1990 (4) TMI 280 - SC - Companies Law

Whether there is a prima facie case on which Antox could be held entitled to restrain Wander Ltd. and Alfred Berg from manufacturing and marketing goods under the Trade name Cal-De-Ce? Whether on considerations of balance of convenience and comparative hardship a temporary injunction should issue? Held that - The Drug Controller s licence claimed by Antox as the source of its right to the user of the trade-mark, itself expressly stipulates that the goods to be manufactured pursuant to the said licence shall be goods under the registered Trade-mark, of Wander Ltd. The effect of this on the quality of the user has not been examined by the Appellate-Bench. Even if a prior registration of a Trade mark is not necessarily evidence of prior user as contended by Sri Raa, Antox cannot, prima facie, explain how in a passing-off action its user subsequent to June 1986 would prevail over the prima facie finding that Wander Ltd. was manufacturing Calcium Gluconate Tablets under the trade-mark Cal-De-Ce at its own factory in Bombay from August 1983 to June 1986. The Appellate Bench does not dislodge this finding nor does it recognise the crucial effect of prior use by the defendant on the plaintiff s case in a passing-off action. It appears to us that it was not an appropriate case where the appellate Bench could have interfered with the discretion exercised by the learned Single, Judge. Allow these appeals

Summary

Issues Involved:
1. Grant of temporary injunction in a passing-off action.
2. Prima facie case for passing-off.
3. Balance of convenience and comparative hardship.
4. Scope and nature of appellate court's discretion in interfering with the trial court's discretionary orders.
5. Prior user of the trademark.
6. Effect of Drug Controller's license on the quality of user.

Detailed Analysis:

1. Grant of Temporary Injunction in a Passing-Off Action:
The appellants, defendants in Civil Suit No. 1220 of 1988, challenged the Division Bench's order granting a temporary injunction that restrained them from passing off their medicinal product Cal-De-Ce as that of the respondent-plaintiff. The learned Single Judge initially refused the temporary injunction, but the Division Bench reversed this decision on appeal, granting the injunction.

2. Prima Facie Case for Passing-Off:
The respondent claimed a right to the trademark Cal-De-Ce by continuous use. The key consideration was whether there was a prima facie case to restrain the appellants from using the trademark. The Single Judge found that Wander Ltd. was the earlier user of the trademark, manufacturing and marketing the product from August 1983 to June 1986. The Division Bench, however, concluded that the respondent had established a prima facie case for a passing-off action based on its manufacture and use of the trademark under licenses.

3. Balance of Convenience and Comparative Hardship:
The court must weigh the need for protection against the injury to the defendant from being prevented from exercising their legal rights. The Single Judge found that the balance of convenience did not favor the respondent, while the Division Bench held otherwise, emphasizing the need to maintain the status quo.

4. Scope and Nature of Appellate Court's Discretion:
The appellate court should not interfere with the trial court's exercise of discretion unless it is shown to be arbitrary, capricious, or perverse. The Division Bench reassessed the material and reached a different conclusion without deferring to the principles governing appellate interference with discretionary orders.

5. Prior User of the Trademark:
The Single Judge determined that Wander Ltd. was the prior user of the trademark, which the Division Bench did not dispute. However, the Division Bench concluded that the respondent's use of the trademark under licenses constituted a prima facie case for passing-off. The Supreme Court noted that the appellate bench did not dislodge the finding of prior use by Wander Ltd., which was crucial for the passing-off action.

6. Effect of Drug Controller's License on the Quality of User:
The respondent argued that its user of the trademark was independent, stemming from the Drug Controller's license. However, the license stipulated that the goods manufactured were under Wander Ltd.'s registered trademark. The appellate bench did not examine the effect of this stipulation on the quality of the respondent's user.

Conclusion:
The Supreme Court allowed the appeals, setting aside the Division Bench's order and restoring the Single Judge's order refusing the interlocutory injunction. The court emphasized that the appellate bench erred in interfering with the trial court's discretion and did not adequately address the prior use by Wander Ltd. or the implications of the Drug Controller's license. The matter was remitted to the High Court for expeditious disposal of the suit, with no orders as to costs.