Topic: Marico Limited vs Agro Tech Foods Ltd - Low Absorb Case

Marico Limited vs Agro Tech Foods Ltd
The High Court Of Delhi At New Delhi - Judgment delivered on: 23.04.2010 IA No. 11037/2009 & IA No. 11538/2009 - in CS(OS) No. 1590/2009 - Coram :- Hon'ble Mr Justice Rajiv Shakdher


IA No. 11037/2009 (O.39 R.1&2 CPC by pltf.) & IA No. 11538/2009 (O.39 R.4 of CPC by Deft.)

1. By the present order I propose to dispose of the captioned interlocutory applications (hereinafter referred to as ‗IAs'). The plaintiff, in support of his case has filed IA No. 11037/2009 under the provisions of Order 39 Rule 1 and 2 read with Section 151 of the CPC of the Code of Civil Procedure, 1908 (hereinafter referred to as the ‗CPC'), while the defendant has filed IA No. 11538/2009 under the provisions of Order 39 Rule 4 read with Section 151 of the CPC for vacation of the interim order dated 28.08.2009. By order dated 28.08.2009 the defendant, its agents, assigns and all others acting for and on behalf of the defendant were restrained from using the trademark LOW- CS(OS) 1590-2009 Page 1 of 36 ABSORB and LOW ABSORB TECHNOLOGY or any other mark deceptively similar to the plaintiff and in relation to its goods.

2. For the purposes of disposal of the applications, the following facts are to be noticed:


2.1 The plaintiff, which was incorporated on 13.10.1988, claims to be one of the quickest growing Fast Moving Consumer Goods (in short ‗FMCG') companies in India. The plaintiff manufactures and trades in large range of products and hence, is a proprietor with respect to such products sold by them in India and abroad. Amongst various businesses, the plaintiff is also in the business of manufacture and sale of edible oil products.

2.2 The plaintiff claims that in and around January, 2001 it coined the mark ―LOW ABSORB‖, which, over a period of time was used in relation to those products which had the quality of absorbing ―less‖ oil. The technology involved is evidently based on an additive used in the production of edible oil which retards the foaming of oil during the process of frying and/or cooking. Resultantly, the additive which is essentially an anti- foaming agent, according to the plaintiff, reduces the absorption of oil by the food stuff during the process of frying. The said mark ―LOW ABSORB‖ was extensively advertised by the plaintiff.

2.3 The plaintiff has since then obtained a registration of the trade mark ―LO-SORB‖ and also ―LOSORB‖. Both registrations were obtained in class 29 which are effective from 28.05.2001. The plaintiff further claims that each month, it sells about 17.5 lacs of units of edible oils under the mark ―LOW ABSORB‖ and ―LOSORB‖ through its 53000 outlets which are spread all over India. The edible oil manufactured by the plaintiff is also evidently sold in the neighbouring countries like Nepal and Bhutan as well as some south-eastern countries.

CS(OS) 1590-2009 Page 2 of 36 2.4 The plaintiff claims that in October-November, 2005, it aired advertisements staring the famous chef Sanjeev Kapoor to promote its goods under trade mark ―LOSORB‖. It claims that it spend nearly Rs. 1.20 crores on the said advertisement. It is also averred that services of other super models such as Ms Noyonika Chatterjee and Ms Indrani Dasgupta were availed of for the purposes of advertisement in 2005. It is specifically averred that in so far as sales figure of the edible oils sold under the mark ―LOW ABSORB‖ and ―LOSORB‖ are concerned, they have arisen from Rs 102.48 crores in the year 2001-02 to nearly Rs 515.43 crores in the year 2008-09. In the first quarter of 2008-09, it has registered a sale revenue of around Rs 131.10 crores. The advertising expenditure, between the period 2005-06 to 2008-09, has arisen from Rs. 3.90 crores to Rs 9.54 crores. In sum and substance, the case of the plaintiff is that extensive user and publicity accompanied by the high quality of its goods has resulted in the trade mark ―LOW ABSORB‖ and ―LOWSORB‖ being extensively identified and associated with it.

2.5 The plaintiff alleged that in August, 2009, they came across the defendant's advertisement in respect of edible oil manufactured and sold by the defendant under the trade mark Sundrop which was accompanied by the plaintiff's trade mark ―LOW ABSORB‖ and ―LOWSORB‖. It is alleged that the defendant has not only adopted the plaintiff's mark ―LOW ABSORB‖ but also suffixed the mark with the word ―TECHNOLOGY‖. A fact, that it is used as a trade mark is evident from a bare perusal of the advertisements wherein, the expression/word ―LOW ABSORB TECHNOLOGY‖ are accompanied by the letters ‗TM'. It is thus alleged that by using the letters ‗TM' along with ―LOW ABSORB‖, the defendant has made a false representation that it has exclusive rights over the use of the said mark. It is thus averred by the plaintiff that the defendant, by using the word ―LOW ABSORB TECHNOLOGY‖ in relation to edible oil manufactured by it, is seeking to trade upon, and benefit from the goodwill and reputation attached to the plaintiff's mark ―LOW ABSORB‖.

CS(OS) 1590-2009 Page 3 of 36 2.6 According to the plaintiff, its inquiries in the market have revealed that the defendant has been using the mark ―LOW ABSORB TECHNOLOGY‖ since July, 2009. In order to assert its proprietary rights over the mark ―LOW ABSORB‖, the plaintiff issued a cease and desist notice to the defendant on 14.08.2009 which was responded to by the defendant vide its reply dated 25.08.2009. In view of the fact that the defendant did not comply with the demand made by the plaintiff, the present action was instituted in court.

2.7 The plaintiff thus claims that:

(i) the usage of the mark ―LOW ABSORB‖ by the defendant is a colourable imitation of the plaintiff's registered mark ‗LOSORB'. There is, therefore, an infringement of the plaintiff's exclusive right to use of the trade mark ‗LOSORB' in relation to edible oils;

(ii) the use of the mark ―LOW ABSORB‖ along with the word ―TECHNOLOGY‖ is an attempt by the defendant to mislead the trade and the public that it has firstly, rights in the said mark, and secondly, there is an association of the goods with the plaintiff, whereas in fact there ought to be none;

(iii) the use of the mark ―LOW ABSORB‖ by the defendant without due cause seeks to take unfair advantage and is detrimental to the distinctive character, reputation and goodwill of the plaintiff in its registered mark ―LOSORB‖ and ―LO-SORB‖; (iv) the use of the trade mark ―LOW ABSORB‖ by the defendant in relation to its goods, is calculated to deceive and cause confusion in the minds of the customers, who may relate the defendant's goods as those originating from the plaintiff; and, (v) lastly, the use of the mark ―LOW ABSORB‖ by the defendant seeks to dilute the plaintiff's trade mark, which is well known and, has distinctive character and reputation. The defendant's acts amount to unfair competition.

CS(OS) 1590-2009 Page 4 of 36 2.8 In support of the fact that the defendant has recognized the plaintiff's right over the ―LOW ABSORB TECHNOLOGY‖, a reference is made to the complaint lodged by the plaintiff before the Monopolies and Restrictive Trade Practices Commission. In particular, a reference is made in this regard to the order dated 23.07.2002 passed by the Commission on an application for grant of interim injunction filed by the defendant under Section 12 A of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as ‗MRTP Act').


3.1 The defendant, on the other hand, has refuted the case set up by the plaintiff. It is averred by the defendant that it has a legitimate right to use the expression ―LOW ABSORB TECHNOLOGY‖ on the packaging of its sunflower oil sold under trade mark "Sundrop". This right, it asserts on the basis that its product edible includes an anti- foaming agent, which in turn, retards the absorption of oil during the process of frying food stuffs. Therefore, the use of the word ―LOW ABSORB TECHNOLOGY‖ is justified.

3.2 In this regard, reference is made to Section 35 of the Trade Marks Act, 1999 (hereinafter referred to as ‗Trade Mark Act') which, according to the defendant, permits use of the words or expression which are descriptive of the character and quality of goods and services even against the proprietor of a registered trade mark. There can be, according to the defendant, no monopoly conferred upon the plaintiff in use of the words ―LOW ABSORB TECHNOLOGY‖ or the term ―LOW ABSORB‖.

3.3 The defendant has also refuted the claim of the plaintiff that it has recognized the plaintiff as a precursor in the use of ―LOW ABSORB TECHNOLOGY‖. It is averred that the technology of adding anti-foaming agent in oil to induce more absorption properties is universally prevalent, a fact which is evident from a bare perusal of the provisions of Rule 26A of the Prevention of Food Adulteration Rules 1955 (in short ‗PFA CS(OS) 1590-2009 Page 5 of 36 Rules') framed under the Prevention of Food Adulteration Act, 1954 (in short the ‗PFA Act'). In support of its claim that the only difference between the product manufactured and sold by the plaintiff under the trade mark "Sweekar" and that of the defendant sold under the trade mark "Sundrop" was, that at the relevant time when the proceedings were pending before the MRTP Commission, the plaintiff had been using in the manufacture of its product an anti-foaming agent which induced properties of low absorption of oil whereas, the defendant's product did not include the said ingredient. In support of its submission, reliance is placed on the affidavit of the officer of the plaintiff filed before the MRTP Commission.

3.4 It is further stated that the defendant is using the expression ―LOW ABSORB TECHNOLOGY‖ in a descriptive manner by making an honest declaration of the ingredients of its product and not as a trade mark as alleged by the plaintiff. 3.5 In addition, the defendant has taken a serious objection to the fact that the plaintiff had filed a trade mark application bearing no. 1012561 dated 28.05.2001 for registration of its mark ―LOW ABSORB‖, which, upon a search conducted, indicates that the same stands withdrawn. The defendant has asserted that the said application was withdrawn upon an examination report issued by the Trade Mark Registrar after taking into consideration the provisions of Section 9 of the Trade Marks Act, wherein are contained grounds for refusal of registration of the mark sought by an applicant. In the alternative it is pleaded that the plaintiff has considered the mark as descriptive and hence, withdrew the same.

3.6 The defendant has also averred that the letters ‗TM' has reference to the entire expression/mark ―LOW ABSORB TECHNOLOGY‖ and just not ―LOW ABSORB‖ as is alleged by the plaintiff. There is, therefore, according to the defendant, no misrepresentation as alleged by the plaintiff. In any event the registered mark of the plaintiff is ―LOSORB‖ or ―LO-SORB‖ and not ―LOW ABSORB‖. Therefore, when CS(OS) 1590-2009 Page 6 of 36 ―LOW ABSORB‖ is accompanied by the word ―TECHNOLOGY‖ there is no chance of misrepresentation as alleged by the plaintiff.

3.7 It is averred that the use of the mark ―LOW ABSORB‖ by the plaintiff in relation to its product is descriptive of the character of the product; the trade mark being Sweekar which is the source identifier. It is the defendant's case that plaintiff's right in the registered mark, if at all, can only be infringed if the impugned mark is used in a manner so as to render the use of the mark likely to be taken as being used as a trade mark. According to the defendant the use of the expression ―LOW ABSORB TECHNOLOGY‖ is not likely to be taken as being used as a trade mark.


4. In support of the case set up by the plaintiff Mr Sandeep Sethi, learned senior counsel, instructed by Ms Anuradha Salhotra made the following submissions: 4.1 The plaintiff has obtained registration of the trade marks ―LOSORB‖ and ―LO- SORB‖ which relates back 28.05.2001. The plaintiff has been using the term ―LOW ABSORB‖ along with its registered marks since 2001. The defendant's use of the trade mark ―LOW ABSORB‖ in relation to edible oil in 2009 is dishonest. The learned counsel drew my attention to sales and revenue figures, which I have already made note of hereinabove. Particular stress was laid on the fact that the defendant, who was a complainant before the MRTP, had itself accepted the fact that the plaintiff had spent a sum of nearly Rs 2.43 crores on advertisement of the mark ―LOW ABSORB‖ and ―LOSORB‖. It was thus contended by the learned counsel that the defendant is guilty both, in respect of, infringement of plaintiff's registered trade mark as well as commission of tort of passing off. In support of its case for infringement Mr Sethi invoked the provisions of Section 29(1) read with Section 2(1)(h) of the Trade Mark Act. For this purpose he relied upon the following judgments:

CS(OS) 1590-2009 Page 7 of 36 Rustan & Hornby vs Zamindara Engineering Co. AIR 1970 SC 1649 at page 1650 para 5 and at page 1651 para 7; Kaviraj Pandit Durga Dutt Sharma vs Navaratna Pharmaceutical Laboratories AIR 1965 SC 980 at page 990 para 28 and Cadila Health Care Ltd vs Cadila Pharmaceuticals Ltd. 2001 PTC 300 (SC) at page 310. 4.2 In so far as plaintiff's case for tort of passing off against the defendant is concerned, Mr Sethi stressed the fact that there has been an extensive use of its un- registered mark ―LOW ABSORB‖, which to the knowledge of the defendant had acquired extensive goodwill. It was submitted that it is no defence available in action for passing off that the term ―LOW ABSORB‖ is generic as long as the plaintiff is able to show that it has acquired goodwill in the mark ―LOW ABSORB‖. He further submitted that registration of the mark does not disentitle the plaintiff from saying the defendant for passing off as well. For this purpose, the reliance was placed on the provisions of Section 27(2) of the Trade Mark Act, as also the judgment in the case of N.R. Dongre vs Whirlpool Corporation 1996 (7) JT S.C. 555.

4.3 It was submitted that the plaintiff is required to prove prior user. The extent of user is also not relevant. Reliance for this proposition was laid on the following judgments:

Century Traders vs Roshal Lal Duggar AIR 1978 Del. 280 at page 259 para 14 and at page 252-253 para 12; B.K. Engineering vs U.B.H.I. Enterprises (Regd.) Lidhiana AIR 1985 Del. 210 at page 219 paras 51 and 52 and at page 215 para 26 and Laxmikant V. Patel vs Chetanbhai Shah (2002) 3 SCC 65 at page 73 para 13. 4.4 It was further contended by Mr Sethi that the defence of Section 35 of the Trade Marks Act is limited only to an infringement action and that too if the use of the mark by the defendant is bonafide and not used as a trademark. In support of this submission reliance was placed on the following judgments:

Baume & Coy Ltd vs Moore (A.H.) Ld 1958 RPC 226 at page 234 lined 16 & 34 and at page 235 line 31 and Picot Limited vs Goya Limited 1967 RPC 573 at page 577 line 467 and at page 578 line 30.

CS(OS) 1590-2009 Page 8 of 36 4.5 The learned counsel for the plaintiff submitted that the defence taken up by the defendant that the mark ―LOW ABSORB‖ was generic or descriptive is not a defence available in an action for infringement of trade mark. For this purpose he relied upon the judgment of Picot Limited (supra) at page 577 line 46 and at page 578 line 30. It was Mr Sethi's contention that a generic mark can acquire secondary meaning. In support of this submission reliance was placed on the following judgments: Mohd. Rafiq vs Modi Sugar Mills AIR 1972 Del. 46 page 47 para 6 and page 49 para 10; Globe Super Parts vs Blue Super Flame Industries AIR 1986 Del. 245 at page 256 para 45; Info Edge (India) Pvt. Ltd. vs Shailesh Gupta 2002 (24) PTC 355 (Del.) at page 365 para 23; Ishi Khosla vs Anil Agarwal 2007 (34) PTC 370 (Del.) at page 381 para 27; Godfrey Phillips India Ltd vs Girnar Food & Beverages (P) Ltd. 2004 (5) SCC 257 at page 258 para 4 and Mattel Inc. & Ors. vs Jayant Agarwalla & Ors. 2008 (38) PTC 416 (Del.) at page 431 para 33, at page 432 para 35 and at page 433 para 37. 4.6 In these circumstances, it was contended by Mr Sethi that since ingredients of both infringement and commission of tort of passing off were present, injunction ought to be confirmed.

5. Mr V.P. Singh, learned senior counsel, instructed by Mr Pravin Anand, on the other hand in rebuttal made the following submissions:

5.1 The injunction in the present case ought to be vacated on the sole ground, as noticed above, that the plaintiff had failed to disclose the fact that it had withdrawn its application no. 1012561 dated 28.05.2001 for registration of its mark ―LOW ABSORB‖. The non-disclosure of this information disentitles the plaintiff from grant of any equitable relief.

5.2 The reason as to why the application was withdrawn and the material with regard to the same is available with the plaintiff. Failure on the part of the plaintiff to disclose the same should result in the court drawing an adverse inference. Reliance in this regard CS(OS) 1590-2009 Page 9 of 36 was placed on the judgment of National Insurance vs Kusum Devi 1999 ACJ 1213 and Gopal Krishanji vs Mahomed Haji AIR 1968 SC 1413.

5.3 The dispute before the MRTP commission was only with respect to whether or not the advertisement issued by the plaintiff was one which disparaged the goods of the defendant and also made a false representation to the public that the plaintiff's product absorbed less oil. It had nothing to do with acceptance of the plaintiff's proprietary rights over its un-registered mark ―LOW ABSORB‖.

5.4 The interlocutory order of the MRTP Commission accepted the right of the plaintiff to use the expression ―LOW ABSORB‖ because its product contained the ingredient which acted as an anti-foaming agent thereby, retarding the absorption of oil during the process of frying food stuffs. This technology finds a reflection in Rule 62-A of the PFA Act. Therefore, as the defendant was also using the said ingredient in the product edible oil manufactured by it; it was entitled to convey the same to the public at large. This right was conferred on it under Section 35 of the Trade Marks Act; therefore, since in the circumstances set out above it could only be construed as bonafide use of the expression ―LOW ABSORB TECHNOLOGY‖. He further contended that the labels used by both parties were completely distinct and dissimilar and, there was no possibility of any confusion or, deception of members of the public, or trade as alleged by the plaintiff. According to him the term ―low absorb‖ is commonly used to describe the characters of such a product. The term being generic and in public domain the plaintiff cannot claim monopoly over the same. It was Mr Singh's contention that both the plaintiff and the defendant has been using the term ―LOW ABSORB‖ along with their respective trade marks, i.e., Sweekar and Sundrop. Both for the plaintiff as well as the defendant, the marks were descriptive of the character of their respective products. Mr Singh stressed upon the fact that the defendant is using the impugned expression ―LOW ABSORB TECHNOLOGY‖ in relation to its refined Sunflower edible oil merely in a descriptive manner by making an honest declaration of the ingredients contained in the CS(OS) 1590-2009 Page 10 of 36 defendant's product. Mr Singh contended that the marks being could not have been registered. In any event, mere registration does not preclude the court from taking a view in the matter. Reliance in this regard was placed on the following judgments: Lowenbrau AG & Anr. vs Jagpin Breweries Ltd & Anr. MIPR 2009 (1) 356; SBL Ltd vs Himalaya Drug Company 1997 PTC (17); J.R. Kapoor vs Micronix India 1994 Supp. (3) SCC 215; Horlick's Malted Milk vs Summerskill (1917) 34 Illustrated Official Journal (Patents) 63; Asian Paints Ltd vs Home Solutions Retail (India) Ltd. 2007 (35) PTC 697 (Bom.) and Sant Kumar vs Ram Lakhan 1999 II AD (Del.) 804. 5.5 Mr Singh further contended that in the instant case not only the trade marks, that is, ―Sweekar‖ used by the plaintiff, and ―Sundrop‖ used by the defendant are different but even the packaging is dissimilar. The plaintiff cannot enforce its right over the defendant's use of the expression ―LOW ABSORB TECHNOLOGY‖ without filing a separate trade mark application. Reliance in this regard was placed on Indian Habitat Centre vs Sunita Aeren MIPR 2008 (2) 379.

5.6 He further contended that the plaintiff's right over the expression ‗LOSORB' cannot extend to ―LOW ABSORB‖ which is descriptive of the goods in question. The defendant is using the words ―LOW ABSORB‖ only by way of information by giving prominence to its trade mark Sundrop. The expression ‗LOSORB' and ―LOW ABSORB‖ are distinct and dissimilar, and since packaging is also different there is no likelihood of confusion in the minds of the general public. Reliance in this regard was placed on the following judgments:

Cadila vs Dabur 2008 (38) PTC 130 (Del.) and Cadila Healthcare Ltd vs Gujarat Co- operative Milk Marketing Federation Limited & Ors. 2008 (36) PTC 168 (Del.) REASONS

6. I have heard the learned counsel of the parties and also examined the case set up by the parties. In my view, the plaintiff has attempted to support its case both on the ground of infringement of its registered mark ‗LOSORB' and ‗LO-SORB' as also on CS(OS) 1590-2009 Page 11 of 36 ground of commission of tort of passing off by the defendant of its un-registered trade mark ―LOW ABSORB‖.

6.1 What is come through in the arguments, is that, both the plaintiff and the defendant as of today manufacture edible oil in which one of the additives is an anti- foaming agent which retards the absorption of oil by food stuffs during the process of frying. Both counsels before me have not disputed this position. Therefore, a priori the issue which arises for consideration is: are the registered marks ‗LOSORB' and ‗LO- SORB' prima facie valid? The statutory rights of the plaintiff under Section 29 of the Trade Marks Act qua infringement of its mark are subject to the provisions of Section 28 of the Trade Mark Act. The relevant part of sub-section (1) of Section 28 of the Trade Marks Act, for the sake of convenience is extracted hereinafter: "28. Rights conferred by registration. - (1) Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act."

6.2. A bare reading of the provisions sub-Section (1) of Section 28 would show that the rights conferred by registration of a mark is subject to: firstly, other provisions of the Act, and secondly, the exclusive right conferred on the registered proprietor or permitted user is circumscribed by the expression ‗if valid'. Similarly, Section 30 in particular sub- section (2) clause (a) of Section 30 provides that a registered mark is not infringed, where the use is made to describe inter alia ‗kind' or ‗quality' of goods or services as the case may be. Contra distinguish this with Section 31 of the Trade Marks Act, which provides that in all legal proceedings relating to a registered mark the original registrations and all subsequent assignments and transmissions shall be taken as prima facie evidence of its validity. This necessarily would mean that it does not foreclose a challenge to the validity of the registration of a mark. In case of Lowenbrau AG (supra), a single Judge CS(OS) 1590-2009 Page 12 of 36 of this Court, while considering the issue as to whether the validity of the registration of a trade mark could be considered at an interlocutory stage, observed as follows: "11. Section 28 of the Act while referring to rights conferred on registration begins with the words 'registration of trade-marks shall, if valid,... 'Rights under Section 28 flow when the registration of the mark is valid. Registration is only prima facie evidence of its validity Refer, P.M. Diesels Pvt. Ltd. v. Thukral Mechanical Works, 34(1988) DLT 235= AIR1988Delhi282 . (emphasis is mine)

12. Section 124 of the Act reads:

124. Stay of proceedings .......

(1) xxxx

(2) xxxx.

(3) xxxx.

(4) xxxx.

(5) xxxx.

13. A defendant can set up a defence challenging validity of registration as provided in Section 124 of the Act but the civil court trying the suit is mandated to stay the suit when in defence plea of invalidity of registration is raised, to await outcome of the rectification proceedings and if no proceeding is pending and the court is satisfied that the plea of invalidity is prima facie tenable, adjourn the case for a period of three months from the date of framing of the issues to enable the defendant to approach the authorities for rectification of the registration. Thereafter on filing of an application for rectification trial in the suit is to be stayed till disposal of the rectification proceeding (see, Section 124(2) of the Act). Sub-section 4 of Section 124 states that the suit will be disposed of on the basis of the order passed by the authorities and the question of validity of registration will be binding on the court. Sub-section (5) to Section 124, however, stipulates that the civil Court will be competent to pass an interlocutory order even when procedure under Sub-sections 1 to 4 is to be followed and order of the Registrar/authorities is awaited and the suit is stayed.

14. In view of Section 124(5) of the Act, this Court is competent to adjudicate and decide the interlocutory application for injunction. While deciding the interlocutory application in view of language of Sections 28 and 124 of the Act, the Court is competent to take prima facie view on the question of validity of registration of the mark in favour of either side. Merely because the mark is registered, injunction will not automatically follow, when validity of registration is questioned in the written statement/pleadings. While deciding whether injunction should be granted or not, a tentative view is required to be taken on the question of validity of registration and principles for grant of injunction applied. However, final CS(OS) 1590-2009 Page 13 of 36 decision on validity of registration is to be taken by the authorities and not by the civil Court. Registration is prima facie regarded as valid but mere registration alone is not conclusive and is not binding on the civil court when the application for injunction is considered and decided. Onus, however, will be on the party which questions validity of registration to show that the registration is prima facie and tentatively bad or invalid.

15. Section 31 of the Act reads:

Section 31. Registration to be .......

(1) xxxx.

(2) xxxx.

16. The said Section has to read harmoniously with Sections 28 and 124 of the Act. At the stage of interim application the Court is required to examine question of validity. Registration is prima facie evidence of validity but not conclusive even at this stage. Sub-section 2 to Section 31 of the Act, stipulates that registration of the mark will not be held to be invalid on the ground that the mark could not have been registered under Section 9 of the Act except upon evidence of distinctiveness and there was failure to submit such evidence before the Registrar, provided evidence is filed in the legal proceedings to prove that the mark had acquired distinctiveness on the date of registration. Legal proceedings will include Suits filed by the registered owner of the mark against third parties. Section 32 of the Act, states that if a mark stands registered contrary to Section 9(1) of the Act and registration is bad for lack of distinctiveness on the date of registration, the party can defend the challenge by showing that they have acquired a distinctive character after registration but before commencement of the legal proceedings. These Sections also show that question of distinctiveness can be examined at the stage of grant of interim injunction by the courts.

17. Section 9(1) of the Act is reproduced below:

9. Absolute grounds.......

(1) xxxx

18. Thus whether there was violation and failure to meet conditions of Section 9(1) of the Act, can be examined and a tentative opinion formed by the court for deciding the interim application." (emphasis is mine)

7. In my view ―LOW ABSORB‖ in its various forms including the marks which are registered by the plaintiff or otherwise as used by the defendant is in reality only descriptive of the characteristic of the product, that is, it absorbs ‗less oil' during the process of frying of food stuffs. Prima facie the registration of the mark is suspect. Therefore, in my opinion the rights that the plaintiff claims should inhere in it by virtue CS(OS) 1590-2009 Page 14 of 36 of a registration of mark ―LOSORB‖ and ―LO-SORB‖ under the provisions of Section 29 of the Trade Marks Act are prima facie not available to the plaintiff in the instant case.

8. My view is fortified by the observations of the Supreme Court in the case of J.R. Kapoor (supra). In the said case, the contesting parties were using the marks ―Micronix‖ and ―Microtel‖. The Supreme Court was called upon to adjudicate as to whether the same were deceptively similar. The Supreme Court noted that the word micro was descriptive of the technology used. It was, according to the court, a term of common usage over which no one party could claim monopoly. The following observations of the Supreme Court in this regard being relevant are extracted hereinbelow:

"Further, the word „micro‟ being descriptive of the micro technology used for production of many electronic goods which daily come to the market, no one can claim monopoly over the use of the said word. Anyone producing any product with the use of micro-chip technology would be justified in using the said word as a prefix to his trade name. What is further, those who are familiar with the use of the electronic goods know fully well and are not likely to be misguided or confused merely by the prefix „micro‟ in the trade name. Once, therefore, it is held that the word „micro‟ is a common or general name descriptive of the products which are sold or of the technology by which the products are manufactured, and the users of such products are, therefore, not likely to be misguided or confused by the said word, ....." 8.1 In these circumstances, I am not persuaded that there has been any infringement. Descriptiveness and distinctiveness is a defence available against registered marks as well.

9. In my view, the discussion as to whether the use of the expression ―LOW ABSORB TECHNOLOGY‖ by the defendant is bonafide or not is not of much significance, once I have come to the conclusion that the expression ―Low Absorb‖ is descriptive of the character of the product which is being manufactured and sold by both parties.

CS(OS) 1590-2009 Page 15 of 36

10. There can be no dispute that even a descriptive word can be used as a trade mark provided it becomes ―well known‖ and acquires secondary distinctive meaning. In support of his submission, on this aspect, Mr Sethi had relied upon the sales revenue figures as well as the expenses incurred on advertisements to demonstrate the extensive use of its trade mark. He had supported this submission with the stand taken by the defendant before the MRTP Commission that the plaintiff had expended a sum of Rs 2.43 crores on advertising. In this regard, it is pertinent to note as to what is the composition of the rival labels. The labels of the plaintiff and the defendant is as under: PLAINTIFF'S DEFENDANT'S

11. The colour scheme of the plaintiff's label is red, yellow, orange and white with ―LOSORB‖ written in green, while that of the defendant is blue, yellow with ―low absorb technology‖ written in yellow. Therefore, what is clear is that apart from different colour scheme and get up, the rival products are actually being sold in the market under different trade marks; the plaintiff uses the mark ―Saffola‖ while the defendant uses the mark ―Sundrop‖. It cannot at this stage conclusively be said by merely looking at the sales revenue figures and the advertisements spend that on mentioning ―LOW ABSORB‖ the plaintiff's goods come to the mind of the consumers. There are no survey reports of the consumers or any other evidence which would even prima facie point to the fact that CS(OS) 1590-2009 Page 16 of 36 ―LOW ABSORB‖ has attained secondary distinctive meaning of a standard which has the ability to source the origin of the goods to the plaintiff. At times even consumer surveys are not persuasive evidence; much would depend on the sample chosen and the nature of the questions asked. In this respect even the averments made by the defendant in its application under Section 12A of the MRTP Act shed no light. For the purposes of convenience, the relevant averments made in paragraph 10 of the said application are extracted hereinbelow:

"The Analyzer Report of sale of Respondent No. 3 in the last three months shows increase in the sales of "New Sweekar" low absorb oil. It is also pertinent to point out that Respondent No. 3 has spent over Rs 2,43,00,000/- over the false, misleading and disparaging advertising campaign in respect of its "New Sweekar Oil" on various T.V. channels alone."

12. In my opinion, a use of the mark does not necessarily translate into the mark obtaining secondary distinctive meaning. [See Rich Products Corporation & Anr. vs Indo Nippon Food Ltd. CS(OS) 246/2004 dated 19.02.2010]. This is an issue which perhaps would more clearly come through at the stage of trial. In view of the aforesaid discussion, I am of the opinion that prima facie there is no case made out for infringement.

13. The last issue raised was with regard to the commission of tort of passing off by the defendant. Passing off, as is well known, is a tort of false representation calculated to damage the goodwill of the plaintiff. It is not necessary in an action for passing off for the plaintiff to prove that there was an intent on behalf of the defendant to deceive. The test is of likelihood of deception and not as to whether there was any intent to deceive. A perusal of the rival labels clearly demonstrate that except for the usage of the words ‗LOSORB TECHNOLOGYTM‖ (carried with the plaintiff's marks) and similarly, ―LOW ABSORB TECHNOLOGYTM‖ (shown in the defendant's mark) there is no commonality between the two. The colour scheme, the font, the trade dress and get up is completely different. The plaintiff's label mark has a picture of a heart, while that of the defendant CS(OS) 1590-2009 Page 17 of 36 carries a picture of a child in an acrobatic pose. Therefore, prima facie, in my opinion, there is no case even for passing off made out.

14. Let me deal with the cases cited by the learned counsel for the plaintiff during the course of oral arguments. Any further foray in this direction would increase the burden of the judgment.

14.1 Kaviraj Pandit Durga Dutt Sharma vs Navaratna Pharmaceutical Laboratories AIR 1965 SC 980. The brief facts of the case were that: the respondent before the Supreme Court carried on business in the name and style of Navratna Pharmaceutical Laboratories. Initially the business was started in the name of Navratna Pharmacy which was changed to Navratna Pharmaceutical Laboratories. Over a period of time the said respondent came to sell its medicinal products under the trade mark ―Navratna‖ and ―Navratna Pharmaceuticals Laboratories‖. The respondent obtained registration for its trade mark Navratna as well as that of Navratna Pharmaceutical Laboratories. The appellant, on the other hand, sold its products under the trade name Navratna Kalpa Pharmacy bearing the trade mark ―Navratna Kalpa‖. The appellant applied for registration of its trade mark Navratna Kalpa. This was opposed by the respondent on the ground that the Navratna was descriptive having no distinctiveness and hence, could not be registered. This objection of the respondent was upheld. The appellant's application for registration of the trade mark was refused. This refusal led to the various proceedings being filed, which ultimately culminated in two appeals being filed in the Supreme Court. The Supreme Court upheld the finding of the court of first instance, to the effect that the word Navratna was a common word in ayurvedic phraseology and consequently, the plaintiff could not claim an exclusive right to the use of the word by using it for products even though this had been sold for a number of years. The court, however, proceeded to confirm the injunction in favour of the plaintiff/respondent with respect to the trade mark Navratna Pharmaceutical Laboratories on the ground of a factual finding returned of plaintiff's user for an extensive period to an extent that the said mark came to be exclusively associated with the goods of the plaintiff/respondent. These being CS(OS) 1590-2009 Page 18 of 36 concurrent findings of fact on the issue of acquired distinctiveness the Supreme Court did not deem it fit to disturb the injunction granted. While adjudicating upon the appeals filed the court made some pertinent observations in paragraphs 28 and 29 at page 989 as to the intrinsic difference between an action for infringement of the registered trade mark and that of passing off. The learned counsel for the plaintiff while relying upon the judgment submitted that since it had a registration in its favour in respect of the mark ‗LOSORB' and ‗LO-SORB' the use of the defendant of the mark ‗LOW ABSORB' resulted in the infringement of its statutory right under Section 29 of the Trade Marks Act. The learned counsel for the plaintiff stressed upon the fact that since the essential features of the mark were similar both visually as well as phonetically, this court do not have to look further and injunction should automatically follow notwithstanding the difference in the get up and the packaging of the products manufactured by the defendant. In my opinion two aspects stand out in judgment. First, the refusal by the Supreme Court to overturn the finding of the court of first instance whereby, the plaintiff's claim of exclusivity in the word Navratna was rejected on ground that it was a common word in ayurvedic phraseology; and second, that it upheld the plaintiff's right in Navratna Pharmaceutical Laboratories on the basis of evidence of acquired distinctiveness; such is not the situation obtaining in the instant case.

14.2 Ruston and Hornby Ltd vs Zamindara Engineering Co. AIR 1970 SC 1649. Briefly this was a case where the appellant-company was a registered proprietor of the mark RUSTON. The said mark was used in relation to the internal combustion engines sold by it. On the other hand, the respondent, which was also in the business of manufacture and sale of diesel internal combustion engines, traded in the said goods under the trade mark ‗RUSTOM'. The Supreme Court once again reiterated the difference in the nature of an action for infringement of a trade mark and that which pertained to passing off. The point to be noted is that eventhough the Supreme Court in this case was dealing with the provisions of Trade Marks Act of 1940, the general principles enunciated vis-à-vis infringement and passing off action would apply. The CS(OS) 1590-2009 Page 19 of 36 observations of the Supreme Court in paragraphs 6, 7 & 8 being pertinent are extracted hereinbelow:

"6.The action for infringement is a statutory right. It is dependent upon the validity of the registration and subject to other restrictions laid down in Sections 30, 34 and 35 of the Act. On the other hand the gist of a passing off action is that A is not entitled to represent his goods as the goods of B but it is not necessary for to prove that A did this knowingly or with any intent to deceive. It is enough that the get-up of B's goods has become distinctive of them and that there is a probability of confusion between them and the goods of A. No case of actual deception nor any actual damage need be proved. At common law the action was not maintainable unless there had been fraud on A's part. In equity, however, Lord Cottenham L.C. in Millington v. Fox, (1838) 3 My & Cr. 338 held that it was immaterial whether the defendant had been fraudulent or not in using the plaintiff's trade mark and granted an injunction accordingly. The common law courts, however, adhered to their view that fraud was necessary until the Judicature Acts, by fusing law and equity, gave the equitable rule the victory over the common law rule.

7. The two actions, however, are closely similar in some respects. As was observed by the Master of the Rolls in Saville Perfumery Ltd. v. June Perfect Ltd. (1941) 58 R.P.C.147 at page 161.

The Statute law relating to infringement of trade marks is based on the same fundamental idea as the law relating to passing-off. But it differs from that law in two particulars, namely (1) it is concerned only with one method of passing-off, namely, the use of a trade mark, and (2) the statutory protection is absolute in the sense that once a mark is shown to offend, the user of it cannot escape by showing that by something outside the actual mark itself he has distinguished his goods from those of the registered proprietor. Accordingly, in considering the question of infringement the Courts have held, and it is now expressly provided by the Trade Marks Act, 1938, Section 4, that infringement takes place not merely by exact imitation but by the use of a mark so nearly resembling the registered mark as to be likely to deceive.

CS(OS) 1590-2009 Page 20 of 36 In an action for infringement where the defendant's trade mark is identical with the plaintiff's mark, the Court will not enquire whether the infringement is such as is likely to deceive or cause confusion. But where the alleged infringement consists of using not the exact mark on the Register, but something similar to it, the test of infringement is the same as in an action for passing off. In other words, the test as to likelihood of confusion or deception arising from similarity of marks is the same both in infringement and passing off actions. (emphasis is mine)

8. In the present case the High Court has found that there is a deceptive resemblance between the word "RUSTON" and the word "RUSTAM" and therefore the use of the bare word "RUSTAM" constituted infringement of the plaintiff's trade mark "RUSTON". The respondent has not brought an appeal against the judgment of the High Court on this point and it is, therefore, not open to him to challenge that finding. If the respondent's trade mark is deceptively similar to that of the appellant the fact that the word 'INDIA' is added to the respondent's trade mark is of no consequence and the appellant is entitled to succeed in its action for infringement of its trade mark." 14.3 In this case the Supreme Court granted the injunction in favour of the plaintiff and restrained the defendant from infringing the plaintiff's trade mark ‗RUSTON' from using it in connection with the engines, machinery and accessories manufactured and sold by it under the trade mark ‗RUSTAM' and ‗RUSTAM INDIA'. It was contended based on this judgment that based on the similarity of rival marks court could not look to features external to mark. In my view the judgment is distinguishable. It did not deal with a descriptive marks and the concomitant legal issues which arise in the instant, that is, validity and acquired distinctiveness etc.

14.4 B.K. Engineering Co. vs U.B.H.I. Enterprises AIR 1985 Del. 210. This was a case where the plaintiff had instituted an action for passing off against the defendants/respondents, who were carrying on business in Ludhiana. In the suit the plaintiff had claimed relief for permanent injunction, accounts and damages. Both, plaintiff and the defendants, were in the same line of business, that is, manufacturing CS(OS) 1590-2009 Page 21 of 36 cycle bells. The plaintiff had adopted the mark ‗B.K.' as their house mark. The plaintiff manufactured cycle bells under the trade mark ‗Crown' and ‗Venus'. The house mark ‗B.K.' was used conspicuously both on the cartons and in a circular device inscribed on the cycle bell itself. On the other hand the defendants were marketing their cycle bells under the trade mark ‗B.K.-81'. The Division Bench in paragraph 51 and 52 of its judgment cited with approval the observations in the case of Cadbury Schweppes Pty. Ltd vs Pub Squash Co. Ltd. (1981) 1 All. E.R. 213.

"The tort is no longer anchored, as in its early nineteenth century formulation, to the name or trade mark of a product or business. It is wide enough to encompass other descriptive material, such as slogans or visual images which radio, television or newspaper advertising campaigns can lead the market to associate with the plaintiff‟s product, provided always such descriptive material has become part of the goodwill of the product. And the test is whether the product has derived from the advertising a distinctive character which the market recognizes." (emphasis is mine) 14.5 Cadila Health Care Ltd. vs Cadila Pharmaceuticals ltd. 2001 PTC 300 (SC). Briefly this is a case where both the appellant and respondent were in the business of manufacturing pharmaceutical products. As a matter of fact both were part of the Cadila Group. Upon restructuring of the business the assets of the erstwhile Cadila Group were taken over both by the appellant and the respondent. The appellant had manufactured a drug under the trade mark/brand name ‗Falcigo' which contained Artesunate used for the treatment of cerebral malaria. Cerebral malaria is commonly known as ‗Falcipharum'. After obtaining the necessary permission from the Drugs Controller General (India) it commenced manufacture and sale of the said drug ‗Falcigo' across the world. The respondent, on the other hand, also obtained permission from the Drug Controller General (India) for treatment of falcipharum malaria. The respondent's drug contained ‗mefloquine hydrochloride'. The respondent's drug was sold under the trade mark ‗Falcitab'. In this background the appellant filed a suit against the respondent seeking injunction from using the trade mark ‗Falcitab' on the ground that the respondent's drugs CS(OS) 1590-2009 Page 22 of 36 were being passed off as those originating from the plaintiff. The court of first instance dismissed the appellant's application for interim injunction. The appeal to the High Court met with the same result. The Supreme Court did not interfere with the decisions of the court below and instead issued directions for expeditious disposal of the suit. In its judgment, however, the Supreme Court while giving its reason for not interfering also set out principles which are to be kept in mind by courts while dealing with an action for passing off especially when they relate to cases dealing with medicinal products. It is pertinent to note that Supreme Court in this case over-ruled its judgment in the case of S.M. Dyechem Ltd vs Cadbury (India) Ltd. (2000) 5 SCC 573 on the aspect with regard to the test to be applied in a passing off action while comparing similar marks to ascertain whether there is likelihood of deception or cause for confusion. The Supreme Court squarely rejected the conclusion in S.M. Dyechem (supra) that the test of dissimilarity in essential features have to be applied as against the test of similarity. The Supreme Court, however, accepted the principle enunciated in S.M. Dyechem (supra) that in trade mark cases, it was necessary to ascertain the comparable strength of case of either party apart from balance of convenience. The Court laid down the test for deciding the question of deceptive similarity in a passing off action of an unregistered trade mark. Since the test enunciated in the judgment were also relied upon by the learned counsel for the plaintiff, the same are extracted hereinbelow for the sake of convenience: (a) "The nature of the marks i.e., whether the marks are word marks or label marks or composite marks, i.e., both words and label works. (b) The degree of resembleness between the marks, phonetically similar and hence similar in idea.

(c) The nature of the goods in respect of which they are used as trade marks.

(d) The similarity in the nature, character and performance of the goods of the rival traders.

(e) The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods. CS(OS) 1590-2009 Page 23 of 36 (f) The mode of purchasing the goods or placing orders for the goods, and (g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks."

14.6 Once again there was no issue before the court involving a descriptive mark. The judgment in my view is distinguishable on facts.

14.7 Baume & Coy Ld. Vs Moore (A.H.) Ld. 1958 RPC 226. In this case the plaintiffs who were in appeal before the Court of Appeal had sought an injunction against the defendants seeking a restraint against infringement of their registered trade mark, and from passing off their goods (which were watches in this case) as those originating from the plaintiffs. The plaintiffs' trade mark consisted of the word ‗Baume' which was registered for watches and all other descriptions of horological instruments. The plaintiffs' predecessors in business had been carrying on the business of watches since 1834. The watches were manufactured for them by a firm in Switzerland and were imported into U.K. It was admitted by the defendants that since at least 1880 the plaintiffs' had been in the business of selling watches either directly or their predecessors under the trade mark ‗Baume'; that said business was substantial one and from many years substantial money had been expended on advertising. The defendant, on the other hand, carried on business of importing watches which they sold directly to wholesalers. In 1954 they had entered into an business arrangement with a Swiss company by the name of Baume & Mercier, Societe Anonyme, of Geneva. The plaintiffs in their action pleaded that use of the word ‗Baume' as part of the name of watches advertised, offered for sale and sold by the defendants constituted an infringement of plaintiff's registered mark, and was also calculated to deceive and cause confusion amongst the traders as well as public at large as to the origin of the goods. The Court of the first instance, while holding that there was sufficient similarity which might result in confusion in respect of sale of watches, dismissed the action of infringement on the ground that defendant was entitled to protection accorded under Section 8 of the Trade Marks Act, 1938; and in so far as plaintiffs' action for passing off is concerned the same was rejected on the ground CS(OS) 1590-2009 Page 24 of 36 that there had been honest user by the defendant of the ―maker's own name‖. The court of appeal while sustaining the order of the court below for dismissal of action for infringement granted injunction on the ground of passing off. In this context the following observations being relevant are extracted hereinbelow: "We first propose to consider first the issue of passing off. It is quite clear on the evidence, and indeed from the defendants' admission to which we have already referred, that the name "Baume" has, for many years past been associated in this country with the watches distributed by the plaintiffs. The questions on this part of the case would accordingly appear to be: (1) Have the plaintiffs established that the sale by the defendants of Baume & Mercier watches is reasonably calculated to cause confusion in the trade and in the minds of the public; and (2) if so, is it a valid defence for the defendants to show (as they did show to the learned judge's satisfaction) that there had been an honest use by them of the makers' own name?....

....We turn, therefore, to the question whether the evidence which was called before the learned judge was such as to justify the view that the acts of which the plaintiffs complain were likely to cause deception. This is essentially a question of fact. In Reddaway v. Banham, which was an action to restrain passing off, LORD HALSBURY, L.C., said (13 R.P.C. at p. 224): (emphasis is mine)

"My Lords, I believe that this case turns upon a question of fact. The question of law is so constantly mixed up with the various questions of fact which arise on an inquiry of the character in which your Lordships have been engaged, that it is sometimes difficult when examining former decisions to disentangle what is decided as fact, and what is laid down as a principle of law. For myself, I believe the principle of law may be very plainly stated, and that is that nobody has any right to represent his goods as the goods of somebody else.

How far the use of particular words, signs or pictures does or does not come up to the proposition which I have enunciated in each particular case, must always be a question of evidence, and the more simple the phraseology, the more like it is to a mere description of the article sold, the greater becomes the difficulty of proof, but, if the proof establishes the fact, the legal consequence appears to follow." (emphasis is mine)

CS(OS) 1590-2009 Page 25 of 36 14.8 The core issues were: whether use of the name ‗Baume' as part of trade name could be termed on facts a honest user; and, was the use likely to cause deception in the minds of the public. As noted by the court much would depend upon the evidence adduced. Importantly, it held that more simple the 'phraseology' which is a mere description of the article 'sold' the greater the difficulty of proof. A close scrutiny of the ratio would show that the observations made, do not further the cause of the plaintiff at least, at this stage.

14.9 Cadila Healthcare Ltd. vs Gujarat Co-operative Milk Marketing Federation Ltd. & Ors. FAO(OS) No. 62/2008 dated 08.09.2009. In this case the Division Bench of this court upheld the order of the learned Single Judge in the background of the following facts: The appellant had developed and launched in the market a product containing ‗Aspartame' an artificial sweetener. This product evidently is low in calorie and acts as a substitute for natural sugar. The appellant's product was sold under the brand name/trade mark ‗sugar free'. The appellant claimed that it had 74% market share in India in respect of what it claimed was a sugar substitute market. The respondent on the other hand adopted the trade mark ‗sugar free' in respect of frozen desserts. 14.10 To be noted this was a judgment cited both by the plaintiff as well as the defendant.

14.11 The learned counsel for the plaintiff relied upon the observations of the Division Bench which, while rejecting the appellant's claim for injunction observed as follows in paragraph 14 at page 44:

"However we make it clear that if any party enters into the domain of artificial sweeteners with the trademark „sugar free‟ the appellant may have a just cause in seeking restraint."

14.12 As against this, the defendants relied upon the observations of the Single Judge, which was cited with approval by the Division Bench in paragraph 4(h) which reads as follows:

CS(OS) 1590-2009 Page 26 of 36 "Mere descriptive distinction of a trademark by a trader, irrespective of acquisition of secondary meaning and distinctiveness in relation to trader/appellant‟s product cannot entitle the appellant to preclude others from using the said expression for the purposes of describing the characteristic features of their products. Thus, no blanket injunction can be granted against the respondent from using the expression „Sugar Free‟ only in the descriptive and not trademark sense particularly when the use of such an expression is widespread in relation to food and beverages. Thus, no embargo can be placed on the use of expression „Sugar Free‟ by the respondent particularly when the respondent had prima facie satisfied the court of its bonafide intention to use the said expression, not as a trademark but only in descriptive and laudatory sense." (emphasis is mine)

14.13 It may only be observed at this stage that the Division Bench made a pertinent observation with regard to the registration of marks which is a combination of popular English words in paragraph 9 of its judgment. These observations being relevant are extracted hereinbelow:

"9. We are unable to hold that the appellant‟s trademark „Sugar Free‟ is a coined word; at best it is a combination of two popular English Words. The mere fact that the appellant‟s product cannot be directly consumed or eaten and merely is an additive does not detract from the descriptive nature of the trade mark. Once a common phrase in the English language which directly describes the product is adopted by a business enterprise, such adoption naturally entails the risk that others in the field would also be entitled to use such phrases provided no attempt is made to ride on the band wagon of the appellant‟s indubitably market leading product „Sugar Free‟. In this connection, merely because the attributes of „Sugar Free‟ can be described by other phrases cannot detract from the common usage of the phrase „Sugar Free‟ as denoting products which do not contain sugar and any trader which adopts such mark in the market place, does so with the clear knowledge of the possibility of other traders also using the said mark. That is precisely the reason for the denial of protection to such marks by refusing registration as envisaged by Section 9, 30 and 35 of the Act......

Re: Marico Limited vs Agro Tech Foods Ltd - Low Absorb Case

....Thus, it is clear that the mark or indication which serves to designate the quality of the goods of the appellant, which indeed the phrase „Sugar Free‟ does, would be an absolute ground for refusal of registration of a mark unless CS(OS) 1590-2009 Page 27 of 36 it has acquired a distinctive character. The expression can at best be said distinctive qua the artificial sweetener of the appellant and mere starting of the marketing of the drink „Sugar Free D‟lite‟ cannot give the appellant the right to claim distinctiveness in the expression „Sugar Free‟ in relation to all the food products."

14.14 The emphasis of the learned counsel for the plaintiff that the result would have been different had the defendant been in the same line of business - misses in my view true ratio of the judgment. The observations of the Division Bench that if the rival producers were in the same line of business the plaintiff would have a ―just cause in seeking restraint‖ cannot be read to mean that such an order would invariably follow as matter of right without adverting to other aspects.

14.15 Picot ltd. vs Goya Ltd. (1967) RPC 573. This was a case where the plaintiffs were manufacturers of perfumes sold under the trade mark ‗Picot'. Each perfume was sold with a special name attached to it such as ‗Fiesta', ‗Pagan' and ‗Suede'. The defendants, on the other hand, sold their perfumes under the trade mark ‗Goya'. They advertised new kind of perfume which was named ‗Piquant'. The defendants applied for registration of the trade mark ‗Goya Piquant'. The plaintiffs filed an action and sought an interlocutory injunction to restrain the defendants from infringing their trade mark and from passing off their goods as those emanating from the plaintiffs. The plaintiffs contended before the Court that since their goods were sold through a limited number of chemists, members of the public who wanted the plaintiffs' product ‗Picot', might end up buying the defendants' product ‗Piquant'. The defendants, on the other hand, took the stand that ‗Piquant' was a descriptive word used in the perfume industry. The defendant claimed that the word was descriptive of a fragrance and hence, the plaintiff could not have monopoly to restrain its use by the defendants. In this context certain observations of the learned Judge are relevant, which were also relied upon by the learned counsel for the plaintiffs and hence, are extracted hereinbelow:

CS(OS) 1590-2009 Page 28 of 36 "Then it is contended by the defendants that the word "Piquant" or "Peekant" or "Peekont" is a descriptive word used in the trade as descriptive of a fragrance; and, on the evidence, I accept the latter part of the submission. The plaintiff company clearly cannot complain of a rival manufacturer of perfume describing their products as being piquant. Mr. Aldous on behalf of the defendants, however, goes further and submits that, the word "piquant" being a descriptive word, the plaintiffs can have no monopoly to restrain its use. Since "piquant," being a descriptive word, so the argument runs, could not be a trade name or trade mark, the plaintiffs cannot have a trade mark or a monopoly of which the use of the word "piquant" by another trader can be an infringement. While I accept the premise, I am not satisfied that the conclusion follows. The word PICOT is not a descriptive word in relation to perfumes, and, as I have said, is registered as the plaintiff's mark. Under the very terms of section 4 of the Trade Marks Act, 1938 that mark has to be infringed by the use of a mark so nearly resembling it as to be likely to deceive or cause confusion in the course of trade. If, then, the word PIQUANT is being used not in a descriptive sense but as a mark, and if PIQUANT so used so nearly resembles PICOT as to be likely to deceive or cause confusion, does the fact that it is a word which has hitherto been used in the trade as a descriptive word deprive the plaintiffs of statutory protection?

In view of the strenuous and sustained argument advanced by Mr. Aldous in support of the contention that that question ought to be answered in the affirmative, I should, I think, state shortly my conclusion upon it. In my judgment, if I use a descriptive word not as a description of the character or quality of the goods but as a mark, and that mark so nearly resembles the plaintiffs' mark as to be likely to deceive or cause confusion in the course of trade, there is an infringement, and, in my judgment, it matters not that the mark used by the defendants is one which, being a descriptive word, could not itself be the subject of protection....

....I have not forgotten the evidence of the representatives of the plaintiffs, who, on asking if PICOT perfume was stocked, were offered the defendants‟ product. They, of course, were not deceived; but, apart from this, and in the absence of authority, I should be most hesitant in accepting evidence regarding trap orders untested by cross-examination as a reasonably sure foundation on which to grant an interlocutory injunction. An authority has been called to my attention which clearly shows that evidence given by those responsible for trap orders is CS(OS) 1590-2009 Page 29 of 36 to be scanned with a special degree of severity, a process which, in relation to affidavit evidence, cannot, in the absence of cross-examination, be applied. Mr Aldous is entitled to point out that there is no evidence that any would-be purchaser of PICOT products has been misled into purchasing the defendants‟ article.

The plaintiffs have not, in my judgment, established a sufficiently strong prima facie case to make it equitable to grant the relief which is sought. " 14.16 To be noted firstly, the court rejected the plaintiffs' case for grant of injunction on the ground that they have not been able to produce evidence to establish that there was likelihood of deception or confusion. At the interlocutory stage the court was hesitant in accepting evidence which was in the nature of ―trap orders‖, and consequently untested in cross-examination. Secondly, in this case the plaintiff's mark ‗PICOT' was not descriptive unlike the facts obtaining in the present case. In this case the defendant's mark ‗PIQUANT‖ was claimed as being descriptive. Interlocutory injunction was refused on the ground of failure on the part of plaintiff to establish that the trade or customers were deceived. In my opinion, the judgment does not help the cause of plaintiff in the instant case.

14.17 Indian Shaving Products Ltd. & Anr. vs Gift Pack & Anr. IA Nos. 5333 & 6040 of 1998 in Suit No. 1293/1998 dated 09.11.1998. Briefly in this case the plaintiff was using the trade mark ‗Duracell', while the defendant was using mark ‗Ultra' along with its house mark ‗BPL'. A suit for injunction and passing off was filed. To be noted in this case, while the plaintiff had obtained registrations in countries across the world of its trade mark ‗Ultra' except in India where it was at the relevant point pending approval. The court on considering the material placed before it came to the conclusion that because of worldwide reputation of the plaintiff's mark ‗Ultra' and enormous sales revenue, the mark's reputation had transcended to India. In these circumstances, the court came to the conclusion that a case for injunction was made out. Importantly, the court observed that in view of the fact that the rival trade marks were identical (and not deceptively similar) the fact that the get up and the trade dress was different would not CS(OS) 1590-2009 Page 30 of 36 make any material difference to the conclusion that a prima facie of passing off was made out. The court amongst others relied upon the observations of the Division Bench in the case of B.K. Engineering (supra). On facts the case is distinguishable. 14.18 Association for Investment Management and Research and Anr. vs the Institute of Chartered Financial Analysis of India & Anr. 2006 (33) PTC 352 (Del). This was a case where the plaintiff was seeking restraint against the defendant from using the trade mark and/or service mark as also trade name CFA, Chartered Financial Analysis, The Institute of Chartered Financial Analysis of India, ICFA and ICFAI or any other mark which was deceptively similar to the said marks. In this case the court proceeded to grant an injunction in favour of the plaintiff and rejected the argument of the defendant's counsel that CFA was an abbreviated form of Chartered Financial Analysis which are commonly used words found in the English dictionary displaying no uniqueness. 14.19 Two crucial facts, according to me, which prevailed with the court in coming to this conclusion that the case for injunction was made out: first, while the defendant claimed that the marks were descriptive; contrary to its stand it was found to have itself, applied for registration of the mark CFA, and second, the defendants had been granted way back in 1985 a licence from one of the plaintiffs in the suit which subsequently was terminated.

14.19 Godfrey Philips India Ltd vs Girnar Food & Beverages (P) Ltd. (2004) 5 SCC

257. This was a case where the appellant had carried an appeal from an order of the Division Bench of the High Court which had reversed the injunction granted by the single Judge. The appellant/plaintiff in the said case sold tea under what it called its umbrella mark ‗City Tea'. The different teas sold by the appellant were traded under different marks, one such tea was sold under the mark ‗Super Cup'. This tea, according to the appellant, was an extra strong CTC tea. The appellant also claimed that it had been selling tea under the trade mark ‗Super Cup' for a considerable period of time, and had invested a large amount of money in advertising the mark. It also alleged that the CS(OS) 1590-2009 Page 31 of 36 respondent/defendant, who was also in tea business, had wrongfully used the words ‗Super Cup' in connection sale of its tea. An action for passing off was instituted against the respondent/defendant. The Supreme Court in appeal set aside the order of the Division Bench, and remanded the matter back to the Division Bench for a de novo hearing. While doing so, the Supreme Court reiterated the following well-known principle, that is, ―descriptive trade mark may be entitled to protection if it has assumed secondary meaning which identifies it with a particular product or as being from a particular source.‖ Since the Division Bench had reversed the order of the Single Judge apparently on the ground that ‗Super Cup' was descriptive and laudatory of the goods, it was remanded back for re-examination of the matter in the light of principle enunciated by the Supreme Court.

14.20 Madhuban Holiday Inn vs Holiday In Inc. 100 (2002) DLT 306 (DB). This was a case where the Division Bench of this court was called upon to adjudicate as to whether the plaintiff could use the trade mark ‗Holiday Inn' along with the prefix ‗madhuban' or ‗Kapoor'. The appellant before the court claimed that ‗Madhuban Holiday Inn' was descriptive of the business of hotel and hence, the plaintiff/respondent could not claim monopoly over the same. The court, however, on facts came to the conclusion that ‗Madhuban Holiday Inn' were not ‗dictionary words' they were ―coined‖ by the respondent/plaintiff and ―were descriptive of the business of the respondent/plaintiff‖. The court dismissed the appeal and affirmed the grant of injunction by the Single Judge. The Division Bench specifically found that the use of the word ‗Holiday Inn' by the appellant/defendants was ―ex facie fraudulent and malafide from the very inception‖. The plaintiff relies upon the judgment to contend that its mark ‗LOSORB' and ‗LO- SORB' are coined words. Whether by removing the alphabet ‗W' by itself would make it a coined or a fancy or an arbitrary mark is open to grave doubt. Assuming it were so, the defendant is perhaps entitled to say and more certainly so at the interlocutory stage, that its mark is descriptive of the character of the goods sold by it notwithstanding its attempt to treat as a trade mark. What is peculiar about this case is that the plaintiff also seeks CS(OS) 1590-2009 Page 32 of 36 protection of the mark ―LOW ABSORB‖ in respect of which it had made rather unsuccessful attempt at registration.

14.21 Mattel, Inc & Ors. vs Jayant Agarwalla & Ors. 2008 (38) PTC 416 (Del.). The plaintiffs in this case to sought an injunction against the defendants from using the mark ‗Scrabulous' in respect of a board game, which was being marketed by them for several decades under the trade mark ‗Scrabble'. To be noted in this case the learned Single Judge, while deciding the interlocutory application, rejected prima facie the plaintiff's claim for copyright. However, the plaintiff's case for injunction was sustained even though the word ‗Scrabble' was not descriptive of the word ―game‖ unlike ―monopoly‖ or ―crossword‖ -- on account of its extensive use and popularity which had resulted in the word being used to describe the game itself. The court took note of the fact that even the Oxford Dictionary referred the word ‗Scrabble' as a proprietary word game, and thus displaced its primary meaning. It is, in these circumstances, that the court came to the conclusion that a case for injunction had been made out since the plaintiffs had been able to establish distinctiveness, while the defendants could not furnish any explanation as to how they had come upon the mark ‗Scrabulous' in relation to the word game propagated by it. The court also took into account the fact that the defendant's mark ‗Scrabulous' was ‗phonetically' and ‗semantically' close to the plaintiff's mark. The case is once again distinguishable. In the present case there is a good explanation put forth by the defendant as to how and why they acquired the descriptor ―LOW ABSORB TECHNOLOGY‖ for their product. Their recourse to the PFA Act in this regard, at this stage, cannot be summarily rejected.

15. CONCLUSIONS: On a consideration of submissions and the judgments: (i) The court can at an interlocutory stage take a prima facie view as to the validity of a registered trade mark. This view can be taken based on averments made in the written statement/ pleadings. [See Lowenbrau AG (supra)]. The pleadings in this regard, as in CS(OS) 1590-2009 Page 33 of 36 every other case, has to be read ―meaningfully‖ (see Begum Sabiha Sultan vs Nawab Mohd. Mansur Ali Khan & Ors (2007) 4 SCC 343)

(ii) Some marks are inherently incapable of distinctiveness. [See Asian Paints Ltd (supra)]

(iii) The rights under Section 28 are subject to other provisions of the Trade mark Act. Also the registered proprietor or the permitted user can exercise his rights if the registered mark ‗is valid'.

(iv) A descriptive mark can be registered provided it has acquired secondary meaning [See Girnar (supra)]

(v) If a descriptive mark is one, which is, essentially a combination of common English words the user of the marks has to bear the risk of, some amount of confusion. No monopoly can be claimed by the user of the mark. [See Cadila Health Care (supra) & J.R. Kapoor (supra)]

(vi) The mark can be impugned both at the stage of registration and post registration. See provisions of Section 9(1)(a) to (c) of the Trade Marks Act for challenge at time of registration and Section 30 and 35 for challenge after registration. (vii) If the registered mark and the rival mark are not identical; in other words the two marks are similar then the same test as in the case of passing off is applicable; which is, is there a likelihood of deception or cause for confusion. [See Ruston and Hornby Ltd (supra)]

16. In view of the discussion above in my opinion the use of the expression by the defendant ―LOW ABSORB‖ or ―LOW ABSORB TECHNOLOGY‖ cannot be injuncted at this stage, since they are descriptive of the character or the quality of the defendant's goods unlike a trade mark which identifies the origin. . This defence is available even against registered mark under Sections 30(2)(a) and 35 of the Trade Marks Act. In the CS(OS) 1590-2009 Page 34 of 36 very least, this defence cannot be ruled out at the interlocutory stage. The use by the defendant cannot be said to be not bonafide since not only does it contain the additive which reduces oil absorption by food stuffs during the process of frying but the PFA Rules also recognize such an eventuality.

17. The fact that the abbreviation ‗TM' appears alongside the expression ―With Low Absorb Technology‖ can at best be categorized as fond hope of the defendant that over a period of time it would gain trade mark significance. It is not the case of the plaintiff that the expression does not appear with defendant's registered mark ―Sundrop‖. The defendant's trade mark is undoubtedly ―Sundrop‖. This apart, having held that the marks ‗LOW ABSORB‖, ‗LOSORB' and ‗LO-SORB' are prima facie descriptive with no demonstrable acquired secondary distinctiveness; given the fact that there being no invoices or advertisements filed which carry only the mark ‗LOW ABSORB', ―LOSORB‖, ―LOW ABSORB TECHNOLOGY‖ or ―LO-SORB‖; and the plaintiff and defendant use the said marks alongwith their respective registered marks ―Sweekar‖/―Saffola Gold‖ and ―Sundrop‖ the defendant can make no gain by such an act. What is ―sauce for the goose‖ is also ―sauce for the gander‖. In my view, prima facie none can monopolise the mark ―LOW ABSORB‖. To test the validity of this argument, I had put it to Mr V.P. Singh whether they would remove the abbreviation ‗TM' used alongside its descriptor with ―LOW ABSORB TECHNOLOGY‖. The learned senior counsel answered in the affirmative. I intend to hold the defendant to the statement made in court.

18. I may also point out that the limiting factor of ―bonafide use‖ in a defence raised under Section 35 is not found in Section 30(2)(a) of the Trade Mark Act. In this case though I have dealt with the issue of bonafide use. Since the rival marks in any event are similar and not identical the plaintiff, at least at this stage, has not been able to advert to any evidence which would persuade me to hold that there is likelihood of deception or cause for confusion in minds of those in trade or prospective customers. As observed CS(OS) 1590-2009 Page 35 of 36 above, the trade dress and get up are entirely dissimilar. Therefore, in my opinion, the plaintiff has failed to make out at the interlocutory stage a case for either infringement or passing off.

19. What has strengthened my resolve in this case to refuse confirmation of ad- interim ex parte order, is the non-disclosure of the fact that the plaintiff had filed an application for registration of the mark ―LOW ABSORB‖ which was withdrawn. In the course of argument neither any explanation was furnished nor was any material placed on record to delineate the circumstances which led to the application being withdrawn.

20. For the reasons given above, order dated 28.08.2009 is vacated. Consequently, IA No. 11538/2009 filed by the defendant is allowed and that of plaintiff being IA No. 11037/2009 is dismissed. The defendant shall, however, remove, as contended, the abbreviation T.M. alongside its descriptor ―with low-absorb technology‖. RAJIV SHAKDHER, J

APRIL 23, 2010

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