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HC restores Red Sole trademark appeal and holds that commercial suit seeking permanent injunction cannot be dismissed at very first hearing

Christian Louboutin Sas vs. Abubaker & Ors.

The present appeal has been filed by Christian Louboutin SAS (Appellant) against the judgment dated 25th May 2018 passed by the Single Judge of High Court of Delhi dismissing the Appellant’s suit without issuing any summons to the Respondents. 

The aforementioned commercial suit was filed by the Appellant for permanent injunction to restrain the Defendants from infringing their trademark, passing off, unfair competition, dilution and tarnishment, apart from damages, rendition of accounts of products and delivery up etc. Appellant, through market survey, came across products of Defendants’ infringing their ‘Red Sole’ trademark on ladies’ shoes. After investigation Appellant came to know that Defendants are engaged in counterfeiting activities by selling shoes with their ‘Red Sole’ trademark.

Appellant, in the plaint, mentioned that ‘Red Sole’ trademark has been registered in class 25 in respect of the shoes, except orthopedic footwear, with the sole condition and disclaimer that ‘the mark shall be limited to the colour Red as shown in the representation on the Form of the application (Pantone No. 18.1663TP)”. It is claimed by the Appellant that specific tone of red is used on outsole of a shoe and it was popularized by their use. It is also claimed that this ‘Red Sole’ mark enjoys trans-border reputation in India and consumers are aware of their goodwill and reputation even before the said mark was formally launched.

Appellant, along with commercial suit, had also filed IA No. 6898/2018 under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure seeking an interim injunction to restrain the Defendants inter alia from manufacturing, selling or offering for sale, footwear including ladies shoes bearing the ‘Red Sole’ trademark. 

This application along with commercial suit was heard by the Single Judge of Commercial Division of this Court on 18th May 2018 where through the judgment dated 25th May 2018 suit was dismissed in limine. Suit was dismissed on the following grounds – 

  1. In view of the ‘admissions’ in the plaint, the suit ought to be dismissed in terms of Order XII Rule 6 CPC.                  
  2. Even taking all the averments in the plaint to be ‘completely correct’, the Plaintiff would not be entitled to the reliefs of infringement or passing off or claim “existence of dilution, unfair competition etc”.                                             
  3. Use of a single colour of the Plaintiff does not qualify the single colour to be a trademark in view of provisions of Sections 2(m) and 2(zb) of the Trade Marks Act, 1999 (‘Act’).                                                                                
  4. “Section 30 (2) (a) of the Trade Marks Act, in the facts of the present case, is a complete disentitlement to the reliefs claimed by the Plaintiff on the basis of causes of action pleaded in the plaint”.                                             
  5. The Plaintiff was also not entitled to the relief of injunction against passing off because                                      a.  a single colour cannot become a trademark and the Plaintiff cannot claim rights in one colour as a trademark for exclusive use of the Plaintiff.                                                                                                  b. The issue of passing off would arise only if there was disentitlement in the defendants to not use the red colour shade in the soles of the ladies footwear being manufactured and sold by the Defendants, but there is no such disentitlement for the Defendants because the user by the defendants of the red colour shade on the footwear is pursuant to the legal rights conferred upon the defendants under Section 30(2)(a) of the Trade Marks Act as already discussed above.                                                                                                        c. There would be no deception since the word mark under which the Plaintiff were selling their goods was “CHRISTIAN LOUBOUTIN”, which was completely different from the Defendants‟ word mark/trademark ‘Veronica’.                                                                                                                                                                         
  6. Although the learned Single Judge did not base his conclusions on Order VII Rule 11 CPC, he nevertheless observed that “the suit does not contain any legal cause of action because even if whatever are the causes of action in the plaint are taken as correct, even then such causes of action taken as true, will not entitle the plaintiff for the reliefs as claimed in the present suit”.

Counsel of the Appellant relied on Deere & Company v Mr. Malkit Singh (CS (COMM) 738 of 2018) and Christian Louboutin Sas v Mr. Pawan Kumar (CS (COMM) 714 of 2016) to assert that single colour is entitled to protection as a trademark. However, Single Judge in his impugned judgment relied to Padma Sundara Rao (Dead) v State of Tamil Nadu ((2002) 3 SCC 533) and N. Bhargavan Pillai (Dead) v State of Kerala ( (2004) 13 SCC 217) to hold that since cited judgments have been incorrectly decided therefore, they are not binding. These judgments did not consider the definition of ‘trademark’ under section 2(m) of the Trade Marks Act, 1999 and also failed to notice Section 30(2) of the Act. 

Court, in this appeal, determined following question of law – 

  1. Can a commercial suit seeking a permanent injunction against infringement of a registered trademark be dismissed at the very first hearing of the suit invoking Order XII Rule 6 CPC? On the facts of the present case, can it be said that the plaint disclosed ‘admissions’ of the Plaintiff that would disentitle it to the reliefs prayed for in the suit? 
  2. Was the learned Single Judge, in the facts and circumstances of the present case, without the Defendants entering appearance and raising any plea, justified in holding that “a single colour cannot under any circumstances be given the benefit for being used as an exclusively owned trademark of a manufacturer/seller etc.” and that the device mark of the Plaintiff “could legally not have been got registered as a trademark.”?
  3. Was the learned Single Judge justified in proceeding to dismiss the suit disagreeing with the correctness of the judgments of two co-ordinate benches of the High Court on the very issue, without referring the matter to a larger Bench?

While analyzing the first question of law, Court observed that Order XII Rule 6 of CPC is applied when there is an ‘admission’ by the Plaintiff of ‘truth of the whole or any part of the case of any other party’. However, in the absence of appearance of the Defendants, Single Judge could not have heard their case. Court observes that it cannot agree with the Single Judge that there is any ‘admission’ by the Plaintiff of any case that may have been put up by the Defendants. 

HC held that, 

“The word “admissions” in Order XII Rule 6 CPC has to be understood with reference to Order XII Rule 1 CPC which is titled “Notice of Admission of case” and states that “any party to a suit” may give notice in pleading or writing “that he admits the truth of the whole or any part of the case of any other party.” For invoking Order XII Rule 6 CPC the sine qua non is a party to a suit admitting “the truth of whole or any part of the case or any other party”. There can be no occasion to invoke Order XII Rule 6 CPC at the first hearing without the “other party” appearing in the suit and putting forth its case. This basic requirement appears to have been completely lost sight of by the learned Single Judge. His reasoning is relatable to Order VII Rule 11 CPC, particularly when he observes: “suit plaint even if is taken as completely correct with respect to its averments of the causes of action pleaded i.e. even if the contents of the plaint are deemed to be correct, yet a legal cause of action is not made”.”

Hence, in the absence of the Defendants entering appearance and filing their written statement, and/or reply to the application for interim injunction, the question of the Court determining if there was any ‘admission’ on part of the Appellant of the case of the Defendants on any aspect, did not arise. 

While determining the answer to the first question of law, Court observed that it cannot be said that it discloses any ‘admission’ by the Appellant of the case of the Defendants that would disentitle it to the reliefs prayed for in the suit. 

In the second question of law, High Court observed that, 

In any event, this being a critical aspect of the case of the Plaintiff, any determination whether the Plaintiff was entitled to seek the protection of its registered trademark would require deliberation on the basis of the case put forth by the Defendants. Section 30 (2) (a) is a defence available to a Defendant in an infringement suit. It is doubtful that a Court could suo motu confront the Plaintiff in a case like the present with that defence without the Defendant raising it. Further, for the purposes of that provision whether the device mark is functional feature that is utilitarian or aesthetic or whether as claimed by the Plaintiff it is an arbitrary placement of a colour on an arbitrarily selected portion of a shoe, namely, the outsole of a shoe, to designate its origin is not something that can be finally determined suo motu by the Court at the very first hearing of the suit.

Further, High Court held that since Section 31 of the Act provides for the prima facie presumption of validity of a mark. Therefore, action of Single Judge to check the validity of the trademark in the first hearing of the suit was uncalled for. 

While determining the answer to the second question of law, Court answered in negative. 

While determining the answer to the third question of law, High Court relied on Deere & Company v Mr. Malkit Singh, Christian Louboutin SAS v Mr. Pawan Kumar, Union of India v Raghubir Singh ((1989) 2 SCC 754), Mattulal v Radhe Lal ([1975] 1 SCR 127)) , Acharaya Maharajshri Narandrapra Sadji Anandprasadji Maharaj v The State of Gujarat ([1975] 2 SCR 317) and Mahadeolal Kanodia v Administrator General of West Bengal (AIR 1960 SC 936).

On the basis of the legal positions of the above decisions, Single Judge should have referred the matter to a larger bench of two Judges which supported the case of the Plaintiff. Accordingly, Court answered in the negative.

High Court, on the basis of these aforementioned reasons, set aside the impugned judgment dated 25th May 2018 of the Single Judge and restores the suit CS (COMM) No. 890 of 2018 and the applications pending therein to the file of the Single Judge for disposal in accordance with law. 

 

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