M/S. DELHI MARKETING v. ZYDUS WELLNESS LIMITED

1. This appeal by appellant (original plaintiff) seeks to impugn order dated 8th January, 2023 passed by the learned Trial Court[1] dismissing its application under Order XXXIX rules 1 & 2 read with Section 1512 of The Code of Civil Procedure, 1908[3] against the respondent (original defendant).

2. Succinctly put, appellant after its constitution on 25th December, 2015, commenced business of trading in Fast Moving Consumer Goods like Hereinafter referred as “impugned order” Hereinafter referred as “interim application” Henceforth referred as “CPC” edible oil, dairy and dairy products, beverages and other allied and cognate goods under various marks. One, Kwality Limited[4], the predecessor of the appellant herein, also engaged in dealing in various Fast Moving Consumer Goods, particularly in different types of milk and milk products, was the owner of the trademark „SUGARLITE‟ for Class 29 products since 2003. The said predecessor, vide a Deed of Assignment in 2016, assigned the trademark „SUGARLITE' along with its goodwill to the appellant. Thereafter, the appellant appointed the predecessor as a permitted user/ licensee of the trademark „SUGARLITE‟ till 31st December, 2018 and then appointed one Goodhealth Industries Private Limited as a subsequent permitted user/ licensee. Interestingly, prior thereto, though the predecessor of appellant had filed an application for seeking registration of the same trademark „SUGARLITE‟ in Class 30 vide application No.2739962, however, the same was refused due to non-appearance of its nominated Advocate. As there is no conflicting mark to that of „SUGARLITE‟ of the appellant pending or registered in either Class 29 or Class 30, the use of an identical and/ or deceptively similar trademark by the respondent in respect of similar and/ or allied and cognate goods without its permission tantamounted to violation of both common law rights and the statutory rights under The Trade Marks Act, 1999[5].

3. Thereafter, the respondent commenced negotiations with the predecessor for assignment/ license of the said trademark „SUGARLITE‟ in April 2018 and upon its failure applied for registration of the impugned mark „SugarLite‟ in Class 30 vide application No.3192344 before the Trade Mark Registry, who, vide its Examination Report objected to its registration citing the already registered trademark „SUGARLITE‟ of the appellant. The Hereinafter referred as “predecessor” Hereinafter referred as “TM Act” appellant then filed pre-publication objections against the said impugned mark „SugarLite‟ of respondent and also issued a Cease & Desist Notice dated 12th September, 2019 to the respondent leading to an exchange of letters until 17th March, 2020 and then finally instituted a suit for permanent injunction, restraining infringement of trademark, passing off, damages and rendition of accounts before the learned Trial Court seeking appropriate reliefs for restraining the respondent and others from using the impugned mark „SugarLite‟ or any other identical and/ or deceptively similar mark as that of the registered trademark „SUGARLITE‟ of the appellant.

4. The respondent in its written statement contended to be dealing in health and wellness products under various trademarks and that it had honestly and bona fidely coined the word „SugarLite‟ which was an extension of its already registered trademark „SUGAR FREE‟ and also that it was visually and structurally different from that of the appellant and further the competing marks were used for different class of goods as the trademark „SUGARLITE‟ of appellant was for milk/ dairy products falling in Class 29 whereas the impugned mark „SugarLite‟ of respondent was for sugar sweetener, a blend of sugar and stevia, falling in Class 30. Further, the respondent relying upon Vishnudas Kushandas v. Tah Vazir Sultan Tobacco Ltd & Anr[6] and Nandhini Delux v. Karnataka Cooperative Milk Producers Federation Limited[7] stated that appellant cannot have monopoly over the entire Class and that there was a delay in filing the suit.

5. The learned Trial Court after recording that though negotiations did not materialize inter-se the parties, however, held that “the defendant coined the mark SugarLite in the year 2018… …”, did not agree with the contentions of appellant that the competing marks were deceptively similar 366 1996 SCALE (5)267 or that the goods of the parties were cognate/ allied or that they were sold at the same shops to the same class of customers and distributed through the same channels and held that the competing marks were used for totally different class of products. Relying upon Nandhini (Supra) and National Sewing Thread Co. Ltd v. James Chadwick and Bros,[8] the learned Trial Court held that not only was the visual appearance of the two marks different but they also related to different class of products and the manner in which the parties were trading, there would be no likelihood of confusion and further that the appellant never gave any sales or expenditure figures qua promotion of the trademark „SUGARLITE‟ and that the trademark „SUGARLITE‟ was not a well-known trademark within the meaning of Section 2(zg) of the TM Act. Lastly, holding that the appellant on the strength of its trademark „SUGARLITE‟ could not claim monopoly over the entire class of goods, the learned Trial Court dismissed the interim application of appellant. However, the learned Trial Court did not give any benefit of delay/ latches/ acquiescence to respondent.

6. Aggrieved thereby, the appellant filed the present appeal primarily contending that the learned Trial Court has erred in observing that the respondent “coined” the impugned mark „SugarLite‟ in 2018 and also that the competing marks are not deceptively similar as the competing goods are not totally different and are being sold together and further that the visual appearance of the competing marks is different.

7. Learned senior counsel for the appellant contended that reliance upon Vishnudas Kushandas (Supra) by the learned Trial Court is misplaced and the finding qua different trade channels and that there being no likelihood of confusion is wrong as the real test was whether the goods are cognate and AIR 1956 SC 357 allied and not with regard to the class in which they fall. Further, the sales and expenditure figures of the trademark „SUGARLITE‟ by appellant were irrelevant, especially, at the time of adjudicating an interim application in a suit of present nature, since the learned Trial Court in a suit for infringement, ignored the relevant factors of appellant being a prior adopter and user thereof who was holding a valid registration. It was also contended that the fact that respondent adopted the impugned mark „SugarLite‟ after negotiations with the predecessor of appellant failed to show that the adoption thereof by it was bona fide and that Section 17 of the TM Act has no relevance to the facts of the present case.

8. Per Contra, learned senior counsel for respondent supporting the impugned order, on the strength of non-filing of the Deed of Assignment inter-se the predecessor and appellant, primarily contended that appellant was not the owner of the trademark „SUGARLITE‟ and that the respondent coined the word „SugarLite‟, which was an extension of its prior registered trademark „SUGAR FREE‟ and that the conflicting marks being different are anyways used for different class of goods and that there was delay in institution of the suit by appellant.

9. The rest of the contentions raised qua dishonest adoption and nonusage of the trademark „SUGARLITE‟ by appellant and the respondent being a prior adopter of the trademark „SUGAR D‟LITE‟ and the trademark „SUGARLITE‟ of the appellant being a copy of the trademarks „SUGAR FREE‟ and „NUTRALITE‟ of respondent and the respondent being the owner of LITE ending trademarks cannot and need not be considered, as there were no pleadings to that effect before the learned Trial Court. This Court in Jain Shikanji (P) Ltd. vs. Satish Kumar Jain[9], has 2023 SCC OnLine Del 1241 recently held so, observing that as the proceedings before the Appellate forum of subsequent instance are nothing but an extension/ continuation of the earlier proceedings before the original Court of first instance, no party like the appellant herein can be allowed to improve/ built upon its case. In view thereof, finding no merit in the said contentions, the same are rejected by this Court.

10. Learned senior counsel for the appellant then apprised this Court that the respondent had, three months after passing of the impugned order, during the pendency of the present appeal, filed a petition under Section 57 and 47 of the TM Act for expunging/ removal of the registered trademark „SUGARLITE‟ of the appellant10. As the said rectification petition has been filed recently after passing of the impugned order, the same cannot be considered by this Court, as it was not before the learned Trial Court. As such the said rectification petition is of no relevance for the purposes of adjudication of the present appeal. Learned senior counsel for respondent then prayed that as the trial before the learned Trial Court has already commenced, it would be in the interest of parties to relegate them before it.

11. Learned senior counsel for the appellant in rejoinder, objecting to the fresh contentions raised before this Court, contended that admittedly appellant is the recorded owner/ registered proprietor of the trademark „SUGARLITE‟ in Class 29 which is validly subsisting and renewed in the name of appellant. It was also submitted that, admittedly, the respondent had approached the predecessor of appellant for negotiations qua assignment/ license of the said trademark „SUGARLITE‟ and that the respondent adopted and commenced using the impugned mark „SugarLite‟ only after the negotiations failed. According to learned senior counsel for Hereinafter referred as “rectification petition” appellant, in view of the aforesaid, the appellant was entitled to the interim injunction.

12. Based on the contentions raised by learned senior counsel for both the parties, this Court after hearing them and perusing the various documents and considering the law involved is of the opinion that since the present appeal arises from an impugned order involving an interim application, the scope for determination involved before the learned Trial Court was based upon three basic tests of, there being a prima-facie case, irreparable harm, loss and injury and balance of convenience. So, this Court has to examine whether the appellant was able to fulfill the above three conditions so as to make out a case in its favor and against the respondent.

13. The facts reveal that, admittedly, appellant is the recorded registered proprietor of the valid and subsisting trademark „SUGARLITE‟ in Class 29 and the respondent, despite knowledge thereof, instead of challenging the same approached its predecessor in April 2018 for negotiations and thereafter upon failure of talks, filed an application for registration of the impugned mark „SugarLite‟ in Class 30 to which the appellant filed prepublication objections. The facts also reveal that, admittedly, the appellant issued a Cease & Desist Notice in September 2019 to the respondent which led to a further exchange of letters till March 2020. In the opinion of this Court, the aforesaid factors were sufficient enough for the learned Trial Court to hold that the appellant was able to make out a prima facie case in its favor and against the respondent with chances of irreparable harm, loss, and injury caused/ likely to be caused to it with the balance of convenience in its favor. Having not done so, the contrary findings thereto in the impugned order are liable to set aside.

14. Facts reveal that respondent, despite having variants of its registered trademark „SUGAR FREE‟, adopted „SugarLite‟ in Class 30, that too after failure of talks with the predecessor of appellant. Facts also reveal that there is no plausible reason given by the respondent for such adoption, either before the learned Trial Court or before this Court, much so, whence the respondent adopted an already existing, identically similar and deceptive mark which was visually, phonetically and structurally as that of appellant despite knowledge thereof. As such, this Court does not agree with the finding of the learned Trial Court that the impugned mark „SugarLite‟ was “coined” by respondent. In the opinion of this Court, the respondent knowingly took a big calculated risk in adopting an identically similar mark „SugarLite‟ as that of the registered trademark „SUGARLITE‟ of appellant despite complete knowledge of its existence since before. Having done so, the respondent is estopped from contending something which is far from reality.

15. This Court is also unable to agree with the finding of the learned Trial Court that “…there would hardly be any question of confusion or deception…” whence, in the opinion of this Court, a bare glance tells otherwise. This is more so because though the font of the two competing marks is different, nonetheless, they are overall identically similar to each other. In any event, in view of this Court, the reasoning given by the learned Trial Court to hold otherwise is insufficient. Moreover, this Court feels that the products involved in Class 29 and Class 30 are somewhat similar, being allied and cognate products and as they are generally procured from the same source in the market and sold over the counter to almost the same class of purchasers, there is all likelihood of confusion in the minds of the general public in assuming that the two competing marks are emanating from a common source of origin.