1998 (7) TMI 716 - HC - Indian Laws

Summary

Issues:
1. Suit for permanent injunction and rendition of accounts
2. Prior user rights in a passing off action
3. Validity of interim injunction

Analysis:

1. Suit for permanent injunction and rendition of accounts:
- A company filed a suit for permanent injunction, alleging that it adopted the trade mark SEFLOX in 1990 and extensively used it, seeking protection against another company using the same mark.
- The defendant claimed it had adopted the mark in 1991 and had been using it since 1992, denying the plaintiff's allegations and counterclaiming for damages.
- The court considered evidence such as sales figures, applications for registration, and communication between the parties to determine the timeline of usage for each party.

2. Prior user rights in a passing off action:
- The court emphasized the principle that a prior user of a trade mark has rights over a later user even without registration, citing various legal precedents.
- The plaintiff claimed continuous use since 1990, while the defendant asserted usage since 1992, leading to a dispute over who had the prior right to the mark.
- The court analyzed the evidence presented by both parties, including sales figures, applications for registration, and communication records, to ascertain the actual timeline of usage.

3. Validity of interim injunction:
- In an action for passing off, the party seeking an interim injunction must establish distinctive features, substantial user, and wide reputation of the trade mark.
- The defendant, as the prior user, demonstrated substantial sales figures and wide reputation of the product under the SEFLOX mark, supporting the grant of an interim injunction.
- The court found that the balance of convenience favored the defendant, as non-granting of the injunction could cause irreparable harm, leading to the decision to set aside the impugned order and allow the defendant's applications for injunction.

In conclusion, the court allowed both appeals, setting aside the impugned order. The plaintiff was restrained from using the trade mark SEFLOX, or any deceptively similar mark, during the pendency of the suit. The decision was based on the prior user rights in a passing off action and the validity of the interim injunction sought by the defendant.