2007 (1) TMI 616 - HC - Companies Law

Summary

Issues Involved:
1. Deceptive similarity between the marks 'Udta Panchhi' and 'Panchhi Chaap'.
2. Delay and laches as grounds to deny injunction.
3. Honest and concurrent user as a defense to infringement.
4. Maintainability of the suit for infringement based on 1974 registration.
5. Ownership of the registered mark by the Respondent.
6. Merits and prima facie facts.
7. Allegations of fraud and concealment of facts by the Respondent.

Issue-wise Detailed Analysis:

(A) Deceptive Similarity Between the Marks 'Udta Panchhi' and 'Panchhi Chaap':
The court examined whether the marks 'Udta Panchhi' and 'Panchhi Chaap' were deceptively similar. It was noted that consumer confusion is a significant factor, especially among illiterate and semi-literate consumers who purchase chewing tobacco. The court applied several tests, including visual and phonetic similarity, to determine if the marks could cause confusion. It concluded that the word "Panchhi" in both marks was prominent and likely to cause confusion due to its phonetic similarity and the use of a flying bird image in both marks. Therefore, the court held that deception or confusion was likely to arise.

(B) Delay and Laches as Grounds to Deny Injunction:
The court addressed whether the delay in filing the suit by the Respondent should deny them the injunction. The Respondent filed the suit in 1997, long after the Appellant's predecessor adopted the mark in 1982. The court reviewed various precedents and concluded that mere delay is not sufficient to defeat an injunction in cases of trademark infringement. The court emphasized that delay must be accompanied by acquiescence or consent to be a valid ground to deny injunction. The court found no evidence of acquiescence or consent by the Respondent and held that the delay did not bar the injunction.

(C) Honest and Concurrent User as a Defense to Infringement:
The Appellant argued that they were entitled to use the mark 'Udta Panchhi' based on honest and concurrent use under Section 12(3) of the Trade and Merchandise Marks Act, 1958. The court stated that the onus was on the Appellant to prove honest and concurrent use. It found that the Appellant's adoption of the mark in 1982 was not honest, as the Respondent had been using the mark 'Panchhi Chaap' since 1973 and had substantial sales. The court concluded that the Appellant's initial adoption was not honest and therefore, they could not benefit from the defense of honest and concurrent use.

(D) Maintainability of the Suit for Infringement Based on 1974 Registration:
The Appellant contended that the suit was not maintainable as the Respondent's registrations, except for one, were subsequent to the Appellant's use since 1982. The court referred to the Supreme Court's decision in Ramdev Food Products and held that deception could be in respect of any prominent feature of the registered trademark. The court concluded that the Respondent's suit for infringement was maintainable based on their 1974 registration.

(E) Ownership of the Registered Mark by the Respondent:
The Appellant argued that the Respondent, Shiva Tobacco Company, was not the same entity that registered the mark in 1974. The court found that the partnership firm had been reconstituted after the death of two partners, and the remaining partners continued the business without objection from the legal representatives of the deceased partners. The court held that the Respondent was the owner of the registered trademark.

(F) Merits and Prima Facie Facts:
The court reviewed the sales figures and marketing efforts of both parties. It found that the Respondent had substantial sales under the mark 'Panchhi Chaap' since 1973, while the Appellant's sales increased significantly only after 1989. The court concluded that the Respondent had a prima facie case for infringement and that the balance of convenience favored the Respondent. The court granted the Respondent an injunction but allowed the Appellant three months to comply and dispose of their pending stock.

(G) Allegations of Fraud and Concealment of Facts by the Respondent:
The Appellant alleged that the Respondent had concealed facts and made misrepresentations in the plaint. The court found that the Respondent had not gained anything by concealing facts and had acted fairly after the relevant facts were disclosed. The court concluded that the Respondent was not guilty of deliberate concealment or misrepresentation and was entitled to the injunction.

Conclusion:
The court dismissed the appeal, upheld the trial court's order granting an injunction to the Respondent, and allowed the Appellant three months to comply with the order. The court clarified that its observations were tentative and based on a prima facie view, and the trial court would dispose of the suit based on the evidence adduced by the parties.