Full Text
HIGH COURT OF DELHI
Date of Decision: 12th November, 2024
AKTIEBOLAGET VOLVO & ORS. .....Plaintiffs
Through: Mr. Pravin Anand
Narula, Advocates.
(M): 9999052646 Email: shivang.s@anandandanand.com
Through: Mr. Jayant Kumar, Advocate.
JUDGMENT
1. With the consent of the parties, the matter is taken up for final adjudication.
2. The present suit has been filed seeking a decree of permanent injunction restraining infringement of registered trademark, passing off, rendition of accounts, delivery up, damages, costs, etc.
3. The case, as canvassed by the plaintiffs, is as under: 3.[1] The plaintiff nos. 1 to 3 (“plaintiffs”) are companies organized under the laws of Sweden having their registered offices at Goteborg, Sweden. 3.[2] Plaintiff no. 1, incorporated in 1915, commenced its business of assembling cars in April 1927 and trucks in 1928. Plaintiff no.1 executed a Global Deed of Assignment in favor of plaintiff no. 2, who became the subsequent proprietor of the plaintiffs‟ „VOLVO‟ trademark and subsequently licensed the same to plaintiff nos. 1 and 3, to use the same in relation to their respective businesses. 3.[3] The plaintiffs on 5th May, 1915 adopted the trademark/trade name „VOLVO‟, which is a coined and inherently distinctive trademark, solely associated with the plaintiffs. 3.[4] The plaintiffs are the registered proprietors of the trademark „VOLVO‟ in relation to vehicles and parts thereof, having registration of numerous „VOLVO‟ trademarks all over the world, including, in India in different classes, which are valid and subsisting. 3.[5] The plaintiffs‟ use of the trademark „VOLVO‟, in addition to its core business of transportation also extends to a wide range of ancillary products, services and businesses, including, the business of manufacturing, spare parts, accessories and ancillary parts for vehicles under the trademark „VOLVO‟.
3.6. The plaintiffs commercially launched their first „VOLVO‟ bus in India in 2001. The plaintiffs‟ intercity coaches traverse all major routes and operate in all major cities throughout India. In addition, the plaintiffs‟ Indian subsidiary exports „VOLVO‟ buses to Bangladesh and Sri Lanka. The plaintiffs‟ Indian subsidiary also exports VOLVO buses in the city segment to Europe. Presently, there are over 7,300 Volvo buses operating in the SAARC region, with about 5000 Volvo buses operating in India, alone. 3.[7] The plaintiffs had sold close to 2029 cars under the trademark „VOLVO‟ in India alone by the year 2017, whereas, global sales of cars under the VOLVO trademark/name, were close to 571,577 by the end of
2017. 3.[8] The plaintiffs‟ trademark „VOLVO‟ has been recognized as a wellknown trademark in India by the Trade Marks Registry pursuant to the Judgment delivered by Division Bench of the Bombay High Court in an Appeal titled Aktiebolaget Volvo Versus Volvo Steel Ltd., [1998 PTC (18) 47]. 3.[9] The plaintiffs have also spent a substantial amount of money every year towards the promotion, publicity and advertisement of their business under the trademark/trade name „VOLVO‟.
3.10 The plaintiffs enjoy common law rights in the „VOLVO‟ name and trademark due to the long-standing, continuous and extensive use of the trademark/trade name „VOLVO‟ by the plaintiffs across the world since 1915 and in India for many decades.
3.11 The defendant, Jonas Woodhead & Sons (India) Limited, is a private limited company which was incorporated on 8th March, 1963 with its registered office located at Chennai, Tamil Nadu, India. The defendant is a manufacturer of “Parabolic Springs, Leaf Springs and Spring Assemblies” and claims to be suppliers of Original Equipment Manufacturers of heavy and light commercial vehicles.
3.12 The defendant operates its website http://woodheadsprings.com and claims to be manufacturing inter alia parabolic and leaf springs and spring assemblies for trucks, trailers, buses, earth moving equipment, light and heavy commercial and passenger vehicles, etc.
3.13 The defendant also maintains its dedicated profile on the online merchant portal IndiaMart. The said profile proclaims that the defendant manufactures and sells “multi leaf springs” under the mark VOLVO, and claims that the said product is known for its „remarkable finish and quality‟.
3.14 The plaintiffs first learnt of the defendant‟s activities sometime in June 2019, when they got to know from market sources that the defendant was claiming to be selling VOLVO branded products to the public.
3.15 Upon investigation into the defendant‟s activities, the plaintiffs‟ representatives around the last week of November 2019, concluded that the products were not only infringing, but were of inferior quality and thus, could not even be considered as genuine replacements to the original products manufactured by the plaintiffs.
3.16 Upon further investigation, it was revealed that the defendant had expanded the scope of its operations, and had listed an additional product on its profile on www.indiamart.com, besides the one which the plaintiffs had identified previously.
3.17 The plaintiffs through personal inspection by its representatives confirmed that the multiple products of the defendants are non-genuine products, which not only make unauthorized use of the plaintiffs‟ VOLVO trademark, but also produces products of inferior quality, which brings disrepute to the VOLVO trademark, which is associated by the public as offering products of extremely high quality.
3.18 Thus, the present suit has come to be filed. 4.[1] On behalf of the plaintiffs, it is submitted that the plaintiffs are the prior user and registered proprietor of the trademark „VOLVO‟, with its earliest registration dating back to the year 1975, for the mark „VOLVO‟ in India in Class 7 under registration no. 308314 with respect to automobiles. 4.[2] It is submitted that the plaintiffs enjoy sole and exclusive rights to use the said trademark, or any of its variants or formative trademarks, in relation to similar products. Moreover, the well-known recognition conferred upon the plaintiffs‟ trademark „VOLVO‟ ensures that the said trademark is entitled to the strongest and broadest form of protection against misuse by third party entities, even in relation to goods and services, which are different from those of the plaintiffs. 4.[3] It is submitted that the defendant‟s products are of an inferior quality and once employed in vehicles, they can significantly reduce not just the quality of the ride and the comfort to the driver, but they can significantly impact the very maintenance and wear and tear of the vehicle itself. 4.[4] It is submitted that the lack of features in the defendant‟s products can contribute to a stiffer ride and low comfort to the driver, increased vibrations during driving and consequential damage to other components due to transfer of shock loads. Therefore, trucks and vehicles which make use of the defendant‟s infringing leaf springs will have to undertake higher maintenance and will face a greater wear and tear. 4.[5] It is submitted that the aforesaid acts of the defendant are detrimental to the distinctive character and reputation of the plaintiffs‟ registered and well-known trademark and such acts constitute infringement under section 29(8) of the Trade Marks Act, 1999. 4.[6] It is submitted that the plaintiffs have sustained significant dilution and tarnishment of its „VOLVO‟ trademark/name, as well as erosion of goodwill and reputation, associated thereto. The plaintiffs are suffering from loss of exclusivity associated with its „VOLVO‟ name/trademark by diluting a customer‟s capacity to identify the plaintiffs‟ business, solely from its coined and well-known trademark/name „VOLVO‟.
5. When the suit came up for hearing, this court vide order dated 04th August, 2021, while issuing summons, granted an ex parte ad interim injunction restraining the defendant from using the mark „VOLVO‟ or any other name/mark confusingly or deceptively similar to the plaintiffs‟ mark. The aforesaid injunction order was made absolute vide order dated 06th February, 2023.
6. This court notes that vide order dated 04th August, 2021, the Court had also appointed a Local Commissioner to visit the premises of the defendant and to make an inventory of the impugned products bearing the infringing mark. Upon execution of the local commission on 13th August 2021, a total of 889 infringing products were found at the premises, which were subsequently sealed. Relevant portions of the Local Commissioner‟s Report, read as under: “xxx xxx xxx
9. It is submitted that total 889 infringing marks in relation to Parabolic Leaf Springs 1st Axle, Parabolic Leaf Springs 2nd Axle, Bogie Gear, Bogie 32 Tons Rear, Shift FMX Parabolic front were found at the said premises and an inventory of all the seized products were drawn as directed by this Hon’ble Court. The copy of the inventory is annexed herein as Annexure L-2.
10. It is stated that 889 infringing products found at the said premises were duly seized, taken into custody and confiscated and subsequently sealed. In compliance of the orders passed by this Hon’ble Court, the undersigned had asked Mr. Abhishek Modi to provide the stationary, seal/rubber stamps, cash memo, bill books, vouchers, printed matter, catalogues, pamphlets, letter heads bearing the mark VOLVO. Mr. Modi refused to provide the same and stated that he is not in possession of any of the said material/documents. The copy of the photographs taken during the raid is annexed herein as Annexure L-3. xxx xxx xxx” (Emphasis Supplied)
7. This Court notes that vide order dated 8th April, 2022, this Court had allowed the defendant to remove the name/mark VOLVO from the 889 infringing leaf springs that were seized during the local commission.
8. When the matter was listed on 25th April 2022, it was assured by learned counsel for the defendant that all the products which are sold would bear the mark „WOODHEAD‟ when they enter the market, and the word „VOLVO‟ would not be appearing on the said products. The court in the said order dated 25th April, 2022 had recorded that since the seized products do not now bear the mark „VOLVO‟ in any manner, the defendant was permitted to dispose of the same in its usual course of business, subject to deposit of a sum of Rs.7,50,000/- with the Registrar General of this Court, which shall be retained in an FDR in auto-renewal mode.
9. This court further notes the statement of Mr. Abhishek Modi (Director of the defendant), as recorded on 13th January, 2023 wherein, on interrogation, he had stated that his company i.e., the defendant has completely stopped the use of the mark „VOLVO‟ and that the company does not have any interest in using the mark „VOLVO‟ as it was only at the customers‟ request that the same was being put on the products. Relevant portion of the said statement, is as under: “xxx xxx xxx I have been shown the brochure placed at page 40 of the Plaintiffs documents, and I state that the same was created sometime between 2016 to 2018 and it was per chance that products bearing the name 'Volvo' got photographed by the photographer. However, this brochure has been discontinued. I state that most of the products are sold under the company's brand name i.e., 'Woodhead'. Considering that the commercial vehicles which are manufactured by Volvo are mostly used in mines, it is only upon the distributors request that the word 'Volvo' is added on the products. After explaining to the distributors that the word Volvo cannot be added by the company, only the model number was being put on the products. Further, after the order passed by the Court, my company has completely stopped the use of the mark 'Volvo'. In fact, my company does not have any interest in using the mark 'Volvo' and it was only at the customers' request that the same was being put on the products. xxx xxx xxx” (Emphasis Supplied)
10. During the course of hearing today, i.e., 12th November, 2024, learned counsel appearing for the defendant has submitted that the defendant is ready to suffer a decree of permanent injunction.
11. This court notes that on account of priority in adoption of the „VOLVO‟ trademark/trade name in 1915, coupled with over a century of extensive and continuous use thereof on a global scale, the plaintiffs exercise strong common law rights in the said trademark and trade name. Further, the goodwill and reputation enjoyed by the plaintiffs is demonstrated by the number of products sold under the „VOLVO‟ trademark/trade name worldwide, and in India.
12. Perusal of the documents on record show that defendant has blatantly made use of an identical name/mark in relation to identical goods i.e., leaf springs, axles and other parts used in the plaintiffs‟ heavy vehicles. Thus, there is no doubt that the very purpose behind the defendant‟s use of the identical trademark was to mislead the public into thinking that the defendant manufactures and sells genuine products of the plaintiffs, and that the plaintiffs have authorized the defendant‟s activities.
13. In view of the aforesaid discussion, and the statement made on behalf of the learned counsel for the defendant, expressing his readiness to suffer a decree of injunction, the plaintiffs are entitled to a decree of permanent injunction in their favor and against the defendant.
14. Further, it is to be noted that the local commission executed at the defendant‟s premises, clearly shows the vast extent and magnitude of the defendant‟s infringing activities. This Court on numerous occasions has held that when the report of the Local Commissioner is not challenged by any party, the same can be treated as evidence whilst passing a judgment summarily. In view of the fact that the defendant is guilty of infringement, by dishonestly adopting the identical trademark and the extent of infringing products seized from the defendants premises, the plaintiff is entitled to costs and damages.
15. Accordingly, the following directions are issued:-
I. The suit is decreed in favour of the plaintiffs and against the defendant in terms of Para 81(i) of the plaint.
II. The amount of ₹7,50,000/- deposited by the defendant with the be released to the plaintiffs.
III. Further, amount of ₹10,00,000/- shall be payable by the defendant to the plaintiffs, towards costs and damages.
16. Considering the request made by learned counsel appearing for the defendant, the amount of ₹10,00,000/-, shall be paid by the defendant to the plaintiffs, within a period of four months from today.
17. At request of the learned counsel appearing for the plaintiffs, it is directed that the aforesaid amount shall be paid to the plaintiffs through their counsel, who shall be at liberty to remit the said amount to their clients based out of the country, in accordance with law.
18. The matter is directed to be placed before the Registrar General of this Court for receiving the amount deposited with the Registrar General of this Court, by the plaintiffs, on 25th November, 2024.
19. Decree sheet be drawn up.
20. The present suit, along with the pending application, stands disposed of, in terms of the aforesaid. MINI PUSHKARNA, J NOVEMBER 12, 2024 c