IN THE HIGH COURT OF MADRAS (MADURAI BENCH)

AS (MD) No. 89 of 2012

Decided On: 12.04.2017

Hon’ble Judges/Coram: C.V. Karthikeyan, J.

Headnote

Suit for permanent injunction, damages and rendition of accounts – granted – Defendant (Appellant): Edison Paints – Plaintiff (Respondent): Agsar Match Industries – Plaintiff – regd. Partnership firm – started Hindu Joint Family Business in 1985 – coined and adopted the trademark “STAG” and “SUPER STAG” – Divided families started their own businesses later – Defendant firm is one such unit – Plaintiff’s trade name – acquired reputation for selling red oxides and super oxides – Defendant adopted the same trademarks with additions – alleged to be misleading and prejudicial to reputation and goodwill of plaintiff – Passing off suit filed – Defendant contended family trademark cannot be used exclusively – different cartons – product to be used by civil contractors – no confusion – Held: Common man not expected to concentrate on colour and manner of writing – confusion to mind of consumer – trampling on reputation of Plaintiff – Passing off

Keywords: Passing off, Section 104, Section 105, the Trade and Merchandise Marks Act, 1958

IN THE HIGH COURT OF MADRAS (MADURAI BENCH)

AS (MD) No. 89 of 2012

Decided On: 12.04.2017

Appellants: Edison Paints Vs. Respondent: Agsar Match Industries

Hon’ble Judges/Coram: C.V. Karthikeyan, J.

JUDGMENT

  1. The Appellant is the Defendant in OS. No. 61 of 2004 on the file of the Principal District Court, Tuticorin, which had been filed under Sections 105 and 106 of the Trade and Merchandise Marks Act, 1958 and under Order 7 Rule 1 of CPC, for permanent injunction restraining the Defendant from passing off the goods of the Defendant by using a deceptively similar mark of the Plaintiff and for damages of Rs. 60,000/- for the loss of profit for three months between August 2003 and October 2003 and for a direction to render true and proper accounts of profits made by the Defendant and for mandatory injunction directing the Defendant to deliver to the plaintiff all sales promotion literature, stationery and packing materials and for a further direction to pay a sum of Rs. 10,000/- towards damages for the loss of goodwill and reputation and for costs.
  2. The Plaintiff, M/s. Agsar Match Industries, which is a registered Partnership Firm, having its Office at Tuticorin, had claimed that they are the owners of the trademark with respect to the products, red oxide and colour oxide, namely, the words STAG BRAND with a symbol of a picture of a stag and the words SUPER STAG with a picture of a stag. The actual pictures had been annexed with the plaint. It had been stated that originally, M/s. Agsar Match Industries had coined and adopted the above trademarks from 30.3.1985 and has been trading and operating them across the country. The said Company was a component of a composite Hindu Joint Family business, called Agsar Group. Three branches, namely, Shenbaga Nadar Group, Arumugachamy Nadar Group and Ganesa Nadar Group became divided in 1989 and 1996. The divided families commenced their own businesses and the Defendant Firm is one of such business unit started by N.S. Jeyamanoharan, who belonged to the Shenbaga Nadar Group, which moved out of the family in 1989.
  3. There were two other groups, namely, Alagappa Nadar branch and Rajamanicka Nadar branch, who remained joint and retained the Company M/s. Agsar Paints P Limited along with the business, trademark and goodwill. The said Company assigned the said trademark to the Plaintiff, which is another sister Company of the branch of 25-04-2017 (Page 1 of 8 ) www.manupatra.com NLSIU Bangalore

the family by means of a assignment deed dated 15.6.1996. The Plaintiff and their predecessors had spent considerable money for advertisements to acquire reputation and maintain the trade name. They have acquired goodwill and reputation throughout India and the trademark has come to be connected with the business of the Plaintiff. M/s. Agsar Paints P Limited had applied for registration in 1995 before the Trademark Registry, Mumbai. The Plaintiff had impleaded themselves since they were assigned with the trademark. Claiming that they are the absolute owner of the said trademark and good will and further claiming that the Defendant has no right over the same, the suit has been filed.

  1. The cause of action for this suit arose since the Plaintiff claimed that the Defendant was selling red oxide and colour oxide under the Plaintiff’s trade names, using the additional word DOUBLE and using the picture of two stags. The offending picture has also been annexed to the plaint. It had been stated that the Defendant had purposely misled the public into believing that their product is actually the product of the Plaintiff. Consequently, the Plaintiff claimed that injury has been caused to its reputation. It had been further stated that the product of the Defendant is inferior in quality and the rate is also lower. It had been further stated that the names DOUBLE STAG and SUPER DOUBLE STAG are close imitation of the plaintiffs trademark and have been used with the sole intention of misleading the public. There was an earlier occasion when the Defendant indulged in such illegal act. A letter dated 22.7.2000 was issued and the Defendant stopped the act of passing off. Again in 2003, the Defendant had started using the said offending trademarks. Another letter dated 14.11.2003 was issued. The Defendant had not replied to the same. Consequently, the Plaintiff had filed this suit seeking the reliefs as mentioned above.
  2. In the written statement filed on behalf of the Defendant, it had been stated that the commodities produced by both the Plaintiff and the Defendant are common commodities. The allegations that the Plaintiff had exclusive right to use the trademarks STAG and SUPER STAG had been denied. It had been further stated that a family trademark cannot be used exclusively by one group in view of the partition. It had been stated that the Defendant adopted German technology in the manufacture of their products. It had been further stated that the products red oxide and colour oxide are used by the civil contractors and selective users, who are aware of the quality of the product. It had been stated that the civil court has no jurisdiction to try the suit. It had been further stated that the Plaintiff had themselves pleaded that the trademark has not been registered and it had, therefore, been stated that the Plaintiff had no existing right to institute the suit. It had been stated that even otherwise, the trademarks DOUBLE STAG and SUPER DOUBLE STAG are totally different from the trademark used by the Plaintiff.
  3. It had been further stated in the written statement that there can be no doubt with respect to the difference between the two products. There is a difference in the colour of the label. It had been stated that the stag brand for umbrella is also used and consequently, it is a common mark and the Plaintiff cannot claim exclusive right over the same and the logo of the Plaintiff was one stag and logos of the Defendant was two stags with different colour settings. It had been stated that the Defendant did not indulge in passing off and injury has not been caused to the Plaintiff. It had been stated that there are also other manufacturers using the trademark stag. The allegations that the Defendant stopped the act of passing off by receipt of letter in 2000 and resumed usage in 2003 had been specifically denied. It had been stated that the colour pattern of the boxes are entirely different, German technology is used by the Defendant and is printed in the box, the name and the address of the Defendant are distinctly printed, the retail rates are different and the word EDICOAT is used by

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the Defendant for their products and even the weight of 500 gms is mentioned differently in the packages of the Defendant. The Defendant, therefore, claimed that the reliefs claimed by the Plaintiff cannot be granted by this court.

  1. The parties went to trial and the court below had framed the following issues for trial:-

“1) Whether the trademark suit can be entertained and tried by this court for disposal according to law?

) Whether the Plaintiff has got their trademark registered with trade name and symbol of the trade brand with the symbol of picture of stag as mentioned in item 1 of Schedule A and Super Stag Brand with the symbol of a picture stag as mentioned in item 2 of the Schedule A?

) Whether the Defendant has registered their trade name and symbol with word Double Stag and the word Double Stag with symbol of picture of two stags in their products which are deceptively similar to that of the Plaintiff’s products and thereby purposely misleading the public under the belief that the products supplied by the Defendant are that of the Plaintiff’s products and thereby caused damages to the Plaintiff?

) Whether the Plaintiff is entitled for permanent injunction restraining the Defendant its men, agents, servants etc. from passing off his goods by use of a similar mark and appearance as those used by the Plaintiff?

) Whether the Plaintiff is entitled for damages of Rs. 60,000/- towards loss of profit for three months from August 2003 to October 2003 from the Defendant?

) Whether the Plaintiff is entitled for Rs. 10,000/- towards damages for loss of goodwill and reputation from the Defendant?

) Whether the Defendant can be directed to render a true and proper account of the profits made by him on account of the passing off of goods in relation to that of the Plaintiff?

) Whether the Plaintiff is entitled for mandatory injunction directing the Defendant, his agents, servants, etc. to deliver up to the Plaintiff an affidavit of all sales promotion literature, stationery, packing material or any goods bearing the schedule A and B trademarks or any other marks deceptively or confusingly similar to the plaintiff’s trade name for destruction.

) To what reliefs the Plaintiff is entitled to?”

  1. During the trial, on side of the Plaintiff, one Paramaguru Raja Nellaiappan was examined as PW.1 and Ex. A1 to Ex. A39 were marked. These included, the form for change of name as Ex. A1, the letter of allotment of application number of trademark as Ex. A2, publication in the trademark journal dated 16.9.2001 as Ex. A3, the invoices of the Plaintiff as Ex. A4 to A.24, the allotment of application number and paper publication as Ex. A25, the certificate of registration of the Plaintiff partnership firm, dated 25.3.1996 as Ex. A26, the partnership deed dated 7.10.1994 as Ex. A27, the memorandum of family arrangement dated 24.9.1989 as Ex. A28, the memorandum of

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family arrangement among the Paramagururaj Nellaiappan as Ex. A29, the assignment deed dated 15.9.2006 as Ex. A30, the letter issued by the Plaintiff dated 15.9.2000 and another letter sent by the Plaintiff dated 4.11.2003 as Ex. A31 and A.33, the certificate of registration of trademark regarding stag brand dated 24.8.2005 as Ex. A38 and certificate of registration of trademark regarding super stag brand dated 18.7.2007 as Ex. A39 and the cartons used by the Plaintiff as Ex. A35, A36 and A37.

  1. On the side of the Defendant, two witnesses Jeya Manoharan and Suresh were examined as DW.1 and DW.2 and Ex. B1 to B9 were marked. These included the licence given by N.S. Prabakaran dated 1.9.1995 as Ex. B1, the stamp receipts for using double stag as Ex. B2, the letter from the trademark registry dated 20.7.2004 as Ex. B3, the licence application as Ex. B4, stock transfer to branch statement as Ex. B7, the annual return as Ex. B8 and the carton used by the Defendant as Ex. B9.
  2. On consideration of the oral and documentary evidence, the court below partly decreed the suit and granted the relief of permanent injunction, restraining the Defendant from passing off their goods as that of the Plaintiff by using the plaintiff’s trademark and also granted mandatory injunction, directing the Defendant to deliver to the Plaintiff all sales promotion literature and packing materials within a period of two months from 20.3.2012 and also directed payment of Rs. 10,000/- with interest 6% per annum from the date of the suit till the date of realisation towards damages for loss of good will and reputation and also granted costs of the suit. However, the reliefs relating to payment of damages due to loss of profit and direction to render true and proper accounts of profits were not granted by the court below. Challenging the said judgement and decree, the Defendant has filed the present appeal.
  3. This court heard the arguments of Mr. S. Meenakshi Sundaram, the learned senior counsel for the Appellant and Mr. AR.L. Sundaresan, the learned senior counsel for the Respondent.
  4. The learned senior counsel for the Appellant, after taking the court through the facts of the case, assailed the impugned judgement and the reasons given by the court below, stating that the trademark of the Appellant and the trademark of the Respondent are entirely dissimilar and there can be no confusion in the minds of any person who purchases both the products. The learned senior counsel stated that the products are common, namely, red oxide and colour oxide. These products are used by the civil contractors. It had been stated that such a group of consumers know the quality of the products and can never be misled by the trademark which is found on the product. Moreover, the learned senior counsel invited this court to compare the actual trademark as projected in Ex. A35, A36 and A37, which are the trademarks of the Respondent and the trademark as seen in Ex. B9 which is the trademark of the Appellant. According to the learned senior counsel, a casual glance at Ex. A35, A36 and A37 and Ex. B9 reveals that the product of the Appellant has two stags with the word SUPER DOUBLE STAG. However, the product of the Respondent has a single stag with the word SUPER STAG. The colour of the cover and the borders have been pointed out by the learned senior counsel for the Appellant, who insisted that a comparison of both the products side by side must be undertaken and it will be evident that there can be no confusion in the minds of the consumers.
  5. The learned senior counsel for the Appellant, in this regard relied on the decision of the Honourable Supreme Court reported in MANU/SC/0763/2001 : AIR 2002 3 SCC 65 (Laxmikant V. Patel v. Chetanbhai Shah and another) wherein in paragraph 8, it had been observed as follows:-

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“…. An action for passing off will then lie wherever the Defendant Company’s name, or its intended name, is calculated to deceive, and so to divert business from the Plaintiff, or to occasion a confusion between the two businesses. If this is not made out there is no case. The ground is not to be limited to the date of the proceedings; the court will have regard to the way in which the business may be carried on in the future, and to its not being carried on precisely as carried on at the date of the proceedings. Where there is probability of confusion in business, an injunction will be granted even though the Defendants adopted the name innocently.”

The learned senior counsel stated that in this case, there is no confusion, though the product may be the same, but the cartons in which the product is sold are totally different. The learned senior counsel also relied on the decision of the Honourable Supreme Court reported in MANU/SC/0407/2000 : AIR 2000 SC 2114 (M/s. S.M. Dyechem Limited v. M/s. Cadbury (India) Limited) wherein the Honourable Supreme Court in paragraph 53 and 54 had observed as follows:-

“53. As to scope of a buyer being deceived, in a passing off action, the following principles have to be borne in mind. Lord Romer, learned Judge has said in Payton & Co. V. Snelling Lampard & Co. (1900 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 and Bros., MANU/TN/0306/1947 : AIR 1948 Madras 481), which was a passing off action). In Schwepps’ 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.

  1. In our view, the trial court in the present case went wrong in principle in holding that there was scope for a purchaser being misled. The conclusion was arrived at without noticing the above principles.”

The learned senior counsel for the Appellant also relied on MANU/SC/0576/2015 : 2015 7 Scale 136 (S. Syed Mohideen v. P. sulochana Bai) wherein the Honourable Supreme Court had observed as follows:-

“Traditionally, passing off in common law is considered to be a right for protection of goodwill in the business against misrepresentation caused in the course of trade and for prevention of resultant damage on account of the said misrepresentation. The three ingredients of passing off are goodwill, misrepresentation and damage. These ingredients are considered to be classical trinity under the law of passing off as per the speech of Lord Oliver laid in the case of Reckitt and Colman Products Limited v. Borden Inc (MANU/UKHL/0012/1990 : 1990 1 ALL ER 873) which is more popularly known as “Jif Lemon “case wherein the Lord Oliver reduced the five guidelines laid out by Lord Diplock in Erven Warnink V. Townend & Sons Limited (MANU/UKHL/0030/1979 : 1979 Ac 731, 742 (HL)) (the “advocate case”) to three elements: (1) Goodwill owned by a trader, (2)

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misrepresentation and (3) damage to goodwill. Thus, the passing off action is essentially an action in deceit where the common law rule is that no person is entitled to carry on his or her business on pretext that the said business if that of another. This court has given its imprimatur to the above principle in the case of Laxmikant v. Pates V. Chetanbhat Shah and another (MANU/SC/0763/2001 : 2002-3-SCC-65).”

Pointing out to the above, the learned senior counsel for the Appellant stated that the Respondent should have established loss to goodwill and damage to his business. There must be a clear case of misrepresentation. In this case, the learned senior counsel pointed out that there is no evidence for loss of goodwill. There is no evidence let in by the customers that there was misrepresentation. There is no evidence by the Respondent for loss of profit. The books of accounts have not been produced. The learned senior counsel also stated that since the persons affected were not examined and since the trademark relied on by the Respondent was unregistered and there is no visually or phonetically similarity between the two trademarks, the appeal should be allowed, setting aside the impugned judgement and decree of the court below.

  1. On the contrary, the learned senior counsel for the Respondent disputed the said contentions of the learned senior counsel for the Appellant. The learned senior counsel pointed out that the product of the Respondent, who was the Plaintiff before the Trial Court and the product of the Appellant who was the Defendant, were the same. Both dealt with red oxide and colour oxide. As a matter of fact, both the companies were from the same family. The Appellant Company is a branch of the Respondent Company. Consequently, the Appellant knew that the Respondent was dealing in red oxide and colour oxide using the trademark stag. The learned senior counsel also pointed out to the portions in the plaint wherein it had been stated that the M/s. Agsar Paints P Limited had been adopting the trademarks from 30.3.1985 and was assigned the trademarks from 15.6.1996.
  2. The learned senior counsel for the Respondent, in so far as the trademark is concerned, stated that the Appellant herein had only included the word DOUBLE, but had retained the original impression of the image stag and consequently, stated that the Appellant was riding on the reputation built up by the Respondent herein. The learned senior counsel further stated that the trademark stag is an arbitrary name which has no connection with the product, which is actually being sold by both the Appellant and the Respondent. The Appellant could have chosen any other trademark, but had deliberately chosen double stag thereby giving an impression to the general public that he is part of the Respondent Company. The learned senior counsel was emphatic in his assertion that confusion would be caused in the minds of the consumers. It was also pointed out that the trademark of the Respondent had also been registered and this has also been admitted by the witnesses for the Appellant during his cross examination. Consequently, the learned senior counsel stated that protection is to be granted to the trademark of the Respondent.
  3. In this connection, the learned senior counsel for the Respondent relied on the decision of this court reported in MANU/TN/1814/2016 : 2016 4 CTC 647(Banana Brand Works P Limited v. Kavan Antani, Director, Bananabandy Network Private Limited) wherein it had been observed as follows:-

“8.1 Passing off is a concept in the domain of common law remedy. It offers protection to a party, when the other makes an attempt to pass off his goods through a misrepresentation as that of the former. What is required in a passing off is the existence of a goodwill, damage or injury to it and

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through representation. This fundamental principles called as classical trinity has been enunciated in Jif Lemon’s Case 1991 All ER 873, which deduced the larger requirement enunciated in the Advocate’s case (Erven Warnink V. Townend and Sons Limited MANU/UKHL/0030/1979 : 1979 2 All ER 927 (See S. Syed Mohideen v. P. Sulochana Bai MANU/SC/0576/2015 : 2016 2 SCC 683).

8.2 A party who come to the court, has to establish the three basic requirements as mentioned above, while seeking an order of protection. An actual injury is not a sine qua non and thus, likelihood of damage would suffice. A misrepresentation by the Defendant to the public may or may not be intentional. What is sufficient is that an action qua a Defendant, which leads or likely to lead a prospective customer to believe that the goods or services offered by it are that of the Plaintiff. Such a deception can either be proved on evidence and if not by the decree of probability, of course, to the satisfaction of the court.”

  1. This court carefully considered the arguments of the learned senior counsel on either side.
  2. In this case, the Respondent Partnership Firm has been in the business of manufacture and sales of red oxide and colour oxide under the trade name M/s. Agsar Match Industries with the symbol of stag brand and a picture of a stag and also with the name SUPER STAG with the same symbol stag. As is seen, Appellant, who is also in the very same business of manufacturing and selling of red oxide and colour oxide, has a symbol double stag and the words SUPER DOUBLE STAG.
  3. Exs. A35, A36 and A37 and Ex. B9 are the images with respect to the Respondent’s and the Appellant’s carton boxes respectively. A close perusal of both the boxes shows that there are differences in the colour. However, the striking aspect in both the boxes is the image of one stag in one and the image of two stags in the other. As a matter of fact, even the manner in which the stag or the double stag are drawn is exactly the same. The stag is drawn in the manner as if it is running. Similarly, by superimposing yet another image of the very same stag, the Appellant has drawn the image of two stags. In the concept of trademark, it is not just sufficient that we compare both the images and expect that a common man would concentrate on the colour of the carton or on the manner in which the words are written. In this case, the predominant word is STAG. The predominant image is that of a stag. The colour of the carton may vary from time to time. It is to the choice of the Appellant or the Respondent. They have produced before this court cartons with red and blue in colour. This may not be a fixed feature of the carton. As and when they produce more and more cartons and they may take a decision to change the colour according to their fancy, the colour may vary. However, what is fixed and what still remains in the mind of the consumer or a customer is the brand name stag and the brad image stag. It is also to be noted that this image stag is totally unrelated to the product red oxide or a colour oxide. The Respondent, when they started to conceive an image, could have conceived any other animal across the worldwide fulcrum. They had settled for this particular animal, namely, stag. They had also given it a particular shape as if it is running stag. Thus by usage of time the customers have begun to link the image stage with an unrelated product red oxide or colour oxide. This is due to the efforts of the Respondent who has built goodwill for his product. This goodwill and reputation has been built not only because of the quality of the product or the price of the product, but because the product is associated with the brand image stag and the trademark stag.

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  1. Whenever anybody identifies or sees the impression stag, their mind comes back to an unrelated product, red oxide purely due to the efforts of the Respondent herein. When the Appellants, who are actually a limb of the Respondent and also in the same business of manufacturing and selling of red oxide and colour oxide, commenced independent business, they had the entire range of arbitral images of animals, birds and artificial or animated creatures to have as their trademark. They settled for the very same image of a running stag and super imposed it with yet another similar image. It is to be noted that the image of double stag is very similar to the image of the stag used by the Respondent. Horns are the same. Legs are shaped in the same manner and they are running in the same direction and they appear to be exact mirror images. All these aspects are ingrained in the mind of a civil contractor, who wants to buy red oxide. Naturally when he sees the image of a stag and the image of a double stag, there is a strong possibility that he would be under the impression that both the products come from the same Company or from sister companies, who have no animosity between them. This is trampling on the reputation already built by the Respondent in the market. This is riding on the goodwill already established by the Respondent. There is an overlapping activity namely manufacturing of red oxide. The product is the same. The stag is the same. The addition of one more stag, not distinctly but superimposing it on the existing image would only create confusion in the minds of the customer. This court, not only has to compare two cartons to find out the difference in colour, to find difference in fonts, to find different in borders, but also realise that predominantly in trademarks, the concept of an arbitral trademark and the reputation it has built has to be protected.
  2. The decisions relied on by the learned counsel for the Appellant were on principles where there were two different products, but similar cartons. They are cases where the image is related to the product. But we are placed with a situation where the product and the trademark are totally unrelated. But, due to goodwill and passage of time, the Respondent has built up reputation whereby his product, namely, red oxide and colour oxide is identified with the image of stag and this goodwill has to be protected, which means that the trademark has to be protected.
  3. When the Appellant commenced business to manufacture the same product of red oxide, they could have conceived a different image. On the other hand, they have adopted the image of the Respondent, namely, stag, by merely developing the image of the stag by adding one more by superimposing the second image over the first image. This cannot be permitted. On the above grounds, I hold that this appeal suit has to fail.
  4. It is seen that the purchasers of the products are unique in nature. They are civil contractors or masons, who require red oxide or colour oxide during construction purposes. Their perception have to be examined. When they see the two images of a stag and a double stag, the only impression which will be created is that both the products come from the same sister concerns. This is trampling on the reputation built by the Respondent. I hold that the Appellant has indulged in passing off their products as that of the Respondent. Viewed from the above angle also, I hold that this appeal suit does not merit consideration.
  5. In the result, this appeal suit is dismissed with costs. The judgement and decree, dated 20.03.2012 made in OS. No. 61 of 2004, by the Principal District Court, Tuticorin is confirmed.