1992 (7) TMI 343 - HC - Indian Laws

Summary

Issues Involved:
1. Infringement of registered trademarks.
2. Passing off.
3. Validity of assignment of trademarks.
4. Delay in seeking injunction.
5. Balance of convenience.
6. Bona fide use of a name under Section 34 of the Trade and Merchandise Marks Act, 1958.
7. Authority to file the suit.

Issue-wise Detailed Analysis:

1. Infringement of Registered Trademarks:
The plaintiffs claimed that the first defendants infringed their registered trademarks by using the word "Bedrock" in their corporate name and on their goods. The court noted that the plaintiffs were the registered proprietors of the trademarks containing "Bedrock," and the first defendants' use of the same word in their corporate name constituted prima facie infringement. The court referred to Section 28 of the Trade and Merchandise Marks Act, 1958, which confers exclusive rights to the registered proprietors to use their trademarks and seek relief against infringement. The court found no material evidence that the first defendants were manufacturing goods in competition with the plaintiffs but noted the affidavit by Santosh Kumar, a Director of the first defendants, stating that they would not manufacture goods bearing the "Bedrock" trademark. However, the use of "Bedrock" in the corporate name itself was deemed an infringement.

2. Passing Off:
The plaintiffs argued that the use of "Bedrock" by the first defendants amounted to passing off their business as that of the plaintiffs. The court referred to the principle that passing off occurs when the defendant's conduct misleads the public into believing that their business is associated with the plaintiff's business. Given the identical nature of the business, the overlapping trade channels, and the family background, the court found a high likelihood of confusion or deception. The court also considered the Diwali Greeting Card sent by the first defendants, which suggested an association with the plaintiffs' business, further supporting the passing off claim.

3. Validity of Assignment of Trademarks:
The first defendants contended that the plaintiffs had no title to the "Bedrock" trademark as the assignment was invalid. The court rejected this argument, stating that the registered trademarks belonged exclusively to the plaintiffs, who were the registered proprietors. The court emphasized the principle established in Salomon v. Salomon that a company is distinct from its members, and the plaintiffs' corporate status could not be disregarded to treat them as a partnership for the purpose of trademark ownership.

4. Delay in Seeking Injunction:
The first defendants argued that the plaintiffs delayed seeking an injunction, which should disentitle them to relief. The court found no unreasonable delay, noting that the plaintiffs took action promptly upon learning about the first defendants' use of "Bedrock." The court cited precedents indicating that delay alone is not fatal in cases of strong evidence of infringement or passing off.

5. Balance of Convenience:
The first defendants contended that the balance of convenience favored refusing the injunction. The court disagreed, stating that the balance of convenience is relevant only in unusual circumstances and not when the plaintiff is the registered proprietor of a trademark. The court found no such unusual circumstances in this case and held that the plaintiffs were entitled to protection of their registered trademarks.

6. Bona Fide Use of a Name under Section 34:
The first defendants claimed protection under Section 34 of the Trade and Merchandise Marks Act, which allows bona fide use of one's own name. The court rejected this defense, finding that the adoption of "Bedrock" by the first defendants was not bona fide or honest. The court pointed to the misleading Diwali Greeting Card and the lack of transparency in the application to the Registrar of Companies as evidence of dishonest intent to cash in on the plaintiffs' goodwill.

7. Authority to File the Suit:
The first defendants challenged the authority of the person who signed and declared the plaint on behalf of the plaintiffs. The court found that the Power of Attorney granted to Arun Kumar Poddar was sufficient to confer the authority to file the suit, and there was no evidence that the Power of Attorney had been revoked.

Conclusion:
The court held that the first defendants' use of "Bedrock" in their corporate name and on their goods constituted both infringement of the plaintiffs' registered trademarks and passing off. The plaintiffs were granted interim relief, restraining the first defendants from using "Bedrock" as part of their corporate name and from infringing the plaintiffs' trademarks. The injunction on the corporate name was suspended for eight weeks to allow the first defendants to change their name. The court rejected the first defendants' application for a stay of the injunction pending appeal.