2003 (4) TMI 409 - HC - Companies Law

Summary

Issues Involved:
1. Passing off
2. Infringement of Registered Trade Mark
3. Breach of Negative Covenant

Detailed Analysis:

Passing off:

The appellant was found to be dealing in a quality of compounded Asafoetida under the name "Vandevi Superfine Powder" with 73% rice flour, which was identical to the respondent's "Vandevi Powder (Yellow)." The respondent argued that this amounted to dishonest trade practice, as the appellant was passing off the respondent's goods as his own. The court noted that the appellant's actions constituted "reverse passing-off," where the defendant takes credit for the plaintiff's goods. This was supported by cases like Samuelson v. Producers Distributing and Plomien Fuel Economiser Co. Ltd. v. National School of Salesmanship. The court concluded that the appellant's actions fell within the ambit of tort of passing off, as the appellant misrepresented the qualities belonging to the respondent, causing damage to the respondent's goodwill and misleading the ultimate consumer.

Infringement of Registered Trade Mark:

The appellant argued that the registration of the trade mark "Vandevi" allowed him to use it for any quality of goods he manufactured. However, the court found that the appellant had altered the registered label by changing the ingredients from wheat flour to rice flour, making the label different from the registered one. This altered label was considered an unregistered mark, and thus, the respondent was entitled to sue for infringement. The court referred to section 28(1) and section 29(1) of the Trade and Merchandise Marks Act, 1958, which give the registered proprietor exclusive rights to use the registered trade mark and to obtain relief for infringement. The court upheld the learned Single Judge's finding of infringement of the respondent's registered trade mark.

Breach of Negative Covenant:

The court found that the appellant had breached the negative covenant in the Deed of Dissolution, which restricted both parties to 9 qualities assigned to them. By selling "Vandevi Powder (Yellow)" under the name "Vandevi Superfine Powder," the appellant violated this covenant. The respondent demonstrated that any changes in their product labels were either printing errors or rectified promptly. The court dismissed the appellant's claims of the respondent breaching the covenant and upheld the finding of the learned Single Judge on this issue.

Conclusion:

The appeal was dismissed with costs, as the court found no merit in the appellant's arguments and upheld the interim injunction granted by the learned Single Judge on the grounds of passing off, infringement of registered trade mark, and breach of negative covenant.