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HC holds using term “FILEX” for stationery indicates connection between plaintiff & defendant, passes decree of permanent injunction

Filex Systems Private Limited vs. Deepika File Products

This suit has been filed by Filex Systems Private Limited (Plaintiff) for permanent injunction for restraining Deepika File Products (Defendant) from passing off the trademark ‘FILEX’ in respect of stationery including file covers, files, folders, diaries, note pads and office requisites.

Plaintiff stated that ‘FILEX’ is the primary, essential, distinctive and material part of their corporate name and has been in use since 1996 for the business of manufacturing and selling office files, office stationery, paper and paper products, cleansing wipes and other related products. Since, it has been used extensively and for 19 years it has become distinctive in nature. Plaintiff learnt in November 2015 that the Defendant is using identical mark to market their products in the same segment and even after sending a cease and desist notice to Defendant, he has continued selling the said products. 

Defendant argued that registered trademark of the Plaintiff is ‘SOLO’ and not ‘FILEX’. All the branding and advertisements of Plaintiffs promote ‘SOLO’. Further Defendant stated that they are using FILEX since 2012 whereas Plaintiff has never used the mark ‘FILEX’. Hence, entire goodwill of Plaintiff was on the mark ‘SOLO’ and not on ‘FILEX’. It is also claimed by the Defendant that Plaintiff knew of their existence since 2012 as they both are members of Delhi File Nirmata Sangh. Moreover, Defendant’s area of operation is North India whereas Plaintiff’s area of operation is mostly South India and only a few cities of North India and there is a huge variation in the prices of the goods of Plaintiff and Defendant which reduces any possibility of confusion. 

Plaintiff relied on Laxmikant V. Patel vs Chetanbhai Shah (2002) 3 SCC 65 to assert that the name under which a business trades will almost always be a trade mark and will have attached to it a goodwill that the Courts will protect and an action for passing off will lie wherever the defendant company’s name, or its intended name, is calculated to deceive. 

After analyzing the arguments of both counsel, High Court observed that FILEX is a coined word and it was used by Plaintiff to incorporate an entity. However, Defendant has failed to explain why he started using FILEX. Hence, it can be inferred that defendant knew the goodwill attached to FILEX and adopted it to take advantage of the same. 

High Court relied on Sirmour Remedies Pvt. Ltd. vs Kepler Healthcare Pvt. Ltd ( 2014 SCC OnLine Cal 2703) where it was held that “there is no bar to use of more than one mark. Hence, use of SOLO would not disentitle the Plaintiff from using FILEX simultaneously with SOLO and in relation to the same goods.”

HC referred to Laxmikant V. Patel vs Chetanbhai Shah (2002) 3 SCC 65 wherein it was held  that, “goodwill and reputation attaches to the trade name. It is for this reason only that the law i.e. The Companies Act, 2013 and the The Limited Liability Partnership Act. 2008 also bar registration of a company or an LLP with the same name.”

High Court while examining the definition of ‘mark’ in Section 2(m) thereof as including a name; Section 2(o) defines “Name” as including any abbreviation of a name; and, Section 2(zb) inter alia defines trademark as a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and  observed “The name of the manufacturer of goods is certainly capable of distinguishing the goods of one person from those of others and any similarity between the name and a mark though of goods emanating from a manufacturer with a different name, is likely to cause confusion.” 

Further, the High Court also relied on Manohar Singh Chadda v Sheetal Sweets (2000 SCC OnLine Del 362) where it was held that the name under which a person transacts business is definitely one of the most concomitant of goodwill and the first thought which would arise in the mind of any businessman in relation to the term ‘goodwill’ would be the name of the concern. 

Thereafter HC again referred Laxmikant V. Patel vs Chetanbhai Shah(2002) 3 SCC 65 wherein High Court had mentioned following factors : 

(i) a person may sell his goods under a trading name or style and with the passage of time, such business associated with a person acquires a reputation or goodwill which becomes a property which is protected by Courts; 

(ii) a competitor initiating sale of goods in the same name or by imitating that name results in injury to the business of one who has the property in that name; 

(iii) law does not permit any one to carry on his business in such a way as would persuade the customers in believing that the goods belonging to someone else are his or are associated therewith; 

(iv) it does not matter whether the latter person does so fraudulently or otherwise; and,

(v) principles applicable for passing off action in case of trade marks were held to apply also to trade or business name. 

HC in the present case, observed that “FILEX‟, forming a prominent part of the trade name of the plaintiff, is not a dictionary word and is an invented word, easily identifiable with the goods / products in which the plaintiff deals. Owing to the said peculiarity, the possibility of trade circles using “FILEX‟ instead of “SOLO‟, for referring to the plaintiff or its products, can well be fathomed. For the said aspect, it is not deemed necessary to put the parties to trial, in which the parties examine self- serving witnesses and on the basis whereof no inference can be drawn, with the Court being ultimately left even after trial to draw its own inference. Hence, HC referred to Mahendra & Mahendra Paper Mills Ltd. (2002) 2 SCC 147 and Larsen and Tuobro Ltd. Vs. Lachmi Narain Traders (2008) 149 DLT 46 (DB) that in suits relating to infringement and passing off, examination of self serving witnesses by the parties is of no avail and it is ultimately the Court which has to take a call on similarity / deceptive similarity, keeping in mind the perspective of a consumer with an ordinary intellect and a non- discerning eye.  

Thus, the High Court held plaintiff with “FILEX” has a prominent part of its trade name. The defendant has given no explanation whatsoever, as to why the defendant started using the mark “FILEX” for the same products. 

HC further mentioned that The plaintiff, even if not using “FILEX‟, as a trademark and using only “SOLO” as its trademark, cannot be expected to not show its name on its products, in its advertisements and on its invoices. Once the plaintiff shows so, the possibility of the persons dealing with the plaintiff and/or the plaintiffs products, associating the plaintiff and its products with the word “FILEX” which as aforesaid is peculiar to the business of files, instead of as “SOLO”, cannot be ruled out. Thus, the need to put the suit to trial to determine whether the products of the plaintiff prominently showing the name of the plaintiff and/or using “FILEX”, besides as part of the name of the plaintiff, were in the market earlier or not, is not felt. The plaintiff, being the senior user of the said coined word/mark cannot be restrained from using or showing its name with “FILEX” as a prominent part in its advertisements, invoices and on its products. HC relied on B.K. Engineering Co. vs U.B.H.I Enterprises (Regd.) 27 (1985) DLT 120 (DB), wherein it was held that “the purpose of the law of passing off is not only to protect private interests but also public interest. It is essential to ensure that members of the public, wanting to deal with the plaintiff and/or buy products of the plaintiff are not deceived into dealing with the defendant and/or buying the products of the defendant.”

Thereafter, HC reiterates that considering the coinage / adoption by the plaintiff of the name “FILEX” for a business of manufacture and sale of files, the reputation and goodwill is res ipsa loquitur and the customers of the plaintiff are likely to seek the goods of the plaintiff by remembering either “SOLO” or “FILEX” and use by defendant of the mark “FILEX” is likely to indicate a connection between the plaintiff and the defendant. 

In addition, HC mentioned that since Defendant has no possibility of succeeding in its defence and the Plaintiff is entitled to a decree for injunction. However, High Court decided against the claim of Plaintiff for mesne profits/damages to trial and to award any costs of the suits. 

 

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