Biju v. Inner Shoppe

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** **FRIDAY, THE 19TH DAY OF AUGUST 2016/28TH SRAVANA, 1938** **FAO.No. 189 of 2016 () -----------------------** **AGAINST THE ORDER IN I.A.NO.69/2015 IN O.S.NO.12/2014 DATED 25.07.2016 OF THE IV[TH] ADDITIONAL DISTRICT COURT, THRISSUR** **APPELLANT/RESPONDENT/DEFENDANT:** **------------------------------** **BIJU AGED 31 YEARS, S/O.SREEDHARAN K.V. DOOR NO.25/805, INNERSHOPE, MACHINGAL LANE, M.G.ROAD, THRISSUR.** **BY ADVS.SRI.G.SREEKUMAR (CHELUR) SRI.K.R.ARUN KRISHNAN** **RESPONDENT/PETITIONER/PLAINTIFF:** **-------------------------------** **INNERSHOPPE, REPRESENTED BY THE MANAGING PARTNER K.V.SOMASUNDARAM S/O.LATE KOLLADIKKAL VIJAYAN, PAINOOR DESOM, PERINGOTTUKARA P.O., THANNYAM VILLAGE, TRICHUR TALUK-680001.** **BY ADV. SRI.P.BHASKARAN** **THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 19-08-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **A. HARIPRASAD, J. ------------------------------F.A.O.No.189 of 2016** ## **---------------------------------------------Dated this the 19[th] day of August, 2016** ## **JUDGMENT** The respondent in this appeal is the plaintiff in O.S.No.12 of 2014 filed before the District Court, Thrissur. The suit is filed under Section 29 read with Section 134 of the Trade Marks Act, 1999 (hereinafter referred to as 'the Act'). Alongwith the suit, an application for temporary injunction was also filed. The defendant therein is the appellant. 2. Common averments in the suit and the application are as follows: Respondent is a partnership with a firm name 'Inner Shoppe', which has been carrying on showroom sales of various garments, such as inner wears, clothing items for new born babies, night wears etc. The firm has four showrooms in Thrissur town. 3. 'Inner Shoppe' is a trademark registered by the **F.A.O.No.189/2016** **2** respondent firm and the respondent obtained a certificate from the Registrar of Trade Marks in this regard. The name of the firm and the trademark is the same. The trademark is valid and subsisting in all respects. Respondent firm has invested huge amounts in the garment business and substantial amounts are being spent on advertisements each year. By frequent advertisements in various print and electronic media, the volume of business of the respondent firm has increased. Besides, the respondent firm is maintaining its own website. The respondent firm, as a result of the continuous advertisements and marketing technics, have earned a goodwill. Customers are satisfied not only with the quality of the products, but also with the fairness and transparency in the business dealings. According to the respondent, it has earned a good reputation in the area of its operation. Respondent firm has all the required licences for doing the business. While so, the respondent noticed the appellant hastily trying to **F.A.O.No.189/2016** **3** establish a showroom and sales counter about 100 meters away from the respondent's establishment assigning the very same title 'Inner Shoppe'. The appellant took hectic steps to furnish a showroom and start a business very close to the respondent's premises. The appellant made all arrangements for starting a business with a trade name infringing the right of the respondent. The appellant has no right to use the trade name 'Inner Shoppe' as that is the registered property of the respondent firm. Hence the suit for permanent prohibitory injunction is filed for restraining the appellant, his agents, servants, etc. from using the trademark 'Inner Shoppe' in violation of the provisions of law. 4. I.A.No.4927/2014 is the application for temporary injunction filed alongwith the suit. An interim order was passed by the District Court on 30.12.2014 restraining the appellant from using the name 'Inner Shoppe' which is the trade mark of the respondent. **F.A.O.No.189/2016** **4** 5. Subsequently, I.A.No.69/2015 is filed by the respondent alleging that the appellant violated the injunction order duly served on him by starting and continuing the business with a name 'Nayans Inner Shoppe'. The respondent alleged that this is in flagrant violation of the prohibitory order passed against and communicated to the appellant. Respondent contended that the appellant has contumaciously violated the order fully knowing its scope and legal effect. 7. The appellant filed a counter in this application. According to him, he intended to carry on a business under the name and style 'Nayans Inner Shoppe'. The intended business is to deal with inner garments of ladies and gents and other ready-made items. The term 'Inner Shoppe' means a shop dealing with inner-wears. This is used only to identify the goods that could be purchased from the business concern. The appellant never infringed any of the rights of the respondent. The appellant has obtained **F.A.O.No.189/2016** **5** permission from Thrissur Corporation for the use of the name 'Nayans' and also the same name was registered with the Department of Commercial Taxes, Government of Kerala. The respondent has no right to restrain the appellant from doing garment business with the name 'Nayans Inner Shoppe'. Therefore, he requested to dismiss the application under Order 39 Rule 2A of the Code. 8. The lower court, after considering the rival contentions of the parties, allowed the application in the following terms: “In the result, both the above petitions are allowed. As it is found that the defendant has willfully disobeyed the order of the temporary injunction in IA 4927/2014 he is sentenced to imprisonment in civil jail for a period fo one month. Further it is also ordered that the properties of the respondent mentioned in the schedule be attached for violating the order of injunction passed by my learned predecessor. It is also ordered that the respondent shall remove the name “Inner shoppe” from the name-board put up in front of the shop and other **F.A.O.No.189/2016** **6** places at the town and each and every material on which the name “Inner Shoppe” has been printed and delivered.” Feeling aggrieved, the appellant has come up in this appeal. 9. Heard the learned counsel for the appellant and the learned counsel appearing for the respondent. 10. Learned counsel for the appellant submitted that the interim order passed in this case only restrained the appellant from using the trade name 'Inner Shoppe'. The appellant, by prefixing 'Nayans' to 'Inner Shoppe', has changed the trade name and there is no possibility of any confusion or deception arising out of user of such a name. The respondent is not affected in any manner. Per contra, learned counsel for the respondent would contend that the appellant's action is violation of his statutory right provided by the Trade Marks Act. Section 29 of the Act deals with the infringement of registered trademarks. It will be apposite to note the definition of 'mark' in Section 2(m). The definition of 'mark' shows that it includes a device, **F.A.O.No.189/2016** **7** brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof. Section 29 of the Act is extracted for clarity: ## _**“**_ **29. Infringement of registered trade marks:-** (1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark. (2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which because of- - (a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or - (b) its similarity to the registered trade mark and the identity or similarity of the goods or services **F.A.O.No.189/2016** **8** covered by such registered trade mark; or - (c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark. (3) In any case falling under clause © of sub-section (2), the court shall presume that it is likely to cause confusion on the part of the public. (4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which- - (a) is identical with or similar to the registered trade mark; and - (b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and - (c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark. **F.A.O.No.189/2016** **9** (5) A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered. (6) For the purposes of this section, a person uses a registered mark, if, in particular, he- - (a) affixes it to goods or the packaging thereof; - (b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark; - (c) imports or exports goods under the mark; or - (d) uses the registered trade mark on business papers or in advertising (7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee. **F.A.O.No.189/2016** **10** - (8) A registered trade mark is infringed by any advertising of that trade mark if such advertising- - (a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or - (b) is detrimental to its distinctive character; or - (c) is against the reputation of the trade mark. (9) Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall be construed accordingly.” 11. It is well settled that a registered trademark is the property of the holder of registration. A registered trademark will be infringed if a person, in the course of his business, uses a trade mark identical with or deceptively similar to the trade mark in relation to the goods or services in respect of which the registration subsists. Sub-section (2) of Section 29 of the Act enumerates the situations where it is likely to cause confusion on the part of the public. Sub- **F.A.O.No.189/2016** **11** section (5) of Section 29 declares that a registered trademark is infringed by a person if he uses such registered trademark as his trade name or part of his trade name or name of his business concern or part of the name of his business concern dealing in goods or services in respect of which the trademark is registered. On a reading of Sub-section (5) to Section 29 of the Act, it would reveal that the respondent has a grievance against the appellant that, the latter has appropriated the entire trade name “Inner Shoppe” and a word 'Nayans' is prefixed to the trade name of the respondent. The question to be decided in the suit is whether addition of the word 'Nayans' before the word 'Inner Shoppe' will avoid an infringement of the trademark? If that question is properly answered, the entire issue involved in the suit could be resolved. 12. A situation in this case has arisen whereby the learned Additional District Judge has found that the appellant has infringed the registered trademark of the **F.A.O.No.189/2016** **12** respondent. Virtually, this is the reason for taking punitive action against the appellant. Viewing from one angle, it can be said that the court below has decided the core issue in the suit by pronouncing that the appellant has infringed the trademark and he is liable to be punished. However, learned counsel for the respondent would contend that what is decided by the court below in a petition under Order 39 Rule 2A C.P.C. is whether the appellant has violated the injunction order passed in the case. The justification claimed by the appellant for starting and continuing a business by name 'Nayans Inner Shoppe' is that by addition of the word 'Nayans', the question of infringement does not arise. So, the cardinal question to be resolved is whether there is any infringement of trademark as complained by the respondent. It is true that the appellant is bound to obey the orders of the court. He cannot be allowed to flout the orders of the court with impunity. It is also settled by judicial pronouncements that a petition under Order 39 **F.A.O.No.189/2016** **13** Rule 2A C.P.C. is an independent proceedings and he does not depend on the result of the suit. Stated differently, even if the suit is ultimately dismissed, the action for violating injunction order can be punished if the ingredients are established. Therefore, before deciding the controversy in the suit, it may not be proper for the District Court to pronounce that there was an infringement by the appellant, that too in an application for taking action against alleged violation of the injunction order. 13. In this context the trial court should consider the distinction between infringement of a right and passing off. The Supreme Court in **Durga Dutt v. Navaratna Pharmaceuticals [AIR 1965 SC 980]** lucidly explained thus: “While an action for passing off is a common law remedy being in substance an action for deceit, that is, passing off by a person of his own goods as those of another, that is not the gist of an action for infringement. The action for infringement is a statutory remedy conferred on the registered **F.A.O.No.189/2016** **14** proprietor of a registered trade mark for the vindication of the exclusive right to the use of the trade mark in relation to those goods. The use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement. No doubt, where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a colourable imitation of a trade mark in a passing off action would also be such in an action for infringement of the same trade mark. But there the correspondence between the two ceases. In an action for infringement, the plaintiff must deceive, but where the similarity between the plaintiff's and the defendant's marks is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's rights are violated. Expressed in another way, if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get-up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale marked differences, or indicate clearly a trade origin different from that of the registered **F.A.O.No.189/2016** **15** proprietor of the mark would be immaterial; whereas in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff.” 14. Learned counsel for the respondent contended that due to the action of the appellant everyday the respondent is suffering pecuniary loss. If the respondent is aggrieved by the continued act on the part of the appellant, certainly he has to seek compensation for the loss sustained. Viewing from this angle also, I find that it is better to dispose of the suit expeditiously than spending time on this application. However, it is made clear that the injunction order passed by the court below will continue and the question whether the appellant has violated the injunction order shall be determined after taking evidence in the suit and, if necessary, in the application as well. In the result, the appeal is allowed and the impugned order passed on I.A.No.69/2015 is set aside. This application shall be considered separately at the time of **F.A.O.No.189/2016** **16** disposal of the suit. The District Court shall dispose of the suit as expeditiously as possible, at any rate, within a period of three months from the date of receipt of this judgment. SD/- **A. HARIPRASAD JUDGE** JV