Full Text
HIGH COURT OF DELHI
Date of Decision: 4th October, 2024
UBE INDUSTRIES LIMITED & ANR. .....Plaintiffs
Through: Mr. Prithvi Singh, Mr. Prithvi Gulati and Mr. Ritwik Marwaha, Advs.
M: 9999845680, 8802958896 Email: litigation@fiduslawchambers.com
Through: None.
Code of Civil Procedure, 1908 (“CPC”) read
CPC.
JUDGMENT
1. The present application has been filed on behalf of the plaintiffs seeking a summary judgment under Order XIII-A, Rule 2 read with Section 151 of CPC in the present suit bearing CS (COMM) No. 807/2017, which has been filed against the defendants for, inter alia, seeking permanent injunction restraining infringement of its trademark, passing off, damages, rendition of accounts, and delivery up.
2. The case as set up by the plaintiffs in the plaint is as follows: 2.[1] The plaintiff no. 1 company was incorporated in 1942 by amalgamation of four pre-existing Ube entities – Ube Nitrogen Industry Ltd, Ube Cement Production Ltd, Ube Shinkawa Iron Works, and Ube Mining the last of which commenced business as far back as 1897. 2.[2] Plaintiff no. 2 is plaintiff no. 1‟s wholly owned subsidiary in India and is a company which was incorporated in 2012 under the Companies Act,
1956. 2.[3] The plaintiffs have been carrying on business in India under the trademark UBE for over 45 years. Its activities include developing a wide range of advanced business solutions and by manufacturing a large variety of state-of-the-art products in fields such as chemicals and plastics, specialty chemicals and products, pharmaceuticals, cement and construction materials, machinery and metal products, energy, and environment. 2.[4] The plaintiffs are the registered proprietor in India of a number of trademarks using „UBE‟ and „UBE Industries‟ since 1973. By virtue of its long standing and widespread business and use, the plaintiffs‟ trademarks „UBE‟ and „UBE Industries‟ are „well-known‟ marks and have distinctive reputation in India. 2.[5] In connection with its services, the plaintiff no. 1 also owns and operates the websites www.ube-ind.co.jp and www.ube.co.in. The domains associated with these websites were registered as far back as 1996. 2.[6] A number of publications/ directories both of foreign and Indian origin having circulation in India have written about the plaintiff or have listed the plaintiff company. 2.[7] In the month of October 2016, plaintiff no. 2 received a copy of a letter from defendant no. 1 on behalf of defendant no. 2 addressed to The plaintiff no. 2's company name, without disclosing any reasons for such rectification. Pertinently, defendant no. 2 changed its own name in 1996 to incorporate the word „UBE‟ in it. 2.[8] Pursuant to the defendant‟s letter, the plaintiffs started ascertaining the details about the defendants through various modes on the internet and conducted an on-site investigation, which revealed that the defendant no. 1 had incorporated defendant nos. 2 to 6, but was not conducting any business under any of the said companies. 2.[9] Plaintiff no. 2 was then served a notice on 2nd November, 2017 to appear before the Regional Director (Northern Region), Ministry of Corporate Affairs, New Delhi on 30th November, 2017 for the said matter.
2.10 Plaintiffs accordingly sent a legal notice dated 7th November, 2017 to defendant no. 1 to put the defendants on notice on their rights in the trademarks UBE to which the plaintiffs did not receive any reply.
2.11 The defendants are using the plaintiffs‟ „UBE‟ trademark, with the earliest document being a provisional SSI Registration Certificate of 30th September, 1988 to support their use as a trade name, which is subsequent to the plaintiffs‟ use and registration of the mark UBE.
2.12 A copy of the Invoice dated 20th January, 1972 issued for UBE branded Coprolactumin India has been filed along with the present suit which demonstrates the use of the trademark UBE since at least 1972 in India in respect of plaintiffs‟ products.
2.13 Defendants filed their updated annual returns and disclosed their turnover. From the annual returns of 2016-17, it appears that defendant NO. 2's turnover for the financial year is only Rs. 5,47,283/-. Therefore, no bona fide business operations are being carried out by the defendants for them to successfully claim any relief in equity.
2.14 Being aggrieved by the adoption by the defendants of the registered trademark of the plaintiffs and the registration of the domain www.ubeindia.com and www.ubeindustries.com amounting to infringement and passing off, the present suit has come to be filed.
3. This Court vide order dated 23rd November, 2017, granted an ex parte ad interim injunction in favour of the plaintiffs, thereby restraining the defendants from using the plaintiffs‟ registered trademark UBE in any manner including manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in goods and/or services bearing the plaintiffs‟ registered trademark UBE, which injunction order was confirmed vide order dated 03rd April, 2018.
4. Aggrieved by the said order, the defendants filed an appeal being FAO (OS) (COMM) 92/2018, which was disposed vide order dated 18th May 2018, wherein, the said injunction was consensually modified to the effect that the defendants were directed to incorporate a disclaimer that they are in no way related to the plaintiffs.
5. The plaintiffs have filed the present application, being I.A. 11341/2018, in the aforesaid suit seeking summary judgment under Order XIII-A read with Rule 2 of CPC, against the defendants.
6. Learned counsel appearing for the plaintiffs has made detailed submissions before this Court and has relied upon various judgments to submit that the defendants have failed to put up a credible defence and hence, the present suit ought to be heard and decided under the summary procedure as prescribed under Order XIII-A CPC, without the necessity of a full trial.
7. On the other hand, the defendants in their reply to the aforesaid application, have contended that the defendant no.1 is the prior user of the name UBE having used the same since 1988. The defendant no. 1 coined the name UBE from the acronym of Udaya Bharathi Enterprises, which was the entity established by the defendant no. 1 in 1981. The said name UBE has been continuously used by the defendant no. 1 as part of the trade name of his entities/companies since 1988.
8. It has been further submitted that the business of the plaintiffs is completely different to the business of the defendants who are engaged in the Design, Manufacture, Commissioning and Installation of special purpose machine tools and Tooling Systems (Jigs & Fixtures) and Manufacturing of Welding Consumables and Welding Equipment & Machineries. Therefore, goods/services provided by the defendants are dissimilar to those provided by the plaintiffs and hence, there can be no likelihood of confusion. Trade channels are different and the consumers are sophisticated which eliminates the possibility of confusion with regard to the source of products/goods.
9. I have heard learned counsel for the plaintiffs and have perused the record.
10. At the outset, this court notes that notice in I.A. 11341/2018 was issued by the court on 21st February 2023. Further, on the very same date, counsel appearing on behalf of the defendants had sought for and was granted discharge from appearing in the present suit. Subsequently, some other counsel appeared on behalf of the defendants, and presence of the said counsel is recorded in the order dated 16th August, 2023, 31st October, 2023 and 19th January, 2024. After 19th January, 2024, there has been no appearance on behalf of the defendants, despite the matter being taken up for hearing on several dates.
11. This court notes that the plaintiff no. 1, being the registered proprietor of the trademark UBE in India has been carrying on business under the said trademark for more than 50 years.
12. The plaintiffs are the registered proprietors of a number of trademarks using „UBE‟ and „UBE Industries‟ since 1973 in India, the details of which, as given in the plaint, are reproduced as under:
13. It is to be noted that various publications of both foreign and Indian origin having circulation in India have listed the plaintiff company, which shows that public/consumers in India have been aware of the plaintiffs and the plaintiffs‟ trademark UBE for nearly five decades. Relevant extracts of the said publications, are as under:
14. The relevant extracts of the sales figure of the plaintiffs in India, are as under:
15. It is to be noted that the defendants have claimed prior use of the acronym UBE as a tradename in India since 1988. However, this assertion is clearly contradicted by the evidence, which shows that the plaintiffs have used the trademark UBE in India since at least 1972. The invoice of January, 1972 filed by the plaintiffs, as available on record, is reproduced hereunder:
16. Similarly, registration certificate for the mark and device UBE showing registration date as 12th November, 1973 and certificate date as 23rd March, 1977, as placed on record, is reproduced as under:
17. The aforesaid documents clearly establish the prior user of the mark in question by the plaintiffs.
18. This court further notes that the defendants have placed on record, a document supporting their use of their trade name, which is only a provisional Small Scale Industries (“SSI”) Registration Certificate of 30th September, 1988, which is subsequent to the plaintiffs‟ use and registration of the mark UBE.
19. Perusal of the documentary evidence filed by both parties, shows that the plaintiffs have been using the trademark UBE continuously and uninterruptedly since 1972, whereas, on the other hand, the defendant is only a subsequent user. There is no document on record to support the claim of the defendants, of use of the trademark/ tradename UBE that establishes a prior right over the plaintiffs.
20. It is also to be noted that the defendants have admitted to actual confusion on account of business enquiries from potential consumers of the plaintiffs to them. In this regard, reference may be made to the letter dated 6th October, 2016 written by the defendant company to the Registrar of Companies, wherein, they have stated in clear terms that they received some enquiries whether the defendant company and the plaintiff company, are one. Thus, a clear case of passing off by the defendants stands admitted and proved. The letter dated 6th October, 2016, is reproduced as under:
21. While holding that a subsequent user cannot claim to generate goodwill in the market by misrepresenting their own business as that of the prior user‟s, this court in the case of KBM Foods Pvt. Ltd. v. Sachin Gupta, 2021 SCC OnLine Del 2771, has held as under: “xxx xxx xxx
49. Having heard the learned counsel for the parties and perused the record, the issue which arises for consideration in this application is whether the plaintiff is entitled to injunction against the defendant from manufacturing, marketing, selling, offering for sale the goods, i.e., spices by using the mark „GAI CHAAP‟ with „COW‟ device and other essential features of the label and trade dress of the plaintiff's mark „KBM‟, „GAI CHAAP‟ with „COW‟ device. In support of its case that it is the prior user of the „GAI CHAAP‟ with „COW‟ device, the plaintiff has relied upon various documents. Suffice to state, this Court in CS(COMM) 51/2018 filed by the plaintiff against one Subhash Tayal and Anr., has held that plaintiff has been using the mark „GAI CHAAP‟ with „COW‟ device for spices since 2004. So, proceeding on that premise and it is the case of defendant herein that he is using the mark „GCMC‟ with cow device since 2017, it is clear that the plaintiff is the prior user of the „COW‟ device in relation to spices and as a prior user, certain rights flow in favour of the plaintiff. I may state here that it is the case of the plaintiff that it has registration in the mark since 1969, through its predecessor-in-interest. In any case, the plaintiff's case is also that it got the mark registered, through application No. 2802285 in the year 2013, which is also before 2017. The Supreme Court in the case of S. Syed Mohiden (supra) relied upon by Mr. Bakhru has in Para 31.[2] held as under: “31.2. The applicability of the said principle can be seen as to which proprietor has generated the goodwill by way of use of the mark/name in the business. The use of the mark/carrying on business under the name confers the rights in favour of the person and generates goodwill in the market. Accordingly, the latter user of the mark/name or in the business cannot misrepresent his business as that of business of the prior right holder. That is the reason why essentially the prior user is considered to be superior than that of any other rights. Consequently, the examination of rights in common law which are based on goodwill, misrepresentation and damage are independent to that of registered rights. The mere fact that both prior user and subsequent user are registered proprietors are irrelevant for the purposes of examining who generated the goodwill first in the market and whether the latter user is causing misrepresentation in the course of trade and damaging the goodwill and reputation of the prior right holder/former user. That is the additional reasoning that the statutory rights must pave the way for common law rights of passing off.”
50. So, from the above ratio it must be held that prior user generates goodwill first in the market and later user cannot misrepresent his business as that of the prior user/holder. Therefore, any goodwill generated by the defendant is because of the dishonest adoption of the impugned mark which is subsequent to the plaintiff's adoption of the said mark. Mr. Bakhru is also justified in relying upon the judgments on similar proposition, in the case of N.R. Dongre (supra), Eicher Goodearth Pvt. Ltd. (supra), Century Traders (supra), Ropi Industries (supra). So also, a Coordinate Bench of this Court in the case of AZ Tech (India) v. Intex Technologies (India) Ltd., (2017) 70 PTC 118 (Del.) has held that in order to succeed in a case of passing of, the plaintiff must establish prior rights over the defendants (in that case) and went on to hold as under: “77…… it is clear that in an action of passing off, prior user remains the ultimate test. This is subject to one exception being that a mere casual, intermittent or experimental use may be insufficient to sustain an action of passing off. This is so as the intention to adopt the mark as a trade mark may not be established to sustain a priority claim. This is what led to the Supreme Court in Uniply Industries Ltd. (Supra) observing that “on some other occasions courts have classified small sales volume as so small and inconsequential for priority purposes.” Accordingly, for establishing priority at an interim stage it may not be necessary to show substantial sales or advertisements but, at the same time, sufficient enough for the courts to come to a strong prima facie opinion that there was a clear intention to adopt the mark for the particular goods.” xxx xxx xxx” (Emphasis supplied)
22. This court further holds that mere registration of a tradename is not a sufficient counter to an action for infringement or passing off. It is neither proof of prior use, as claimed by the defendants nor honest concurrent use. While holding that registration merely recognises the rights, which are already pre-existing in common law and do not create any rights, a coordinate bench of this court in Vinita Gupta v. Amit Arora, 2022 SCC OnLine Del 3249 has held has under:
15. The question that arises is whether Plaintiff can make a claim of passing off against the Defendant in view of the latter being a registered proprietor of the impugned trademark. This position of law is no longer res integra. The Supreme Court in S. Syed Mohideen (supra), while deciding the interplay of Section 27(2) and Section 28(3) of the Act has held that the answer to the question would be in the affirmative. The reasons postulated by the Supreme Court while coming to the said conclusion can be summed up as: (a) conjoint reading of Sections 27, 28, 29 and 34 of the Act would show that rights conferred by registration are subject to rights of the prior user of the trademark; (b) right of action of any person for passing off the goods/services of another person and remedies thereof are not affected by the provisions of the Act, since rights of passing off emanate from common law and are not statutory; (c) rights of registration are subject to Section 34, which is evident from the opening words of Section 28 and Scheme of the Act is such where rights of prior user are recognised as superior than those of a registered proprietor, as an action for passing off is premised on the rights of a prior user generating a goodwill; (d) passing off is a common law right for protection of goodwill in business against misrepresentation, caused in the course of trade and is an action in deceit, predicated on the general principle that no person is entitled to represent his or her business as business of another person; and (e) registration is no defence to passing off action and the rights conferred under Section 28 are subject to provisions of Section 27(2), since registration merely recognises the rights which are already pre-existing in common law and do not create any rights. Therefore, registration of the trademark of the Defendant is irrelevant in an action for passing off. In the light of this binding dictum of the Supreme Court, in my view, Plaintiff is entitled to file a suit alleging passing off against the Defendant independent of and de hors the fact that Defendant is a registered proprietor of the impugned mark NUAPPLEPLANT. (Emphasis Supplied)
23. Similarly, while holding that mere registration for a mark by the defendants will not by itself preclude the plaintiffs which hold an earlier registration of the trademark from seeking to restrain the defendants from infringing the plaintiffs‟ marks, the court in Bloomberg Finance L.P Versus Prafull Saklecha & Ors; 2013 SCC OnLine Del 4159, has held as under:
58. While the Defendants may hold registration for the mark BLOOMBERG in Class 43, that by itself will not preclude the Plaintiff, which holds an earlier registration in other classes from seeking to restrain the Defendants from infringing the Plaintiffs marks. While the case of the Plaintiff that the registration obtained by the Defendants is of doubtful validity will require a detailed examination, the manner of the Defendant obtaining such registration after a cease and desist notice was issued to it lends prima facie merit to the contention of the Plaintiff. In support of such submission the Plaintiff has in its written submissions referred to the decision of the Single Judge in Clinique Laboratories v. Gufic Ltd. 2009 (41) PTC 41 (Del) as well as the decision in Gufic Ltd. v. Clinique Laboratories 2010 (43) PTC 788 (Del) which did not interfere with the decision under appeal to the extent it held that where the Court is prima facie of the view that the registration of the Defendant was invalid an interim injunction restraining infringement could be granted.
24. From the averments made in the plaint and the documents filed therewith, the plaintiffs have established that they are the prior users and registered proprietors of the UBE trademarks. The plaintiffs have also been able to show their goodwill and reputation in respect of the UBE trademarks in India and abroad.
25. It is to be noted that the defendants had last appeared before this Court on 19th January 2024, and have failed to appear since then and contest the matter. Thus, it is evident that the defendants have nothing substantial to submit in order to defend their case.
26. Holding that the Courts are empowered to deal with an application under Order XIII-A of CPC and grant a summary judgment, where the defendants have no real prospect of successfully defending their claim, and when there is no other compelling reason why the case should not be disposed of without the necessity of trial, this Court in the case of Su-Kam Power Systems Ltd. Versus Kunwer Sachdev and Another, 2019 SCC OnLine Del 10764, has held as under:
90. To reiterate, the intent behind incorporating the summary judgment procedure in the Commercial Court Act, 2015 is to ensure disposal of commercial disputes in a time-bound manner. In fact, the applicability of Order XIIIA, CPC to commercial disputes, demonstrates that the trial is no longer the default procedure/norm.
91. Rule 3 of Order XIIIA, CPC, as applicable to commercial disputes, empowers the Court to grant a summary judgement against the defendant where the Court considers that the defendant has no real prospects of successfully defending the claim and there is no other compelling reason why the claim should not be disposed of before recording of oral evidence. The expression “real” directs the Court to examine whether there is a “realistic” as opposed to “fanciful” prospects of success. This Court is of the view that the expression “no genuine issue requiring a trial” in Ontario Rules of Civil Procedure and “no other compelling reason…..for trial” in Commercial Courts Act can be read mutatis mutandis. Consequently, Order XIIIA, CPC would be attracted if the Court, while hearing such an application, can make the necessary finding of fact, apply the law to the facts and the same is a proportionate, more expeditious and less expensive means of achieving a fair and just result.
27. Considering the detailed discussion hereinabove, the plaintiffs have established case in their favour for grant of decree of permanent injunction in their favour.
28. It is to be noted that the plaintiffs have not pressed for any damages, but have only pressed for the costs of the suit. Accordingly, in the facts and circumstances of the present case, this Court is of the opinion that the interest of justice shall be served in awarding costs in favour of the plaintiffs.
29. In view of the aforesaid, the present suit is decreed in favour of the plaintiffs and against the defendants, in terms of Para 40 (i), (ii), (iii) & (vi) of the plaint.
30. The plaintiffs are held entitled to actual costs, recoverable jointly and severely from the defendants. The plaintiffs shall file their bill of costs in terms of Rule 5 of Chapter XXIII of the Delhi High Court (Original Side) Rules, 2018, within a period of two months from today. As and when the same is filed, the matter will be listed before the Taxing Officer for computation of costs.
31. Decree sheet be drawn up.
32. The present suit, along with pending applications is disposed of. MINI PUSHKARNA, J OCTOBER 4, 2024 (Corrected and released on 23rd October, 2024)