1996 (8) TMI 508 - SC - Companies Law

Whether there is any cogent ground to interfere in this appeal with the exercise of discretion by the trial court? Held that - It is unnecessary to refer to the several decisions cited at the bar to indicate the settled principles of law regulating grant or refusal of interlocutory injunctions and the scope for grant of such an injunction in a passing-off action even against the proprietor of a registered trade mark. None of those decisions lays down that in a passing-off action based on the right in common law distinct from the statutory right based on a registered mark an injunction cannot be granted even against an owner of the trade mark in an appropriate case. It is for this reason Shri Kapil Sibal fairly conceded this position at the outset and relied on the fact of registration in favour of the defendants only for the limited purpose indicated earlier. The surviving controversy at this stage was confined only to the legality and propriety of an interlocutory injunction granted on the facts of this case. It cannot be seriously disputed that on the findings recorded by the trial court and affirmed on appeal by the Division Bench which appear to us as reasonable conclusion on the relevant material grant of an interlocutory injunction is the appropriate order to make and the proper exercise of discretion by the trial court. This appeal must therefore fail.

Summary

Issues Involved:
1. Temporary injunction in a passing off action.
2. Prior user and trans-border reputation of the trademark "WHIRLPOOL."
3. Validity and effect of trademark registration by defendants.
4. Allegations of delay, acquiescence, and abandonment by plaintiffs.
5. Balance of convenience and irreparable injury.

Detailed Analysis:

1. Temporary Injunction in a Passing Off Action:
The core issue revolves around whether a temporary injunction should be granted to restrain the defendants from using the trademark "WHIRLPOOL." The plaintiffs, a multinational corporation and its Indian subsidiary, sought to prevent the defendants from manufacturing, selling, or advertising washing machines under the "WHIRLPOOL" mark. The Single Judge of the Delhi High Court granted the temporary injunction, which was affirmed by the Division Bench, leading to the present appeal.

2. Prior User and Trans-Border Reputation:
The plaintiffs claimed prior user of the "WHIRLPOOL" mark since 1937 and a trans-border reputation that extended to India. They argued that the mark "WHIRLPOOL" was associated with their products worldwide, including in India, through advertisements in international magazines. The court found that the plaintiffs had established a reputation and goodwill in the "WHIRLPOOL" mark extending to India, despite limited actual sales within the country.

3. Validity and Effect of Trademark Registration by Defendants:
The defendants had applied for and obtained registration of the "WHIRLPOOL" trademark in India in 1992, based on proposed use. The plaintiffs opposed this registration and filed for rectification, both of which were pending. The court noted that the defendants had not provided evidence of actual use of the trademark prior to the grant of the interlocutory injunction. The registration was deemed insufficient to negate the plaintiffs' claim of passing off, as the plaintiffs' prior user and reputation were established.

4. Allegations of Delay, Acquiescence, and Abandonment:
The defendants argued that the plaintiffs were guilty of delay, acquiescence, and abandonment of the "WHIRLPOOL" mark in India, as their registration had lapsed in 1977. The court rejected these arguments, noting that the plaintiffs had consistently opposed the defendants' registration and had filed for rectification and the present suit without undue delay. The court found no evidence of acquiescence or abandonment by the plaintiffs.

5. Balance of Convenience and Irreparable Injury:
The court held that the balance of convenience favored the plaintiffs, as the use of the "WHIRLPOOL" mark by the defendants could cause irreparable injury to the plaintiffs' reputation and goodwill. The plaintiffs' washing machines were of a higher quality and engineering standard, and the defendants' use of the mark could mislead consumers. The court found that the defendants would suffer no significant injury by being restrained from using the "WHIRLPOOL" mark, as they could continue to sell their products under other names.

Conclusion:
The Supreme Court upheld the temporary injunction granted by the Delhi High Court, affirming that the plaintiffs had established a prima facie case of passing off, supported by prior user and trans-border reputation of the "WHIRLPOOL" mark. The court found no cogent ground to interfere with the trial court's exercise of discretion, emphasizing that the grant of an interlocutory injunction was in accordance with settled legal principles. The appeal was dismissed with costs of Rs. 10,000.