Full Text
Date of Decision: 23rd January, 2019
CPC) & 16184/2018 (for condonation of 68 days delay in filing replication)
NEW BALANCE ATHLETICS, INC. ..... Plaintiff
Through: Mr. Aditya Goyal, Adv.
Through: Mr. Abhishek Malhotra, Mr. Himanshu Deora & Mr. Shashwat Rakshit, Advs.
JUDGMENT
1. The application of the plaintiff for interim injunction in this suit for permanent injunction restraining infringement of trade mark, passing off and for ancillary reliefs is for consideration.
2. The counsel for the parties were heard on 22nd November, 2018 when after hearing, personal presence of Mr. Simarpreet Singh, Director of the defendant was directed. Mr. Simarpreet Singh, Director of the defendant appeared before this Court yesterday and his statement was recorded; the counsels were further heard and on request of the counsel for the defendant, the hearing adjourned to today. The counsel for the defendant has been further heard today.
3. The plaintiff instituted this suit, pleading (i) to be a company existing under the laws of USA; (ii) to be engaged in the manufacturing, marketing and sale of all types of footwear, readymade apparel including footwear and 2019:DHC:483 apparel in the field of sportswear under the trade marks „NEW BALANCE‟;
(iii) that the trade mark „NEW BALANCE‟ was adopted by the plaintiff‟s predecessor in title in the year 1906 and thereafter has been in continuous use in USA and around the world; (iv) that „NEW BALANCE‟ constitutes not only the mark of the plaintiff but also constitutes an important and essential feature of the trading name of the plaintiff; (v) that the plaintiff has six manufacturing facilities in USA and wholly owned subsidiaries in U.K., Hong Kong, Singapore, Australia, New Zealand, Mexico, Canada and South Africa; (vi) that the plaintiff is the registered proprietor of the mark „NEW BALANCE‟ in India since 2nd February, 1990 in Class 18, in respect of bags such as backpacks and tote bags for carrying sporting articles and since 18th May, 1987 in Class 25, in respect of articles of athletic and sports, footwear and clothing; both the said registrations are subsisting; (vii) that the plaintiff sells its goods under the mark „NEW BALANCE‟ in more than 120 countries including India through specialty retailers, departmental stores etc.;
(viii) that the plaintiff also sells its goods online and the goods of the plaintiff are offered for sale in India on Newbalance.co.in, Amazon.in, Jabong.in, Myntra.in, Flipkart.in, Snapdeal.in and Liveyoursport.in; (ix) that the plaintiff is also the owner of domain names comprising of „NEW BALANCE‟ in different countries; (x) that “the plaintiff has been using the trade mark „NEW BALANCE‟ in respect of its various goods and services in India since at least as early as 1986; however, it is only in the year 2016, that the plaintiff appointed a full time distributor in India; prior to 2016, the sales in India were sporadic in nature”; (xi) that plaintiff‟s trade mark „NEW BALANCE‟ has been endorsed by leading sportsmen as well as reputed teams / national teams in various sports; (xii) that the plaintiff, sometime in March, 2017 came to know that the defendant had filed a trade mark application for the mark „NEW BALANCE‟ in respect of footwear; and,
(xiii) that the plaintiff served a cease and desist notice dated 17th March,
2017 to the defendant and to which the defendant replied on 18th April, 2017; a meeting was arranged of the parties and in which meeting, the defendant conveyed that it was willing to comply with the demand of the plaintiff provided a monetary consideration was given to the defendant and which demand of the defendant was rejected by the plaintiff.
4. The suit was entertained, though no ex parte injunction sought granted.
5. The defendant, in its written statement has pleaded that (a) the defendant has been in the footwear industry since early 1970s and the goods sold by the defendant are available throughout India and are well known; (b) the defendant has adopted various trade marks and of which „NEW BALANCE‟ is one; (c) the defendant has used the mark „NEW BALANCE‟ since the year 1999 in conjunction with its house mark „APEX‟, resulting in enormous goodwill and reputation and also acquired distinctiveness in favour of the defendant; (d) the defendant has superior rights over the mark „NEW BALANCE‟ in India; (e) the defendant filed application for registration of „NEW BALANCE‟ on 13th April, 2000, claiming use since 1999; (f) the plaintiff has no user of the subject trade mark in relation to the subject goods; (g) the registration in Class 18 cited by the plaintiff is in the name of „New Balance Licensing Inc.‟ and the plaint does not disclose the relationship between the plaintiff and „New Balance Licensing Inc.‟; (h) the plaintiff has not filed any evidence of claimed use since 1986 and on the contrary has admitted its sales prior to 2016 being „sporadic‟; (i) the defendant honestly adopted the mark „NEW BALANCE‟ in the year 1999; (j) there is no likelihood of confusion owing to the difference in price, trade channels, class of consumers, target market, manufacturing material / nature of goods and character and performance of goods of the parties; (k) the suit is highly belated, the defendant having commenced use of the mark in 1999 and there is no explanation for the delay; (l) even after coming to know in March, 2017 of the defendant, the present suit has been filed only in March, 2018; the plaintiff has thereby acquiesced in use of the mark by the defendant; and, (k) there is no document filed by the plaintiff of use of the mark in India since 1999.
6. The plaintiff, in its replication, with respect to „New Balance Licensing Inc.‟ has pleaded that the present suit is based on registration dated 18th May, 1987 in Class 25 in the name of the plaintiff and the counsel for the plaintiff explains that the application of the plaintiff for rectification of the registration dated 2nd March, 1990 in Clause 18 in the name of „New Balance Licensing Inc.‟ to the name of the plaintiff is pending.
7. The counsel for the defendant at this stage states that the replication has not been taken on record as yet.
8. It was the contention of the counsel for the plaintiff on 22nd November, 2018, that (i) the plaintiff learnt of the rights claimed by the defendant in the trade mark „NEW BALANCE‟ of the plaintiff, from the application filed by the defendant for registration of the said mark; (ii) otherwise, the plaintiff has not found any sales by the defendant under the said mark, though in the application for registration as well as in the reply to the notice preceding the suit, the defendant claimed so; (iii) the defendant has filed documents in proof of sale, at pages 26 to 40 of their documents, but the same also do not indicate as to what product is being sold thereunder;
(iv) the defendant has also not pleaded their sales figures; and, (v) the defendant, from pages 41 to 153 has filed its brochure but not a single product bears the trade mark „NEW BALANCE‟. It was on the aforesaid contention that the personal presence of Mr. Simarpreet Singh, Director of the defendant before this Court was directed.
9. Mr. Simarpreet Singh, Director of the defendant in his statement recorded yesterday has stated that the mark „APEX NEW BALANCE‟ is reflected in the brochure filed by the defendants before this Court and has pointed out the pages of the said brochure. He has also stated that the mark „APEX NEW BALANCE‟ is embossed on the shoes under the said mark though not visible in the photographs thereof filed before this Court. It has further been clarified by Mr. Simarpreet Singh that all goods are sold in the name of „APEX NEW BALANCE‟ and not under the mark „NEW BALANCE‟ alone, i.e. without the word „APEX‟ and that the sales of „APEX NEW BALANCE‟ are not recorded separately.
10. The counsel for the plaintiff has argued that, (i) the defendant, who is in the same trade as the plaintiff, is to be presumed to have known of the market of the plaintiff in relation to the same shoes; (ii) the defendant intentionally squatted over the mark of the plaintiff, with a view to extort money from the plaintiff; (iii) in N.R. Dongre Vs. Whirlpool Corporation (1996) 5 SCC 714, the damage to the mark by the defendant on account of poor technology and low pricing was taken into consideration while granting the interim injunction; (iv) in para no.6 of Milmet Oftho Industries Vs. Allergan Inc. (2004) 12 SCC 624, N.R. Dongre supra was analysed; and, (v) all the registered trade marks of the defendant are with the prefix „APEX‟ and the defendant has no registration of „NEW BALANCE‟; even „NEW BALANCE‟ is being used by the defendant in conjunction with „APEX‟.
11. Per contra, the counsel for the defendant has argued that, (a) the plaintiff, while applying for registration, applied on „proposed to be used‟ basis; on the contrary the defendants in their application claimed use since 1999; (b) the registration of the plaintiff under Class 18 is with the disclaimer with respect to the word „NEW‟; the plaintiff thus cannot claim any right to the exclusive use of the word „NEW‟; (c) it is falsely stated that the defendant intended to squat on the mark to extort monies; the question of payment came up during the discussions held between the parties and it was in the said context that the defendant had sent the communication to which reference is made by the plaintiff; (d) the adoption by the defendant is honest and owing to the technology adopted by the defendant of, the shoes of the defendant having a unique balance which does not exist in the other shoes available in the market and which imparts comfort; (e) there is no possibility of any confusion / deception inasmuch as the market segment of the shoes of the plaintiff and the defendant is different; the shoes of the defendant under the mark „NEW BALANCE‟ are priced under Rs.1,000/-; (f) the annual sale of the shoes under the mark „NEW BALANCE‟ is over 32 lacs pairs of shoes; (g) while the shoes of the defendant are meant for farmers; the shoes of the plaintiff qualify as sportswear; (h) the plaintiff itself in the plaint has admitted its sales in India to be sporadic prior to the year 2016; (i) the plaintiff has not produced a single document to prove sale and use of the mark in India before 2016; (j) the registration of the mark of the plaintiff is not a word mark registration but a device mark registration; (k) the plaintiff, after the knowledge of the use by the defendant also, has instituted this suit after considerable delay and thereby acquiesced in use of the mark by the defendant; (l) trafficking in trade marks is prohibited and it is the plaintiff who obtained registration of the mark in India without any intent of use thereof, as is obvious from non use thereof till 2016; (m) attention is drawn to Section 47 of the Trade Marks Act, 1999 providing for removal of the mark from Register for non use for five years; (n) the registration in favour of the plaintiff is not of a „word mark‟ but of a „device‟ and the parameters, as of a „word mark‟, will not apply; (o) in N.R. Dongre supra, there were documents on record and admission of use of the mark by Whirlpool Corporation in India and it was in the said context that injunction was granted; (p) Milmet Oftho Industries supra relied upon by the counsel for the plaintiff is in relation to pharmaceutical products and interim injunction therein was granted in the context of public harm and the doctors in India also keeping abreast of the developments in the field worldwide; (q) attention is drawn to Columbia Sportswear Company Vs. Harish Footwear 2017 (70) PTC 489 where a Co-ordinate Bench vacated the injunction reasoning that though the mark of the plaintiff therein may be well known in foreign country but the presence of the plaintiff in India had not been shown from any of the documents filed by the plaintiff and the percentage of customers of the plaintiff remained a mystery; and, (r) reliance is placed on Toyota Jidosha Kabushiki Kaisha Vs. Prius Auto Industries Ltd. 2018 (2) SCC 1 containing reference to Professor Critopher Wadlow‟s book “The Law of Passing Off”, 5th Edition, Sweet & Maxwell, opining that bona fide domestic traders should not be open to litigation at the suit of unknown or barely known claimants from almost anywhere in the world.
12. I have considered the rival contentions.
13. Having weighed the rival contentions on the anvil of the ingredients of prima facie case, irreparable injury, balance of convenience and public interest, I find the plaintiff entitled to the interim injunction sought. My reasons are stated herein below:
I. It is thus a mark having brand value which is pitted against a mark having no brand value and on building of value whereof the defendant has not spent any monies.
BALANCE‟, which it is not disputed, is similar if not identical to the mark of the plaintiff, thus has potential of putting off the intending consumers of the product of the plaintiff owing to the brand of the plaintiff being dented by the presence in the market of other products under a mark which can be confused with the brand of the plaintiff.
(ii) Jolen Inc. Vs. Doctor & Company (2002) 98 DLT 76; (iii)
Milmet Oftho Industries supra; (iv) Cadbury UK Limited Vs. Lotte India Corpn. Limited 2014 SCC OnLine Del 367; (v) Neon Laboratories Limited Vs. Medical Technologies Limited (2016) 2 SCC 672; and (vi) H&M Hennes & Mauritz supra
14. IA No. 6402/2018 thus succeeds. The defendant is restrained, during the pendency of this suit, from using the mark „NEW BALANCE‟ and / or any other mark similar or deceptively similar thereto, amounting to infringement / passing off by the defendant of its goods as that of the plaintiff under the mark „NEW BALANCE‟
15. The defendant shall however have liberty to apply for grant of time to enable it to inform its consumers of the new mark, instead of the mark „NEW BALANCE‟. RAJIV SAHAI ENDLAW, J. JANUARY 23, 2019 „gsr‟.. (Corrected and released on 20th February, 2019)