1998 (6) TMI 579 - HC - Indian Laws

Summary

Issues Involved:
1. Passing-off action and trans-border reputation.
2. Prima facie case for granting interim injunction.
3. Balance of convenience and irreparable loss.
4. Delay and laches in seeking relief.
5. Applicability of the Trade and Merchandise Marks Act, 1958.

Issue-wise Detailed Analysis:

1. Passing-off Action and Trans-border Reputation:
The plaintiff, Caesar Park Hotels and Resorts Inc. (CPHR), sought a permanent injunction against the defendant, Westinn Hospitality Services Limited (WHSL), to restrain them from using the name "Westinn," claiming it was deceptively similar to their service mark "Westin." The plaintiff argued that despite not having a physical presence in India, their mark "Westin" had acquired trans-border reputation and goodwill through international advertisements and services provided to Indian clients. Citing various precedents, the court recognized that even without a business presence in India, a company could maintain a passing-off action based on trans-border reputation. The court referred to cases such as *Sheraton Corporation of America v. Sheraton Motels Ltd.* and *N. R. Dongre v. Whirlpool Corporation* to support this view.

2. Prima Facie Case for Granting Interim Injunction:
The plaintiff argued that they had established a prima facie case for an interim injunction by demonstrating their worldwide reputation and the potential for confusion due to the defendant's use of a similar name. The court found that the plaintiff had indeed established a prima facie case, noting that the plaintiff's service mark "Westin" had been advertised in international magazines available in India and that there was a regular flow of Indian travelers to Westin Hotels worldwide. The court concluded that the plaintiff had acquired trans-border reputation and goodwill in India.

3. Balance of Convenience and Irreparable Loss:
The court assessed the balance of convenience and potential irreparable loss to both parties. It was determined that the balance of convenience favored the plaintiff, as the continued use of "Westinn" by the defendant could lead to confusion and damage the plaintiff's reputation. The court held that if the injunction was not granted, the plaintiff would suffer irreparable harm, whereas the defendant's inconvenience was not a sufficient ground to deny the injunction.

4. Delay and Laches in Seeking Relief:
The defendant argued that the plaintiff had delayed seeking relief, as the defendant had been using the name "Westinn" since 1989. However, the court found that the significant advertisements and use of "Westinn" by the defendant only began in 1995, after entering into a franchise agreement with Days Inn of America. The plaintiff promptly sent a cease and desist notice upon discovering this, and the court concluded that there were no laches on the plaintiff's part in approaching the court.

5. Applicability of the Trade and Merchandise Marks Act, 1958:
The learned single judge initially dismissed the plaintiff's applications, holding that the Trade and Merchandise Marks Act, 1958, was inapplicable to service marks. However, the appellate court found this reasoning flawed, emphasizing that the principles of passing-off and trans-border reputation were sufficient grounds for granting an injunction, irrespective of the Act's applicability to service marks.

Conclusion:
The appellate court allowed the appeals, set aside the order of the learned single judge, and granted the interim injunctions as prayed for by the plaintiff. The court recognized the plaintiff's trans-border reputation and the potential for confusion due to the defendant's use of a similar name, thereby justifying the grant of interim relief to prevent irreparable harm to the plaintiff's goodwill and reputation. The court also stayed the operation of its order for four weeks to allow the defendant to seek appropriate remedies.