IN THE HIGH COURT OF DELHI

CS (OS) 2562/2015, IAs Nos. 17826, 23396/2015, 494, 3582 & 6735/2016

Decided On: 14.07.2016

Appellants: Exxon Mobil Corporation and Ors.
Vs.
Respondent: Shailesh H. Mehta and Ors.

Hon’ble Judges/Coram:
Rajiv Sahai Endlaw, J.

Code of Civil Procedure, 1908 (CPC) – Order XXXIX Rule 1; Order XXXIX Rule 2; Code of Order XXXIX Rule 2A; Order XXXIX Rule 4; Trade Marks Act, 1999 – Section 124, Section 124(1) (b) (i), Section 29, Section 29(4) (b)

Case brief:

Facts: The two plaintiffs, who are primarily in the business of petroleum and gas but have also diversified into retail stores and rubber products, sued the two defendants, who are in the business of conducting online examination and online tests for permanent injunction restraining infringement of trademark ‘EXXON’ of the plaintiffs by the defendants by using and adopting the trade name / trademark ‘EXON’ and for ancillary reliefs. The suit was entertained and vide ex-parte ad-interim order dated 31st August, 2015, the defendants were restrained from using the trademark ‘EXON’ or any other mark deceptively similar / identical to the plaintiffs’ registered trademark ‘EXXON’ and from using the domain name ‘EXON’ in relation to their goods/products/services and in relation to their corporate name. However, two months time was given to the defendants to do the needful. The plaintiffs filed another petition contending that the defendants had not complied with the ex-parte ad- interim order aforesaid. The defendants admitted having not discontinued the use of the mark ‘EXON’ as part of their corporate name and sought to justify the same. Observing that since ex-parte ad-interim order had continued, the defendants were required to comply therewith, the personal presence of the defendant No. 1 was directed before this Court and the defendants were restrained from carrying on business in the name of ‘Exon Solutions Private Limited’.

Issue:  Whether the use by the defendants of the trademark ‘EXON’ as part of their trade name and for their business amounts to infringement of the registered trademark of the plaintiffs?

Held: The contention that the words ‘EXON’ and ‘EXXON’ are different cannot be accepted, since the pronunciation of the words remains the same, irrespective of whether the alphabet ‘X’ is used singly or doubly. The ex-parte ad interim order is made permanent, and the defendants are restrained from using the trademark ‘EXON’ or any other mark deceptively similar / identical to the plaintiffs’ registered trademark ‘EXXON’ and from using the domain name ‘EXON’ in relation to their goods/products/services and in relation to their corporate name. A further time of 15 days is given to the defendants to abide by the order.

ORDER

Rajiv Sahai Endlaw, J.

  1. The two plaintiffs Exxon Mobil Corporation and Exxonmobil Lubricants Private Limited have sued the two defendants Mr. Shailesh H. Mehta and Exon Solutions Private Limited for permanent injunction restraining infringement of trademark ‘EXXON’ of the plaintiffs by the defendants by using and adopting the trade name / trademark ‘EXON’ and for ancillary reliefs.
  2. The suit was entertained and vide ex-parte ad-interim order dated 31st August, 2015, the defendants were restrained from using the trademark ‘EXON’ or any other mark deceptively similar / identical to the plaintiffs’ registered trademark ‘EXXON’ and from using the domain name ‘EXON’ in relation to their goods/products/services and in relation to their corporate name. However, two months time was given to the defendants to do the needful.
  3. The defendants filed IA No. 23396/2015 under Order XXXIX Rule 4 of Code of Civil Procedure, 1908 (CPC) and though notice thereof was issued but the ex-parte ad-interim injunction not vacated.
  4. The plaintiffs filed IA No. 494/2016 under Order XXXIX Rule 2A CPC contending that the defendants had not complied with the ex-parte ad- interim order aforesaid. The said application came up before this Bench on 18th March, 2016 when the defendants admitted having not discontinued the use of the mark ‘EXON’ as part of their corporate name and sought to justify the same by contending that they had applied under Order XXXIX Rule 4 CPC. Observing that since ex-parte ad-interim order had continued, the defendants were required to comply therewith, the personal presence of the defendant No. 1 was directed before this Court and the defendants were restrained from carrying on business in the name of ‘Exon Solutions Private Limited’.
  5. The defendants filed IA No. 6735/2016 seeking recall of the order dated 18th March, 2016 and notice whereof was issued.
  6. The counsels have been heard on the pending applications.
  7. It is the contention of the counsel for the plaintiffs (i) that the name ‘EXXON’ which is coined/invented by the plaintiffs was adopted by the plaintiffs as far back as in the year 1967; (ii) that the plaintiff No. 1 has been in the list of Fortune 500 Companies since the year 1980; (iii) that the plaintiff No. 1 has trademark registration in as many as 160 jurisdictions all over the world and though the plaintiffs are primarily in the business of petroleum and gas but have also diversified into retail stores and rubber products and have as many as 39 registrations in India; (iv) that the plaintiff No. 1 has a subsidiary in India since 1985 and earlier also had a presence in India in the name of ‘ESSO’; (v) that though the defendants are in the business of conducting online examination which is not the business of the plaintiffs but the use by the defendants of the name / trademark ‘EXON’ which is similar in pronunciation to the trademark ‘EXXON’ of the plaintiffs will result in dilution of the plaintiffs trademark.
  8. Per contra, it is the contention of the counsel for the defendants (a) that the defendant No. 1 had commenced carrying on business of conducting online examination in the year 2001 and got incorporated the defendant No. 2 Exon Solutions Private Limited in the year 2008 and as per the Memorandum of Association of the defendant No. 2 Company, it can carry on only the business of conducting online examination and online tests and has been carrying on the said business only; (b) that the business of the defendants is separate and distinct from the business of the plaintiffs; (c) that the defendants have registration in Classes 9 & 16 since the year 2005 with effect from the year 2002 and which registration were not opposed by the plaintiffs; (d) that the defendants are willing to give an undertaking to this Court not to carry on any other business and not to use the trade name / trademark ‘EXON’ for any other business; (e) that though the defendants admit that the plaintiffs and their trademark ‘EXXON’ is famous and powerful but that does not entitle the plaintiffs to so restrain the defendants; (f) that the plaintiffs have already caused immense loss to the defendants by obtaining ex-parte ad-interim order against the defendants.
  9. Since the defendants also claim a registered trademark, I have enquired from the counsel for the plaintiffs as to how the defendants can be held to be guilty of the infringement under Section 29 of the Trademarks Act, 1999.
  10. The counsel for the plaintiffs has contended that the plaintiffs have prior registration also under Classes 9 & 16 and in fact the Registrar of Trademarks ought not to have granted registration of identical trademark in favour of the defendants. Reliance is also placed on Section 29(4) (b) & (c) of the Trade Marks Act, 1999 and it is contended that the registered trademark of the plaintiffs has reputation in India.
  11. I have drawn the attention of the counsel for the defendants to the fact that India now has a Petroleum University which till recently was located at Delhi though is now stated to have shifted to Dehradun, Uttrakhand and have enquired whether not the presence of the defendants, even if in the field of conducting online examination and online testing, is likely to convey an impression that the defendants have the support of the plaintiffs.
  12. The counsel for the defendants and the defendant No. 1 present in person have stated that the business / vocation of the defendants is a highly skilled one and the defendants are known for their skill set and have large corporates as their clients.
  13. The counsel for the plaintiffs has also contended that the defendants though claim registration in Classes 9 & 16 but are not using the trademark with respect to the said Classes and are instead using the trademark as stated by them also, for rendering services.
  14. Classes 9 & 16 are as under:

“9. Scientific, nautical, surveying, electric, photographic, cinematographic, optical, weighing, measuring, signalling, checking (supervision), life saving and teaching apparatus and instruments; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; automatic vending machines and mechanisms for coin-operate apparatus; cash registers, calculating machines, data processing equivalent and computers; fire extinguishing apparatus.

…….

  1. Paper, cardboard and goods made from these materials, not included in other classes; printed matter; book-binding material; photographs; stationery; adhesives for stationery or household purposes; artists, materials; paint brushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); playing cards; printers type; printing blocks.”
  2. On enquiry, as to in which Class the business as carried on by the defendants would fall, the counsel for the plaintiffs has drawn attention to Class 41 under the head ‘services’ which is as under:

“41. Education; providing of training; entertainment; sporting and cultural activities.”

  1. The counsel for the defendants on enquiry as to how the business of conducting online examination and online tests for corporate clients, which the defendants claim to be carrying on, falls in Classes 9 & 16 in which the defendants have registration has not been able to give a proper answer except for stating that the defendants devised the software for conducting the online examination. The defendant No. 1 present in person also states that the defendants also sell the software to the clients who want to conduct the online examination themselves. However, no pleadings to the said effect are being shown.
  2. On enquiry, as to why the defendants have chosen the name ‘EXON’, it is stated the word ‘EXON’ had been adopted as an abbreviation for ‘Examination Online’. On enquiry as to under what name the business was carried on from 2001 to 2008, the defendant No. 1 states that he has another company and was carrying on the subject business though in the name of ‘EXON’ but as a division of that other company.
  3. On the arguments aforesaid, particularly when there is an admission, of the trademark of the plaintiffs being famous and powerful, I am of the prima facie view that a case for continuation of the injunction orders as have already been granted and as recorded above, is made out. However, in an endeavour to settle the matter, I have enquired from the defendant No. 1 that if the defendant No. 1 settles, the plaintiffs can be directed to bear the costs of affecting the changes which the defendants will have to make and a time period of six months can be granted to the defendants to affect the changes, so that the defendants have ample time to inform their customers / clients of the impending change and can in the said time use both the names. I am also of the opinion that in the nature of the business which the defendants are carrying, it is the skill of the defendants, as the defendants themselves have claimed and not the brand of the defendants which would be relevant. Prima facie it also appears that the registration of the defendants will not come to the rescue of the defendants, as the business which the defendants claim to be carrying on at least at this stage cannot be said to be the business in the Classes in which the defendants claim registration.
  4. However, the defendant No. 1 states that since the turnover of his business ranges Rs.6-8 crores, he expects Rs.4-5 crores from the plaintiffs for stopping using the said name.
  5. The demand made by the defendant No. 1 indicates that the attempt of the defendant No. 1 is to extract money by adopting the trademark of the plaintiffs, though for a different business. The contention that the words ‘EXON’ and ‘EXXON’ are different cannot be accepted. A customer of the plaintiffs may not have paid attention whether the brand of the plaintiffs uses the alphabet ‘X’ singly or in double. What stays in the mind would be the word ‘EXXON’, the pronunciation of which remains the same, irrespective of whether the alphabet ‘X’ is used singly or doubly.
  6. Accordingly the ex-parte ad-interim orders dated 31st August, 2015 and 18th March, 2016 are made absolute.
  7. IA No. 17826/2015 of the plaintiff under Order XXXIX Rules 1&2 CPC is allowed in the said terms and IA No. 23396/2015 of the defendants under Order XXXIX Rule 4 CPC is dismissed.
  8. IA No. 6735/2016 of the defendants is also disposed of in above terms.
  9. On enquiry, it is stated that the defendants have since complied with the order dated 31st August, 2015 but are continuing to use the company name and no steps for change thereof have been taken.
  10. Though the defendants are in violation of the order dated 31st August, 2015 but it is deemed appropriate to dispose of IA No. 494/2016 under Order XXXIX Rule 2A CPC by granting yet further time of fifteen days to the defendants to initiate steps to have the name of the defendant No. 2 company changed, so that the word ‘EXON’ therefrom is deleted. If the steps are so initiated, the Registrar of Companies concerned is requested to expedite the change of name and to ensure that the same is done within a period of three months from the date of making of the application. The plaintiffs shall take all steps for ensuring that the name is so changed within the said time and will comply with all the requirements of the Registrar of Companies. If the defendants do not take the steps in this regard within the time aforesaid, the question of orders to be passed for violation of the orders will be considered.
  11. IA No. 494/2016 under Order XXXIX Rule 2A CPC is disposed of on above terms.
  12. On the pleadings of the parties, the following issues are framed:

(I) Whether the use by the defendants of the trademark ‘EXON’ as part of their trade name and for their business amounts to infringement of the registered trademark of the plaintiffs? OPP

(II) Whether the registration obtained by the defendants of the trademark ‘EXON’ is invalid? OPP

(III) If the above issues are decided in favour of the plaintiffs, to what reliefs, if any are the plaintiffs entitled to, including of damages and against which of the defendants? OPP

(IV) Relief.

  1. No other issue arises or is pressed.
  2. The plaintiffs have also applied under Section 124 of the Trademarks Act pleading that the plaintiffs, before the institution of the suit have instituted proceedings for rectification of the Register of Trademarks in relation to the defendants mark and the said proceedings are pending before the Registrar of Trademarks.
  3. The counsel for the defendants also admits the same.
  4. Accordingly, in accordance with Section 124(1) (b) (i) of the Trademarks Act, the proceedings in the present suit are stayed pending the disposal of the proceeding before the Registrar of Trademarks.
  5. Liberty is given to the counsels to apply for revival, as and when need arises.
  6. IA No. 3582/2016 under Section 124 of the Trademarks Act is disposed of on the above terms.