along with an Application for Ad-interim Injunction under Order 39 Rule 1 & 2 whereasthe Defendant filed an Application under Order 7 Rule 10 for Rejection of plaint on the ground of lack of territorial jurisdiction.
Facts of the Case
The facts of this case are as such that the Plaintiff has been in the business of Alcohol since 1988, and amongst various brands DHOLA MARU is one of them. The Plaintiff’s mark was coined and adopted in 2004 for country liquor range and is inherently distinctive. The Plaintiff having its principal office in Delhi sells its products in the State of Rajasthan as per the excise license. The Plaintiff does have the registration of its label but for the word mark “DHOLA MARU” is still pending. The Plaintiff when got to know about the identical mark of the Defendant DHOLA THARU,moved forward the present suit.
Arguments of the Plaintiff
- That the Plaintiff is the registered proprietor of the label and the word “DHOLA MARU” is the dominant part of the mark. The label mark did undergo some changes which was done in compliance of the Excise notification but still the word “DHOLA MARU” was consistently used. The label is also protected under the Copyright Act, 1957, making the Plaintiff owner of both the statutory and common law rights. The plaintiff produced invoices and documents supporting sales turnover since the beginning of use of the mark thus it can be said that the Applicant has goodwill and reputation in this mark.
- The defendant is involved in the same business and is using an identical mark and label style of the Plaintiff. The Defendant also moved forward by applying for trademark registration which is filed on proposed to be use basis and excise license for Rajasthan.The Plaintiff has filed this suit as a qua timet action with the apprehension that the Defendant will start selling the impugned products in Delhi. The Plaintiff in their rejoinder submitted that the apprehension of threat is there as admitted by the defendant about its growing business in the reply to Application under Order 39 1& 2.
- The Plaintiff in the Rejoinder stated that the right to sue for infringement is there with the Applicant regardless whether the trademark has been in use or not. Though there is law for cancellation of trademark as per Section 47(2), the same cannot be used as a defense against infringement.
Arguments of the Defendant
- The Defendant submitted that even though the suit was filed in the Jurisdiction of Delhi on the ground that Plaintiff has its office in Delhi and that the Defendant’s Application was filed with an all-India effect or that there was apprehension of start of sale in Delhi, the Plaintiff has failed to prove such alleged intentions of Defendant to start selling the impugned products in Delhi.
- It was also submitted that the Plaintiff had only registration of a label and not of the word DHOLA MARU. The label also was not in use by the Plaintiff and therefore no reliance could be taken on that.Their main argument was that the Plaintiff holds registration only for the Label Mark that has to be considered as a whole. They also submitted that the mark was in compliance of the Excise Notification and therefore were in in the shade ofRed or Blue depending on the Alcohol concentration in the alcohol. But since it is a passing off action, there should be proof of same but the Plaintiff has failed to do so.
- The Defendant relied on Section 17 of the Act which states that the mark should be considered as a whole and not in dissected parts.The defendant supported their claims by saying that they operated the Thar Group of Companies, and the reason for the adoption impugned trademark was that THARU community enjoyed liquor, Dhola is a common word for drum and THARU is also derived from their corporate name. It was also contended that the Plaintiff’s mark is incapable of protection as it is common among the people of Rajasthan and various 3rd parties have registered similar marks prior to Applicant’s mark.
- The Defendant contended that the suit shouldbe dismissedas Plaintiff suppressed material facts of Excise notification regarding labeling. The Defendant also stated that Plaintiff’s Mark is liable to be cancelled due to non-use of the mark since it has lost its distinctiveness and is merely squatting on the mark.
- The defendant stated that the Plaintiff has wrongly claimed Qua Timet action when plaintiff only mentioned about finding Defendant’s products in the market.
Observations by the Court
- The Court observed that it is essential to decide on the Application filed under Order 7 Rule 10 before moving forward with the application for interim injunction. The question of jurisdiction in this suit is two-fold:
a. No evidence shown to support the contention of apprehension & threat.
b. The Plaintiff manufactures and sells in Rajasthan and has no proof of sale within Delhi’s jurisdiction.
The court relied on Teva Pharmaceutical Industries Ltd. &Ors. and Pfizer Products, Inc. v. Rajesh Chopra & Othersto establish that pleading apprehension of sale/marketing at a certain place is sufficient to establish jurisdiction. It was also cited from one of the precedents that where issue of territorial jurisdiction is raised, only the plaint needs to be seen on plain demurrer and the allegations or averments are to be taken as correct. In order to succeed in the objection to the jurisdiction, Defendant must demonstrate that granted the averments made in plaint, Court does not have territorial jurisdiction, as a matter of law. It was also stated that since it is a case of trademark as well as copyright, the plaintiff has additional places through the provisions of their respective acts as well. It was stated that by applying the provisions of Section 134 (2) of Trademark Act and Section 62(2) of the Copyrights Act as pleaded by the Plaintiff and even Sections 19 and 20 CPC, it is clear that the court has territorial jurisdiction to file the suit as it is a qua timet action, the trademark applications are filed with all-India effect, the head office of the Plaintiff is in Delhi and there is no branch of the Plaintiff.
- The Court on the second question which was on the merits of the suit, discussed the provisions under Section 28 & 29 of the Act. The court stated that there is no dispute that Applicant is the registered proprietor of the Label Mark and not the word mark DHOLA MARU separately. While discussing various precedents, the court stated that though the mark has to be seen as a whole as per the anti-dissection principle, but that can go hand in hand with identifying the dominant mark. The concept of essential feature was also discussed which when simply put means that every mark has a prominent or a dominant feature which has to be seen while adjudicating the question of infringement or passing off. The Court decided by stating that DHOLA MARU is the essential/dominant feature of the label mark, and therefore the Defendant’s plea that Plaintiff doesn’t have a right over DHOLA MARU is unfounded.
- ……that even in case of a label/device marks, it is possible for the Court to follow the ‘dominant’ mark test and in case it is found that Defendant’s mark appropriates the essential features of the Plaintiff’s mark, albeit it is a component of a whole mark (label ordevice), Court can compare the essential features of the rival marks todetermine if there is any identity/deceptive similarity to determine ifthere is infringement….
- The Court also stated that the marks are not identical, but the deceptive similarity has to be seen. The Court cited Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.,(2001) 5 SCC 73,stating that the Supreme Court emphasized the principle ofphonetic similarity cannot be jettisoned, even if the manner in whichthe two competing marks are written is different. And from the perspective of a man with average intelligence, the competing marks are phonetically, visually and structurally similar to each other. Even the goods of both the marks are identical.
(a) Strength of the mark;
(b) Degree of similarity between the rival marks; (c) proximity of products;
(d) Likelihood that prior owner will bridge the gap;
(e) Actual confusion;
(f) Reciprocal of defendant’s good faith in adopting its own mark (bad faith);
(g) Quality of Defendant’s product;
(h) Marketing channels; and
(i) Defendant’s intention in reflecting the mark.(Para 36)
- The triple identity test was also satisfied in this case, thus making a prima facie suit of infringement. The court stated that if a common word is used for goods which has no correlation, the mark becomes Arbitrary.
- The Defendant’s contention of “DHOLA MARU” being a generic word was also rejected as the court found no reference to character or quality of the goods applied for.
- The court cited Shree Nath Heritage Liquor Pvt. Ltd. to demerit the Defendant’s contention that the mark is common to trade by stating that just because a mark is common to register doesn’t mean it is common to the trade.
- Since there is no proof that abandonment or non-use of the label mark is deliberate, it cannot be used as a defense against infringement.The court stated that non-use of a registered mark doesn’t deny the protection it is entitled to. The Act does provide a remedy to apply for removal of a mark because of its non- use but such a defense cannot be taken in a case of infringement. But the provision of Section 47(2) cannot apply if a non-use is because of special circumstance such as restriction because of a law or rule/regulation such as in this case.The only variation in the mark is due to the regulation of Excise law but the prominent feature of the mark “DHOLA MARU” is still the same.
- Both parties are well-knownCompanies in their respective fields and it cannot be said thatthe Defendant was unaware of Plaintiff’s business or trademarks. Defendant’s explanation for adoption of mark was also not believed. The effort by the Defendant to come as close aspossible to “DHOLA MARU” is evident by juxtaposing the two words DHOLA and THARU in their impugned mark. The Court also stated that it is clear that such adoption of mark was done to ride on the reputation of the Plaintiff.
- For the question of Passing Off, the remedy is that of common law and based on the idea that no one is allowed to pass off their goods as someone else even if such an act is non-fraudulent. Since the class of people who purchase the goods for which the trademarks are applied may not be literate and may not be able to find the difference there is a prima facie case of infringement and passing-off.
The Application for ad-interim injunction was allowed and the matter was listed for next date to hear the suit.
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