Appeal From Order No.5 of 1996,Civil Application No.6 of 1996

29th November, 1996

Petitioner Counsel: Shri U. S. KOLWALKAR
Respondent Counsel: Shri V. V. TULZAPURKAR ,R. G. SHETH Mr. S. M. USGAONCAR

Cases Cited:
1990 (Supp) SCC 727 [Para 7]
AIR 1965 Bom 35 [Para 7]
1988 (1) Patent L.R. 135 [Para 7]
(Patents) 789 (Suppl) Dt.21-12-1910 [Para 7]
Patent, Design And Trade Mark Cases 251 [Para 7]
AIR 1960 SC 980 [Para 8]
AIR 1992 Bom 195 [Para 8]
AIR 1967 Goa, Daman & Diu 149 [Para 13]
AIR 1956 Bhopal 49 [Para 13]
AIR 1965 SC 980 [Para 14]
1980 RPC 31 [Para 15]

JUDGMENT

JUDGMENT :- The appellant firm claims to be carrying on business as a small scale industry manufacturing and marketing ice cream, frozen foods and like products since 1980. The Trade mark used by the appellant firm is 'Yummy'. In the year 1988 the appellant firm decided to manufacture stick ice cream product coated with chocolate and nuts and applied for trade mark 'Treat' for the said purpose, but the Registrar of Trade Marks, Bombay informed the appellant firm that the said mark 'Treat' was not available for registration. The appellant firm had also applied for registration of mark 'Feast' and by letter dated 23.8.1988 Registrar of Trade Marks, Bombay had informed them that the trade mark Feast was available for registration. Likewise, the appellant firm had also applied for registration of trade mark 'Choco Feast' and the Registrar of Trade Marks, Bombay informed about the availability of the said trade mark. Thereafter, advertisements in Trade Mark Journals were published prior to the acceptance of the trade marks applied for by the appellant. The appellant launched the product stick ice cream under the mark 'Feast' in the year 1990 in the State of Goa and parts of Maharashtra and Karnataka. In February, 1994 appellant learnt that the respondent no.1 was contemplating manufacture of ice cream under the trade mark 'Feast' and the appellant sent a notice to the respondent no.1 to desist from doing so. On 29.11.94 there was an advertisement in Navhind Times that respondents no.1 and 2 proposed to introduce ice cream/frozen desserts in Goa. On 12.12.94 there was an advertisement in Navhind Times that respondent no.3 had been appointed sole agent for Goa for the ice cream of respondents no.1 and 2. On 17.12.94 the appellant instituted a suit against the respondents for permanent injunction to restrain them from in any manner manufacturing/marketing, advertising and selling ice cream/frozen desserts under the trade mark 'Feast' and/or Choco Feast or any other mark or name which is identical to and/or deceptively similar or so resembling to and/or deceptively similar and so resembling the plaintiffs marks Feast and/or Choco Feast thereby violating plaintiffs common law rights in the trade marks Feast and Choco Feast. Relief relating to likely infringement of the statutory right to be conferred upon the appellant on registration of trade mark was also sought. The appellant also sought restraint on the defendants, its Directors, partners, servants, agents, dealers and distributors from in any manner offering any services, advertising any service particularly ice cream/frozen desserts, parlour services with reference to the product Feast and Choco Feast or identical or deceptively similar or so resembling the said products. The appellant also moved an application for temporary injunction but, the only prayer in relation to temporary injunction which was pressed into service by the appellant was relating to passing of action. The appellant had contended that the sale of ice cream under the said two marks had gone up from Rs.2,13,000/- in 1989-90 to Rs.6,35,000/- in 1993-94; that the ice cream under the said two marks had acquired unique and enviable reputation as well as exclusive goodwill resulting in acquisition of valuable common law right which was being infringed by the respondents by using the same mark 'Feast' which would lead to confusion and deception amongst the trade circle as well as customers.

2. Defendant no.1 claims to be a subsidiary Company of Unilever PLC; that Unilever PLC is well reputed universal Company having its branches all over the world and is ranked as twenty first largest international Company in the world; that Unilever PLC is the proprietor of several Trade Marks including Walls and Feast in several countries in respect of ice cream/frozen desserts; that the goodwill and reputation enjoyed by Unilever PLC in trade marks Walls and Feast have spilled over in India; the mark Feast has always been associated with Unilever PLC much before the plaintiff adopted the mark Choco Feast; that it is the plaintiff who had copied the Unilever's mark and tried to encash upon the universal reputation of Unilever PLC; that the trade marks Walls and Feast have been registered in a number of countries in the name of Unilever PLC; that Unilever PLC had entered into an agreement with defendant no.1 in order to enable defendant no.1 to manufacture and sell frozen desserts under various trade marks including Walls and Feast; that defendant no.1 started manufacturing frozen desserts under the trade marks Walls and Feast somewhere in India 1994 and had already crossed a figure of Rs.2.39 crores of sales within 8 months period from May to December, 1994; that the goods sold by the plaintiff under the trade mark Yummy Chocofeast are substantially inferior to the quality of the defendants' products; that till the trade marks are registered the plaintiff cannot seek relief on the basis of infringement; that the marks used are not similar and there is no likelihood of confusion or deception being caused among trade circles or public; that the two products are distguishable; that what the plaintiff is selling is ice cream and what is being sold by defendant no.1 is frozen desserts. It has been stated before me that defendant no.1 is not using the mark Choco Feast but their product is under the mark Feast only.

3. It is not necessary to set up the case put up by defendant no.2 as it is submitted before me that defendant no.2 has nothing to do with the controversy in the suit.

4. The trial Court by the impugned order dated 15th June, 1995 dismissed the temporary injunction application which is subject matter of challenge in this appeal. The trial Court had basically given findings on three aspects namely: (1) that the registration of the mark Feast by Unilever PLC was even prior to the application filed by the plaintiff to ascertain the availability of the said mark; (2) the reputation of the product Feast of Unilever PLC had already travelled within the Indian borders; and (3) that on account of the difference in the two products there was no likelihood of deception in passing of the product by defendant no.1.

5. Learned Advocate Shri U. S. Kolwalkar first urged that the manufacture of ice cream is exclusively reserved for the small scale sector and in this connection he drew my attention to Schedule III, Item 1 of the Gazette Notification dated 25th July, 1991 published in the Gazette of India - Extraordinary Part II, Section 3 sub-section (ii) dated 25th July, 1991. His contention is that defendant no.1 is a multinational company and, as such, in terms of the said Notification it cannot manufacture ice cream since manufacture of the said product has been reserved only for the small scale sector. Though, there was some reference to this aspect in the plaint, yet, this point was not urged before the trial court and it is being urged for the first time before this Court.

6. The other contentions advanced by learned Advocate Shri Kolwalkar are similar to the ones which were advanced before the trial Court which did not find favour with the trial court. The main attack was on the ground of passing off action relating to misrepresentation made by persons in the course of trade to prospective customers and such misrepresentation was likely to injure the goodwill of the plaintiff. He, however, admitted that there has been no registration of the trade marks in favour of the plaintiff as yet in respect of Feast or Choco Feast, but his contention is that the appellant had already acquired goodwill for the said products and the products were launched in the market much prior to the products being marketed by defendant no.1. He also submitted that there is nothing to show that Unilever PLC has registered trade mark in respect of Feast and Choco Feast, but this contention of learned Advocate Shri Kolwalkar is contrary to the record since the record shows that trade marks Walls Feast or Feast had been registered abroad in many countries in favour of Unilever PLC.

29th November, 1996.

7. Learned Advocate Shri Tulzapurkar has submitted before me that in view of the principles laid down by the Apex Court in Wander Ltd. and another Vs. Antox India P. Ltd. (1990 (Supp) Supreme Court Cases, 727), no case at all has been made out by the appellant for interference in the discretion exercised by the trial court in refusing to grant temporary injunction in the facts and circumstances of this case. His next contention is that the mark Choco Feast/Feast has not yet been registered in favour of the appellant and the case of the appellant at this stage has to be examined only with reference to passing of action. In this connection my attention has been drawn to the various provisions under the Trade and Merchandise Marks Act, 1958 (hereinafter called the said Act) including Sections 9, 18, 27(2), 28, 29(2) and 105(c). According to Shri Tulzapurkar the parent Company namely Unilever PLC of respondents no.1 and 2 had already obtained trade mark 'Feast' much prior to the appellant in a number of countries abroad and the reputation of the said product had already started filtering into India; that the concept of Trans-border reputation has already been accepted by the Bombay High Court in Consolidated Foods Corporation Vs. Brandon and Co. Private Ltd. (A.I.R. 1965 Bombay, 35) and in Kamal Trading Co and others Vs. Gillette U.K. Limited (1988 (1) Patent Law Reports, 135); that it is the appellant who is trying to take advantage by using the said mark 'Feast' and in the circumstances the use of mark 'Feast' by defendant no.1 cannot in any manner be said to be dishonest. He further submitted that defendant no.1 or defendant no.2 are not using the mark 'Choco Feast' at all and as such there was no question of granting any relief in that respect. He pointed out that in passing off action no person is entitled to represent by use of a mark that his goods are the goods of somebody else. He also pointed out that in view of the distinctive mark, colour of wrapper and the fact that the product marketed by defendant no.1 was frozen dessert, it cannot be said that there was any probability that the product of defendant no.1 would be passed on as product of the appellant. In this connection, he cited two rulings, namely one of judicial committee of the Privy Council in Standard Ideal Company Vs. Standard Sanitary Manufacturing Company (The Illustrated Official Journal, (Patents), 789 (Supplement) dated Dec.21, 1910 (Reports of Patent, Design, and Trade Mark Cases) as well as Countess housewares Limited Vs. Addis Limited of the High Court of Justice - Chancery Division in 1964 Reports of Patent, Design and Trade Mark Cases, 251.

8. The next submission made by learned Advocate Shri Tulzapurkar is that the product was launched by the appellant in the year 1990 and it cannot be said that the appellant has acquired any distinctive mark qua his product. In this connection, it is further urged that the mark used by the appellant is 'Feast' which is an ordinary dictionary word and it may be even difficult for the appellant or for that matter even defendant no.1 to get registration of the mark 'Feast' under the said Act. He also pointed out the distinction in a case of passing off action and infringement of trade mark and in this connection reliance was placed by him in State of Bombay Vs. Supreme General Films Exchange Ltd. (A.I.R. 1960 S.C. 980) and Hindustan Lever Limited, Bombay Vs. Nirma Private Limited (A.I.R. 1992 Bombay, 195). It was emphasised by him that incorporation of additional material may be a good defence in a passing off action if the goods in question are clearly distinguished as defendants' goods by reason of incorporation of additional material on the impugned mark, but not an answer to a statutory action alleging infringement.

9. On the question of balance of convenience, it was urged that in the circumstances adoption of the appellant's mark cannot be prima facie treated to be honest; that mark 'Feast' was being used by the parent Company of respondents no.1 and 2 much prior to the appellant; that the product of respondent no.1 is expensive as compared to the product of the appellant and no one is going to purchase an expensive product; that the product of the defendant no.1 and the turnover of defendant no.1 shows that defendant no.1 has already acquitted reputation in the mark within a short span of its product being marketed.

10. On the issue raised by learned Advocate Shri Kolwalkar that ice cream cannot be manufactured by multi-national company and manufacturing of ice cream is reserved for small scale sector, it is contended that the product of defendant no.1 is not ice cream but frozen dessert which does not contain milk but it contains vegetable oil and other ingredients. He also pointed out that this issue was never raised by the appellant before the trial Court though some reference on this aspect is found in para 1 of the plaint wherein the appellant firm itself makes a distinction between ice cream and frozen dessert; that at any rate this issue will have to be decided after the evidence is recorded and that in the meantime if there is any violation on this score the appellant is free to seek his remedy before the appropriate authority.

11. In view of the above submissions, it is urged by learned Advocate Shri Tulzapurkar that the appeal is liable to be dismissed.

12. Before dealing with the merits of the case, it is necessary to refer to the judgment of the Apex Court in Wander Ltd. and another Vs. Antox India P. Ltd. (supra) wherein principles relating to interference in such matters have been laid down. The Apex Court has laid down therein that the appellate court will not interfere in the exercise of discretion of the court in the first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily or capriciously or where the court had ignored settled principles of law regulating grant or refusal of interlocutory injunctions. It is pertinent to note that the Apex Court has in clear terms observed therein that an appeal against exercise of discretion is said to be an appeal on principle and appellate court will not re-assess the material and seek to reach a conclusion different from the one reached by the court below solely on the ground that if it had considered the matter at the trial stage it would have come to a different conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner, the fact that the appellate court would have taken a different view may not justify interference with the trial Court's exercise of discretion.

13. I may also refer to a Full Bench ruling of the Judicial Commissioner's Court in Carlota Analia Vidinha Fernandes Vs. Soma Surla Calangutcar (A.I.R. 1967 Goa, Daman and Diu, 149) where it has been laid down that the grant of interim relief is always in the discretion of the trial court, though, undoubtedly, that discretion is to be exercised in accordance with well established judicial principles and not in a capricious or arbitrary manner. Following the ruling of the Judicial Commissioner's Court in State Transport Authority, Bhopal Vs. Sehore Asnta Joint Motor Service (A.I.R. 1956 Bhopal, 49) it was pointed out by the Full Bench of the Judicial Commissioner's Court Goa, Daman and Diu that when an appeal has been lodged against an interim order of the trial court that appeal would be treated more like a revision (emphasis added). Keeping the above mentioned principles in view, I shall now examine the matter on merits.

14. The entire controversy in this appeal centers around passing off action since admittedly mark 'Feast/Choco Feast' has not yet been registered under the said Act even though both the parties have applied for the said trade mark Feast. If the trade mark had been registered, the considerations to be taken into account would be different as compared to passing off action. An action for passing off is a common law remedy, being in substance an action for deceit that is passing off by a person of his own goods as that of another. The difference between action for passing off and action for infringement of trade mark has been illustrated by the Apex Court in Kaviraj Pandit Durga Dutt Sharma Vs. Navaratna Pharmaceutical Laboratories (A.I.R. 1965 S.C., 980) in paragraph (28) and it is necessary that the said observations of the Apex Court be recorded verbatim :-

"(28) The other ground of objection that the findings are inconsistent really proceeds on an error in appreciating the basic differences between the causes of action and right to relief in suits for passing off and for infringement of a registered trade mark and in equating the essentials of a passing off action with those in respect of an action complaining of an infringement of a registered trade mark. We have already pointed out that the suit by the respondent complained both of an invasion of a statutory right under S.21 in respect of a registered trade mark and also of a passing off by the use of the same mark. The finding in favour of the appellant to which the learned Counsel drew our attention was based upon dissimilarity of the packing in which the goods of the two parties were vended; the difference in the physical appearance of the two packets by reason of the variation in their colour and other features and their general get-up together with the circumstance that the name and address of the manufactory of the appellant was prominently displayed on his packets and these features were all set out for negativing the respondent's claim that the appellant had passed off his goods as those of the respondent. These matters which are of the essence of the cause of action for relief on the ground of passing off play but a limited role in an action for infringement of a registered trade mark by the registered proprietor who has a statutory right to that mark and who has a statutory remedy in the event of the use by another of that mark or a colourable imitation thereof. While an action for passing off is a Common Law remedy being in substance an action for deceit, that is, a passing off by a person of his own goods as those of another, that is not the gist of an action for infringement. The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of "the exclusive right to the use of the trade mark in relation to those goods" (Vide S.21 of the Act). The use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement. No doubt, where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a colourable imitation of a trade mark in a passing off action would also be such in an action of infringement of the same trade mark. But there the correspondence between the two cases. In an action for infringement, the plaintiff must, no doubt, make out that the use of the defendant's mark is likely to deceive, but where the similarity between the plaintiff's and the defendant's mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further, evidence is required to establish that the plaintiff's rights are violated. Expressed in another way, if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get-up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences, or indicate clearly a trade origin different from that of the registered proprietor of the mark would be immaterial; whereas in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff."

15. Section 27 of the said Act lays down that no person shall be entitled to institute any proceeding to prevent or to recover damages for the infringement of an unregistered trade mark. However, under the said section action can still be brought against any person for passing of goods as goods of another person. Section 105(c) provides that a suit can be instituted before the District Court for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered. Lord Diplock in Erven Warnink Vs. Townend (1980 R.P.C. 31) has laid down essential characteristics which must be present for a valid cause of action for passing of as :- (i) misrepresentation made by a person in course of trade; (ii) such misrepresentation should be to prospective customers or ultimate consumers of goods; (iii) it should be calculated to injure the business or goodwill of another trader; and (iv) it actually caused damage to the business or goodwill of a trader or well probably do so.

16. Admitted facts of the case as brought about by pleadings of the respective parties are that ice cream under mark 'Choco Feast' was introduced into the market by the appellant in the year 1990 and defendant no.1 introduced the product frozen dessert under mark 'Walls Feast' somewhere in the year 1994. As I have already pointed out that both the parties have applied for registration of the said mark 'Feast', but the same has not been registered under the said Act in favour of any of the parties so far. The contention of the appellant is that the said product was marketed for the first time under the mark 'Feast' by the appellant first and as such defendant no.1 cannot pass off his product under the same mark "Feast" and take advantage of the goodwill already created by appellant for the said mark Feast in India. On the other hand, the case of defendant no.1 is that defendant no.1 firm is a subsidiary of Unilever PLC, which enjoys the trade mark 'Walls' and 'Feast' in a number of countries abroad and the said mark has been registered in favour of the parent company Unilever PLC in many countries abroad. It is also the contention of learned Advocate Shri Tulzapurkar that mark 'Feast' has always been associated with Unilever PLC much before the appellant started using the said mark Feast and that in fact it is appellant who has copied the said mark and defendant no.1 has been using the said mark honestly. Shri Tulzapurkar had referred to principle of Transborder reputation which has been acknowledged by the Bombay High Court in the two rulings which have already been noted supra. Some affidavits have been filed by defendant no.1 that the product under mark 'Feast' of parent company Unilever PLC has acquired distinctiveness and is associated with Unilever PLC, but no such distinctiveness has yet been acquired by the appellant. Under these circumstances, the trial Court had rejected the argument of the appellant in connection with the launching of the product under mark Feast in India first, though it was observed by the trial court that if the geographical boundaries of India alone are taken into account, the mark 'Feast' was taken by the appellant first in point of time. On account of the principle of Transborder reputation, the mark Feast had been used first by Unilever PLC parent Company of defendant no.1. In the facts and circumstances, I do not find that the conclusion arrived at by the trial Judge on this aspect can be said to be either perverse or capricious or suffering from the vice of arbitrariness.

17. Moreover, there is considerable substance in the submission of learned Advocate Shri Tulzapurkar that the mark Feast is an ordinary dictionary word and it may be rather difficult for any of the parties to get the said mark registered under the said Act. In this connection reference was made by learned Advocate Shri Tulzapurkar to the views of Lord Macnaghten in Standard Ideal Company Vs. Standard Sanitary Manufacturing Company (supra). Therein the use of mark 'Standard' was the center of controversy and it was pointed out that the word 'Standard' is a common English word and the said word was being used to convey that the goods in connection with which it was used was high class or superior quality or acknowledged merit. It was also pointed out that the evidence fell far short of establishing that the word 'Standard' had acquired secondary significance, and so means, as applied to articles of toilet use, goods manufactured by the Plaintiff Company. It was further pointed that distinctiveness is the very essence of the trade mark and the plaintiff Company therein was not entitled to register the word "Standard" as trade mark.

18. In the case under consideration, on the basis of material on record, it cannot be said that the product launched by the appellant under mark Feast had acquired such distinctiveness that it had to be at once associated with the appellant alone and with none else. Thus, in order to obtain relief the appellant company had to prima facie establish that the disputed mark had become by user distinctive of plaintiff's goods so that the use in relation to any goods of the kind dealt with by the appellant of that mark would be understood by trade and public as meaning that the goods were of the appellant. Prima facie, on the basis of material on record no such conclusion at this stage can be arrived at in favour of the appellant.

19. It now remains to be determined whether there is a probability of the product of defendant no.1 being passed on to the consumers as product of the appellant. In other words, it must be prima facie established that the mark adopted by respondent no.1 is calculated to deceive or to lead the customers to believe that they are buying the goods of the appellant company. The probability factor plays an important role in this respect.

19.A. The two products namely that of the appellant and respondent no.1 are prima facie clearly distinguishable on account of a number of distinguishable features which are:-

(i) The product of the appellant is enclosed in a small carton of rectangular shape and the said carton is of thin cardboard paper;

(ii) the colour of the carton is beige; whereas the product of the respondent no.1 is wrapped in a wrapper of thin paper which is dark blue in colour;

(iii) what is prominent on the wrapper of the product of the respondent no.1 is that it is Walls Feast; whereas on the carton of the appellant it is prominently displayed 'Yummy Feast';

(iv) the product of the appellant is stated to be ice cream, whereas the product of the respondent no.1 is said to be frozen dessert.

20. The controversy relating to ice cream and frozen dessert would, of course, be decided after the evidence is brought on record in the suit. However, it is pertinent to note at this stage that in para 1 of the plaint itself the appellant has made a distinction between ice cream and frozen dessert.

21. It has been pointed out by learned Single Judge of Bombay High Court in Hindustan Lever Limited, Bombay Vs. Nirma Private Limited, Ahmedabad (supra) that incorporation of 'additional material' may be a good defence in a passing off action if the goods in question are clearly distinguished as defendant's goods by reason of incorporation of additional material on the impugned mark, but not an answer to a statutory action alleging infringement.

22. In view of the above and distinctive features already noted above, there does not appear to be any probability that the product of the respondent no.1 would pass off as product of the appellant. In the case of Countess Housewares Limited Vs. Addis Limited (supra) there was a controversy of the use of mark 'Shampoomatic' which was not registered as a trade mark. Taking into consideration the distinctiveness of the products, it was pointed out therein that the two devices were sufficiently different in appearance for there to be little likelihood of confusion based on visual similarity. The argument relating to probability of deception and confusion raised therein was rejected and it was held that in the absence of evidence of confusion, it was not a case which justified grant of interlocutory injunction.

23. The issue relating to reservation of manufacture of ice cream in the small scale sector though taken in the plaint, was never pressed before the trial Court. In fact, the controversy as to whether respondent no.1's product is frozen dessert can only be looked into after proper material is placed on record by the parties in the course of evidence and it is too premature at this stage to come to any conclusion in this respect. The argument advanced by learned Advocate Shri Kolwalkar in this respect in the appeal, therefore, does not help the appellant at this stage. The balance of convenience as pointed out by learned Advocate Shri Tulzapurkar also appears to be in favour of the respondents at this stage.

24. I would like to make it clear that the observations made above are prima facie conclusions and the lower court while deciding the matter on merits and the registering authority under the said Act with whom the registration of mark Feast is pending for registration, shall not in any manner be influenced by the observations made in this order and the Court said authority shall come to their independent conclusions irrespective of the observations made in this order.

25. For the aforesaid reasons, I do not find any merit in this appeal and the appeal is hereby dismissed. In the facts and circumstances, I will leave the parties to bear the costs.

Appeal dismissed.