2006 (8) TMI 528 - SC - Companies Law

Whether there is as a result of misrepresentation a real likelihood of confusion or deception of the public and consequent damage to the plaintiff? Held that - In this case the courts below proceeded on a prima facie misconstruction of documents. They adopted and applied wrong standards. We, therefore, are of the opinion that a case for interference has been made out. This court have differed with the findings of the courts below primarily on the interpretation of the MOU. In that view of the matter, we are of the opinion that in this case this Court would be justified to interfere with the said findings. We are, however, not oblivious of the damages which may have to be suffered by respondents herein in the event the suit of the appellant is to be ultimately dismissed. We intend to protect the same also. For the said purpose, we would take into consideration the terms of the injunction granted by the Trial Judge that the respondents were entitled to sell their products in the name of M/s. Ram Dev Masala only from the seven outlets. The modification made by the High Court has already been noticed by us. Thus we direct the respondents be restrained from using the trade mark including the trade name Ramdev Masala in any of their products. They may, however, carry on their business in any other name insofar as manufacturing of spices is concerned. The appellant shall, as and when demands are made, supply spices produced by it for retail sale thereof to seven outlets belonging to respondents on usual terms, and in respect of such articles on the labels/pouches, on the reverse thereof, the following shall be mentioned in the minimum permissible size in terms of the provisions of Weights and Measures Act and Prevention of Food Adulteration Act. The appellant shall deposit a sum of Rs. 50 lakhs before the Trial Court or furnish a bank guarantee for the said sum by way of security. Despite pending applications for rectification before the Registrar of Trade Marks, the final hearing of Civil Suit No. 828 of 2000 shall be expedited and the learned Trial Judge is hereby directed to complete the hearing as expeditiously as possible preferably within a period of six months from the date of communication of this order. For the reasons aforementioned, these appeals are allowed.

Issues Involved:
1. Interpretation of the Trade and Merchandise Marks Act, 8 of 1958.
2. Exclusive statutory right to use the trademark 'Ramdev' apart from the label as a whole (Sections 15 and 17).
3. Concurrent user rights (Section 29).
4. Bona fide user and principles of estoppel and acquiescence.
5. Interpretation of a Memorandum of Understanding (MOU) as a family settlement.
6. Infringement of the registered trademark and passing off.
7. Grant of injunction and balance of convenience.
8. The role of statutory requirements under the Prevention of Food Adulteration Act and Standards of Weights and Measures Act.
9. Waiver of rights.
10. Laches and acquiescence.
11. Appellate court's jurisdiction to interfere with trial court orders.

Issue-wise Detailed Analysis:

1. Interpretation of the Trade and Merchandise Marks Act, 8 of 1958:
The case revolves around the interpretation of the provisions of the Trade and Merchandise Marks Act, 1958, particularly focusing on the rights conferred by registration and the consequences of infringement under Sections 28 and 29. The Act defines "deceptively similar" and outlines the rights of a registered proprietor.

2. Exclusive Statutory Right to Use the Trademark 'Ramdev' Apart from the Label as a Whole (Sections 15 and 17):
The respondents argued that the appellant has no exclusive statutory right to use 'Ramdev' apart from the label as a whole. Section 15 allows for the registration of parts of trademarks separately, while Section 17 deals with disclaimers in trademarks. The court found that the appellant's trademark, containing 'Ramdev', 'Masala', and a horse logo, was not subject to such disclaimers, and thus, the appellant had exclusive rights to the use of 'Ramdev'.

3. Concurrent User Rights (Section 29):
The respondents claimed a right to use the mark as concurrent users under Section 29. The court held that the respondents, who were rival traders, did not have any legal right to use the trademark 'Ramdev', save and except by reason of the terms contained in the MOU or continuous user, which they failed to establish.

4. Bona Fide User and Principles of Estoppel and Acquiescence:
The respondents argued that their use was protected as bona fide and that the appellant was barred from reliefs under principles of estoppel and acquiescence. The court found that the appellant had taken timely steps to protect its trademark, including issuing notices and filing suits, and thus, the principles of estoppel and acquiescence did not apply.

5. Interpretation of MOU as a Family Settlement:
The MOU, treated as a family settlement, was crucial in determining the rights of the parties. The court interpreted the MOU to mean that the respondents were only allowed to carry on retail business from seven outlets and not to manufacture spices under the name 'Ramdev Masala'. The MOU did not grant the respondents any right to use the trademark for manufacturing purposes.

6. Infringement of the Registered Trademark and Passing Off:
The court found that the respondents' use of the trademark 'Ramdev Masala' was deceptively similar to the appellant's registered trademark, creating confusion among consumers. This constituted an infringement and passing off. The court emphasized that the use of a deceptively similar mark is likely to deceive or cause confusion, thus infringing the appellant's rights.

7. Grant of Injunction and Balance of Convenience:
The court held that the appellant had established a prima facie case of infringement and that the balance of convenience was in favor of granting an injunction. The respondents were restrained from using the trademark 'Ramdev Masala' in any of their products, although they could carry on their business under a different name.

8. Role of Statutory Requirements under the Prevention of Food Adulteration Act and Standards of Weights and Measures Act:
The High Court had modified the trial court's order, allowing the respondents to use the words 'Ramdev Masala' on their labels to comply with statutory requirements. The Supreme Court disagreed, stating that compliance with statutory requirements does not override the exclusive rights conferred by the trademark registration.

9. Waiver of Rights:
The court addressed the issue of waiver, stating that the respondents had expressly waived their right to the trademark 'Ramdev' in favor of the appellant-Company. The principle that what cannot be done directly cannot be done indirectly was applied, negating the respondents' claim to the trademark.

10. Laches and Acquiescence:
The court found that the appellant had not acquiesced to the respondents' use of the trademark. The appellant had taken various legal steps to protect its trademark, including issuing notices and filing suits. The delay in taking action was due to pending legal proceedings, and thus, the defense of laches and acquiescence did not apply.

11. Appellate Court's Jurisdiction to Interfere with Trial Court Orders:
The Supreme Court noted that while appellate courts are usually slow to interfere with the discretionary jurisdiction of the trial court, they can do so if the discretion has been exercised arbitrarily, capriciously, or perversely. In this case, the courts below had misconstrued the MOU and applied wrong standards, justifying the Supreme Court's interference.

Conclusion:
The appeals were allowed, and the respondents were restrained from using the trademark 'Ramdev Masala' in any of their products. The appellant was directed to supply spices for retail sale to the respondents' seven outlets with specific labeling requirements. The trial court was directed to expedite the final hearing of the suit. The respondents were ordered to pay the costs of the appeals.

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