Notice of Motion No. 2936 of 1998,Suit No. 3810 of 1998

9th October, 2000

Petitioner Counsel: Mr. VIRENDRA TULZAPURKAR, M/s. WADIA GHANDHY
Respondent Counsel: Mr.MILIND VASUDEO , Ms. PRIYA RANADE , Mr. YOGESH CHAWALA, M/s. JOY LEGAL CONSULTANTS

Cases Cited:
M/s. S.M.Dyechem Ltd. vs. M/s.Cadbury (India) Ltd., JT 2000(7) SC 151
Payton & Co. vs. Snelling Lampard & Co., (1990) 17 RPC 48 [Para 5]
N.S.Thread & Co. vs. Chadwick & Bros, AIR 1948 Mad.481 [Para 5]
McCain International Ltd. vs. Country Fair Foods Ltd, 1981 R.P.C. [Para 5]
Frank Reddaway & Frank Reddaway & Co.Ltd. vs. George Banham & George, Banham & Co.Ltd. 1896 A.C. 199 [Para 5]
Cellular Clothing Company Ltd. vs. Maxton & Murray, 1899 A.C. 326 [Para 6]
American Cyanamid Co. vs. Ethicon Ltd., 1975 (1) All E.R. 504 HL [Para 8]
Colgate Palmolive (India) Ltd. vs. Hindustan Lever Ltd., 1999(7) SCC 1 [Para 8]

JUDGMENT

JUDGMENT :- This is a Notice of Motion taken out by the Plaintiffs against the Defendants. It is the case of the Plaintiffs that they manufacture and/or market desalination plants under the trade mark "DISK TUBE". The Plaintiffs was incorporated in 1992 and commenced business of manufacturing and marketing plants for desalination and purification of water since October, 1992 and since then has been continuously carrying on the said business. Plaintiffs have been selling their products under trade marks DT DISK TUBE commonly abbreviated to DT MODULE since 1992 on an extensive scale. The Plaintiffs have applied for registration of trade marks DT, DT DISK TUBE and DISK TUBE in Class 7 of the Fourth Schedule to the Trade and Merchandise Marks Act, 1958. The said applications are pending. It is the case of the Plaintiffs that though they have applied for registration of the mark DISK TUBE, they are also marketing goods under the mark "DISK TUBE". Plaintiffs have annexed various documents to the Plaint and have also relied on an affidavits to contend that the affiants associate the mark DT DISK TUBE with the Plaintiffs. Six such affidavits have been filed. The Plaintiffs have also filed a statement showing their sales turnover as also the advertisements expenses incurred by them. It is the case of the Plaintiffs that an advertisement appeared in 1998 which was published in the Coast Guard Brochure on the occasion of Coast Guard Day, wherein the Defendants have offered to supply "DISK & TUBE" desalination plants. From the said advertisement, the Plaintiffs came to learn for the first time that the Defendants have adopted the trade mark DISK & TUBE which is deceptively similar to the Plaintiffs' trade mark. It is contended that the Defendants have used the mark DISK & TUBE in the manner caused to injure the Plaintiffs' reputation in their business and profession. By reason of deception and confusion likely to be caused by use of the impugned mark, the Plaintiff's goodwill and reputation will suffer. It is contended that Defendants in law were bound to select a trade mark which is not calculated to injure the reputation of the Plaintiffs. The Plaintiffs have filed an additional affidavit of their Managing Director on 6th October, 1998. In the said affidavit they have reproduced extracts from the presentation made by the Defendants, on or about 10th April, 1997 at the seminar organized by the Defendants for the Coast Guard and Indian Navy Personnel on their Reverse Osmosis Theory and Practice. There is no need to reproduce what has been set out therein.

It is pointed out on behalf of the Plaintiffs, that even if it is assumed that the expression DISK TUBE was descriptive, nonetheless by constant user it has become distinctive and it is the Plaintiffs alone who were entitled to use of the same. Plaintiffs have relied on various Judgments which will be referred to hereinafter.

2. On behalf of the Defendants, an affidavit has been filed by their Director Nazir H. Bandukawala. It is contended that the entire exercise is malafide. The Defendants had fit for a contract floated by Coast Guard. The injunction was taken behind their back to prevent them from making their bid. It is pointed out that thereafter they moved this Court against the exparte order which was granted on 10th September, 1998. On 9th October, 1998 this Court was pleased to clarify that the ad-interim order dated 10th September, 1998 does not prohibit the Defendants from claiming in the meeting of 12th October, 1998 of PNC that their product meets with the tender requirement. That clarification was without prejudice to the rights and contentions of the parties. It is contended that the Defendants were incorporated in 1964 and were converted into a private limited company in April, 1976. They are a medium size Engineering Company having experience in the field of design, manufacture and supply of various kinds of equipment to the chemical, petro-chemicals, fertilizer, oil/gas, power, marine, space, defence and R & D Establishments. The Defendants it is contended are manufacturing desalination plants of different types in technical collaboration with M/s. Caird & Rayber Clark Ltd., U.K. The Collaboration Agreement is of 29th November, 1995. The Defendants have manufactured and supplied more than 70 plants of various types to the Indian Navy and others. The Defendants are manufacturing desalination plants from September, 1987. It is further pointed out that Defendants have manufactured various desalination plants by the Reverse Osmosis Process. The sale in respect of the Reverse Osmosis plants has gone upto a sum of Rs. 160 lacs. It is contended that the Disc and Tube type Reverse Osmosis plants were invented by a German Company viz, GKSS - Gessthacht (FRG) under a registered patent. GKSS itself is a research organization and is not permitted to manufacture any plant, but is permitted to license their technical knowhow to manufacture such plants. One such company is Enviro-Chemie who has been manufacturing said plants under the R.O.Modules, using the Disc and Tube type. Their modules are named as MD-12. By the same letter the Defendants were informed that the Disc and Tube module MD-12 did not infringe any patent. On the contrary, MD-12 and other Disc Modules are available in the market, were based on the patent of the said GKSS and that said German Company by name Enviro-Chemie had license from said GKSS as well as other suppliers. It is pointed out that the turnover and sales reflected in their latest Balance Sheet would establish that the Defendants are not a competitor of the Plaintiffs as they are a very big organization. It is further pointed out that so called application for registration by the Plaintiffs is only of March, 1998. It is pointed out that the presentation to the Coast Guard was in April of 1997 whereas the Agreement to manufacture the disc tube module with Enviro-Chemie is of 4th September, 1997. Reliance therefore on the presentation is of no consequence. It is further pointed out that the Plaintiffs are importing the said plants from their German Counterpart and are not entitled to any exclusive user of the name described as Disc/disk Tube which are only descriptive of the technology used by the Plaintiffs. It is contended that the Defendants are entitled to use the same technology and Plaintiffs are not entitled to claim any exclusive user over the said technology nor can the Plaintiffs claim any exclusive user of the said marks. From the affidavit filed in support of the Plaintiffs claim, it is pointed out that some of the affiants have not even purchased goods from the Plaintiffs as can be seen from the names annexed of purchasers. It is further pointed out that the Defendants are manufacturing plants under their name and there is no likelihood of confusion between the goods sold by the Plaintiffs and the goods sold by the Defendants. It is therefore contended that no case is made out for the grant of any relief and the interim injunction granted should be vacated. It is pointed out that what the Indian Navy had asked for was the supply of desalination plant with Disc Tube Module Reverse Osmosis. It is in these circumstances that the Plaintiffs themselves had agreed for clarification and that the Court clarified its own order dated 10th September, 1998.

Counsels have relied on the various Judgments which will be referred to, to the extent necessary.

3. The first question which has to be considered in an action of passing off is, what is the right claimed by the Plaintiffs in themselves, which is distinctive to their product. The case of the Plaintiffs in the plaint is that they are using the trade mark DISK TUBE / DISC TUBE as manufacturers of quality products supplied under the said mark. Since 1992 according to the Plaintiffs they are selling the product under the said trade mark DT DISK TUBE commonly abbreviated to DT MODULE on an extensive scale. The averments in paragraph 3 that they have applied for registration as now come on record is only in the month of March, 1998. The Plaint was lodged on 21st August, 1998. In their Exhibit under their name ROCHEM RO-Water Desalination the words used are "DISK TUBE MODULE TECHNOLOGY", below is the expression "REVERSE OSMOSIS SYSTEMS". In the information given it is set out that the Disc Tube Module (DT) is a major advance from the plate module technology which was originally developed by the West Germany Research Center (GKSS). It is then set out that the successful development of the DT module was only made possible by a precise technical approach in developing the total RD system. It is then set out that ROCHEM possesses the rare capability of being both the module manufacturer and the systems manufacturer. In the plaint as set out earlier it has been pleaded that they are manufacturing the plants. In the pleadings more specifically in the rejoinder dated 6th October, 1998 in paragraph 8 it is set out that the Disc Tube Module Technology used in the Plaintiffs Reverse Osmosis Desalination plant is a patented design. The design is patented by the Plaintiffs German collaborators Rochem RD Wasserbehandlung Gmbh, in the European Economic Community (EEC), U.S.A., Japan and many other countries including in India where the patent subsists. Their RO desalination plants incorporate the Disc Tube Membrane Technology. Though there are several manufacturers/suppliers of desalination plants in India the Plaintiffs claim that they are the only one whose RO desalination plant conform to the Disc Tube Membrane or Disc Tube Module technology. In other words what is clear is that the Disc Tube Membrane is a technology which uses the disc and tube module using the scientific principle of reverse Osmosis for conversion of salt water into potable water or what is popularly known as desalination. The Plaintiffs have been using the said technology from 1993 onwards. They were therefore the first to use the technology. The Defendants on the other hand it is contended in their presentation of 10th April, 1997 had categorized RO modules under four types being (1) tabular, (2) plate and frame, (3) spiral wound and (4) hollow fine fiber. It is then pointed out that in the said presentation it was set out that only plate and frame type plants used for sea water duty or brackish water duty are sold under ROCHEM brand and that too for small to medium capacity. ROCHEM has developed their own modification known as Disc and Tube module. However, that is same as Plate and Frame module and the only difference is all that it is of patented design. Thereafter it is set out that should the Indian Navy and Coast Guard still like to consider the Disc and Tube design then it is better to accept the Plate and Frame type. What is sought to be contended therefore is that the presentation by the Defendants was in respect of the plate and frame type and not Disc and Tube design. The Defendants have annexed and relied on the letter by their Collaborators which is dated 4th September, 1997 much after the presentation to the Indian Navy and/or Coast Guard. By this letter their Collaborators have informed the Defendants that they are authorized to build plants with RO-Modules using the disc and the tube type. The modules are manufactured in their specialized factory in ROBdorf near Frnakfurt and shipped to TAS to be integrated into a RO-System. It is then set out that the Disc and Tube module MD-12 does not infringe any patent. On the contrary the MD-12 modules and the other disc modules available on the market are based on the patent of GKSS - Geesthacht (FRG) and they have taken a license from that company as well as other suppliers. In the same letter it is also set out that they are also authorized to supply proprietary spares for MD 12 modules and to provide after sales service. Therefore it is clear that the modules are manufactured by using disc and membrane technology by a party having a right to use the technology. The Defendants are incorporating the said modules into their system.

4. The cause of action in the Plaintiffs in moving this court was the advertisement published in the Brochure brought out by the Indian Coast Guard in which the Defendants advertised as under :-

"Manufacture of Desalination plants, Disc & Tube Type R.O.Plants, Heat Exchangers, Pressure Vessels, Columns & Tanks."

It is thus pertinent that what the Plaintiffs and Defendants are doing in fact are using the technology for desalination of sea water by a process which uses disc and tube modules. which is an advance over the earlier modules, in the market. The Plaintiffs have been marketing those products on the averments as it stands from the year 1993. Therefore because the Plaintiffs were the first to use and are using and/or marketing the product using the disc and tube technology under the name DT or Disc and Tube/ Disk and Tube, are they entitled to the injunction restraining the Defendants from using the word "Disc and Tube" or any other mark deceptively similar on the ground that a man has no right to put up his goods for sale as the goods of a rival trader.

5. The law relating to passing off is now well settled. A Plaintiff to maintain an action has to first satisfy, in the case of a descriptive word, that it has acquired distinctive or secondary meaning in connection with the Plaintiffs business, so that the use of those words in the trade name adopted by another is likely to deceive the public. In the case of desalination plants the expression public as will be seen will have to be restricted to those in the trade or the members of the public who use desalination plants as now explained in M/s. S.M.Dyechem Ltd. v/s. M/s. Cadbury (India) Ltd., JT 2000(7) SC 151. The Apex Court has observed as under :-

"As to scope of a buyer being deceived, in a passing off action, the following principles have to be borne in mind. Lord Romer, LJ has said in Payton & Co. v. Snelling Lampard & Co. [(1990) 17 RPC 48] that it is a misconception to refer to the confusion that can be created upon an ignorant customer. The kind of customer that the Courts ought to think of in these cases is the customer who knows the distinguishing characteristics of the Plaintiff's goods, those characteristics which distinguish his goods from other goods in the market so far as relates to general characteristics. If he does not know that, he is not a customer whose views can properly be regarded by the Court. [See the cases quoted in N.S.Thread & Co. v. Chadwick & Bros. (AIR 1948 Mad. 481), which was a passing off action]. In Schweppes case, Lord Halsbury said, if a person is/so careless that he does not look and does not treat the label fairly but takes the bottle without sufficient consideration and without reading what is written very plainly indeed up the face of the label, you cannot say he is deceived."

In the instant case we are not dealing with a customer who comes across the counter and asks for merchandise, we are concerned with the customer who uses desalination plants; in other words a specialized customer. Would such a customer who knows that the Plaintiffs have been using the word DT or Disc and Tube is likely to be confused if any other manufacturer, manufactures and sells desalination plants, using the disc and tube technology or descriptive mark. Is such a person likely to confuse the goods of such other manufacturer as that of the Plaintiffs. Has that name acquired a distinctiveness, so as to make a man believe that a product marketed as Disc Tube Technology is associated with the Plaintiffs alone. Is that the reputation that the Plaintiffs have acquired. In refrigerators we have the frost free technology. Will a manufacturer who had come into the market first and because of advertising their Refrigerator as being frost free would be entitled to maintain an action in passing off against those others who entered the field much later and who also market and manufacture refrigerators as frost free. There is an extensive discussion on this aspect, in the judgment of the Court of Appeal in the case of McCain International Limited v. Country Fair Foods Limited and another, (1981) R.P.C. In that case the Plaintiffs introduced in the market, a product known under the name "McCain Oven Chips". The Defendants in April, 1980 sought to launch their version of the product under the names "Country Fair Oven Chips" and "Birds Eye Oven Chips". On a Notice of Motion being taken out by the Plaintiffs, they obtained exparte injunction which was appealed. In appeal it was contended that name "Oven Chips" was descriptive of the product and it had not subsequently acquired distinctiveness and when a descriptive name had been applied to a product by the sole supplier of that product, that name could not easily acquire distinctiveness. On the other hand it was contended that "oven chips" was not descriptive but was a fancy name, being an ungrammatical combination of two words which had not previously been associated together and by virtue of the Plaintiffs extensive sales and advertising it had become distinctive of their product. The appeal was allowed and the order set aside. I will advert further to this case later on.

The Plaintiffs have supported their case based on the Judgment of Frank Reddaway and Frank Reddaway & Co. Ltd., v. George Benham and George Banham & Co. Ltd., 1896 A.C. 199. In that case the Plaintiffs for some years had been selling belts under the name "Camel Hair Belting". That name had come to mean in the trade as the plaintiff's belting and nothing else. The Defendants began to sell belting made of the yarn of camel's hair and stamped it "Camel Hair Belting". On the facts of that case the Court held that the Plaintiffs in 1877 began to make belting from yarn, which consisted principally of wool or hair and sold it under the name of "Woolen Belting". In 1879 they began to sell the belting, which it manufactured as "Camel Hair Belting." for the purpose of distinguishing it from the belting of other manufacturers. Large proportion of its trade has been with India, the Colonies and foreign countries. The yarn of which the appellant's belting was made, Chiefly consisted of, for the most part, of camel hair. The respondent who was in employment of the appellant after he ceased to be in employment, began to manufacture belting on his own account. He made belting from yarn of the same description as that used by the appellants, which he sold and advertised as Arabian belting. The respondent company was formed in 1891 and in April / May began to call their belting as "Camel Hair Belting". The House of Lords held that there is no exception in the case of a name, which is verbally and in its primary meaning a true description of the goods, but which has acquired the meaning in the trade that the goods are those of a particular maker, so that purchasers ask for them exclusively by that name and buy them in the belief that they are getting that trader's goods. The Court observed that outside the Trade Marks Act, no man has the exclusive right to a name: the right is not to a name, but to protection from having another man's goods passed off as his goods. The Court then observed that the person not familiar with the trade it would simply be a description of the article sold and not a representation of it being made by a particular manufacturer. But then the Court would not know, how far particular words, even though descriptive of the article sold, may have acquired a kind of technical signification which would give to them in the trade a character of being made by a particular manufacturer as if they were stamped with its trade-mark. In other words, though the words may have been descriptive by a passage of time and user in the trade and as understood by the trade, they had become distinctive of the persons who sold the goods. On the facts of that case in appeal the order was reversed and the House of Lords returned the order of the trial court granting injunction for reasons set out above.

6. This Judgment came up for consideration in McCain International Limited (Supra). and was distinguished. It was held that the case of Frank Reddaway and Frank Reddaway & Co. Ltd., (supra) was an extra ordinary case, which merely decided that the use of a descriptive term does not necessarily defeat a claim for passing off. Moreover the expression in that case, which was "Camel Hair Belting", had always been regarded as a fancy name. It was thought that there was no connection between the animal and the product. The Court noted that in passing off litigation there is a real distinction between a fancy name and a descriptive name. A fancy name is an indication of a single source and that is why it is impossible, generally speaking, for a defendant to appropriate the same fancy name without committing the tort of passing off. A descriptive name on the other hand does not indicate the source of the goods, but the nature of the goods. On the facts of that case the Court held that only 18 months had elapsed between the marketing of the product and that in the course of these 18 months, it was quite impossible for the Plaintiffs to establish that a secondary meaning has been attached to anything other than that which is claimed on their own packet and what had been claimed on their own product is "McCain Oven Chips". The Court held that the Plaintiffs had been unable to establish the descriptive name had obtained distinctiveness. For the sake of discussion, I may also refer the case of Cellular Clothing Company Limited v. Maxton & Murray, [1899] A.C. 326, where Lord Halsbury observed "where you are dealing with a name which is properly descriptive of the article, the burden is very great to show that by reason of your using that name descriptive of the article you are selling, you are effecting to sell the goods of somebody else." Referring to his observations in the case of Reddaway V. Banham (supra): Lord Halsbury explained "Certainly Camel Hair Belting case may be an example of what, under ordinary circumstances, it would be very difficult to establish; but it was established there." The following observation of Lord Shand from that case may be reproduced.

"If a person employing a word of term of well-known signification and in ordinary use ..... is yet able to acquire the right to appropriate a word or term in ordinary use in the English language to describe his goods, and to shut others out from the use of this descriptive term, he would really acquire a right much more valuable than either a patent or a trade mark; for he and his successors in business would gain the exclusive right, not for limited time as in the case of a patent, but for all time coming, to use the word as applicable to goods which others may be desirous of manufacturing and are entitled to manufacture and sell as much as he is. That being so, it appears to me that the utmost difficulty should be put in the way of any one who seeks to adopt and use exclusively as his own a merely descriptive term".

In the same case in the matter of invention of a new product Lord Davey observed as under:-

".......where a man produces or invents, if you please, a new article and attaches a descriptive name to it-a name which, as the article has not been produced before, has, of course, not been used in connection with the article-and secures for himself either a legal monopoly or a monopoly in fact of the sale of that article for a certain time, the evidence of persons who come forward and say that the name in question suggests to their minds and is associated by them with the plaintiff's goods alone is of a very slender character, for the simple reason that the plaintiff was the only maker of the goods during the time that his monopoly lasted, and therefore there was nothing to compare with it, and anybody who wanted the goods had no shop to go to, or no merchant or manufacturer to resort to, except the plaintiff .....If a man invents a new article and protects it by a patent....he has a legal monopoly: but when the patent expires all the world may make the article, and if they may make the article they may say that they are making the article, and for that purpose use the name which the patentee has attached to it........ But the same thing in principle must apply where a man has not taken out a patent, as in the present case, but has a virtual monopoly because other manufacturers, although they are entitled to do so, have not in fact commenced to make the article. He brings the article before the world, he gives it a name descriptive of the article: all the world may make the article, and all the world may tell the public what article it is they make, and for that purpose they may prima facie use the name by which the article is known in the market."

7. It is therefore, clear that the Judgment in the case of Frank Reddaway v. Banham (supra) has been distinguished and restricted to the facts of that particular case. It is no doubt true that reliance was also placed in the Judgment in the case of Carlsbarg v/s Tennent Caledonian Breweries Limited, in the Court of Session, Scotland. There action was brought in respect of a beer which was marketed as "special brew", in view of the fact that though the name was descriptive it had become distinctive, the injunction as prayed for was granted. A large number of other judgments have been cited which to my mind need not be cited as generally they are for the same proposition namely that even a descriptive word if it becomes distinctive, the Plaintiffs can against others using the word similar to that, can institute and get injunction from so using the word. After the judgment in M/s. S.M.Dyechem Ltd. (supra), the concept of deception or confusion has to be on the touchstone of the customer who knows. The Defendants are marketing their products using Disc & Tube modules under their own name. The question of knowledgeable customers being deceived and confused will hardly arise. The Plaintiffs were marketing goods, descriptive of a particular technology whose patent was registered and of which the Plaintiffs were only licensed to manufacture. They are using the abbreviated word mark for the Technology. They were marketing the product when there was no other manufacturer. When their monopoly lasted and therefore there was nothing to compare with it. Apart from that as can be seen, these are desalination plants, manufactured and sold, either by intending purchasers placing orders or inviting bids. The question of deception, prima facie at least will not arise. The principle applicable in this case will be the observations of Lord Davey's in Cellular Clothing Company Ltd. (Supra).

8. On the facts of the present case can it be said that the descriptive word in so far as Plaintiffs are concerned had obtained distinctiveness. No doubt there are some affidavits filed in support of the Plaintiffs claim. To my mind that by itself would not be sufficient material. All that Plaintiffs were doing were using the new technology. It was the only manufacturer then and merely because it was using the descriptive name when none others were using the technology to manufacture desalination plants would not make the name distinctive which would restrain other manufacturers from using the technology and the name associated with the technology. The invention is not theirs. They have collaboration with other. The word Disk and Tube is descriptive of the technology used and had not obtained any distinctiveness.

The Plaintiffs have therefore failed to make out a strong prima facie case which is the requirement for an injunction as has been held by the apex court in the case of S.M.Dyechem Ltd. V/s. Cadbury (India) Ltd. (supra) while holding and explaining the Judgment in American Cyanamid Co. V/s. Ethican Ltd., [1975(1) All E.R. 504 (HL)] as explained in the case of Colgate Palmolive (India) Ltd. V/s. Hindustan Lever Ltd., 1999(7) SCC 1. Plaintiffs have also failed to make out a case of irreparable injury or loss nor is the balance of convenience in their favour. Considering the above to my mind no case has been made out. Consequently, the injunction granted has to be vacated. In view of the above, Notice of Motion dismissed.

In the circumstances of the case, there will be no order as to costs.

9. Learned Counsel for the Plaintiffs requests to continue injunction for the further period of eight weeks. Considering that there was an ad-interim order in force since 1998, the said order to continue for eight weeks from today. On expiry of which period the stay will automatically stand vacated.

All parties concerned to act on the ordinary copy of this order duly authenticated by the Associates of this Court.

P.A. to give ordinary copy of this order to the parties concerned

Certified copy expedited.

Motion dismissed.