Important RulingsRulings

“Magic Moments” Manufacturer wins injunction against alcoholic beverage manufacturer for the use of the mark “ELECTRA”

Radico Khaitan Ltd. vs Devan Modern Breweries Ltd.

In the present case, Radico Khaitan Ltd. (Plaintiff) filed a suit for permanent injunction against M/s Devan Modern Breweries Ltd. (Defendant) restraining infringement of trademark, passing off and other remedies.  The Plaintiff states that it is one of the largest liquor companies in India and it’s the registered owner of various marks/labels having the word mark “ELECTRA” as their prominent feature in Class 33 of the Trade Marks Act, 1999 since 23rd December, 2004. Plaintiff further states that Plaintiff adopted the mark ELECTRA for Vodka in September, 2004. Plaintiff submits that in 2014 the Plaintiff decided to use the mark ELECTRA for Ready to Drink alcoholic beverages in Ready To Drink bottles, and in June 2015, officially launched its Ready to Drink product under the aforesaid mark combined with its flagship brand MAGIC MOMENTS. Plaintiff states that Plaintiff came across the Defendant’s Trademark Application dated 25th April, 2013, for the mark ELECTRA under Class 32 for goods “Beers, mineral and aerated waters, and other non-alcoholic drinks; fruits drinks and fruit juices; syrups and other preparations for making beverages which was filed on a “Proposed to be Used” basis.

Defendant contends that its existing mark GODFATHER is a well known mark and it applied for registration of the mark ELECTRA bearing no. 2519404 on 25th April, 2013 on a proposed to be used basis and the same is pending registration.  Defendant states that the defendant was the prior user of the mark “GODFATHER ELECTRA”. Defendant states that the Defendant had honestly and bonafidely adopted the trademark GODFATHER ELECTRA on 25th April, 2013 and had been continuously using the same during the course of trade as its owner and proprietor except in Delhi owing to the ex-parte interim injunction dated 13th March, 2018. Defendant states that the first invoice placed on record which showed actual use of the trademark MAGIC MOMENTS ELECTRA by the plaintiff was dated 18th March, 2016, whereas the Defendant had admittedly been using the trademark GODFATHER ELECTRA in relation to Beer and other goods falling under Class 32 since 13thAugust, 2014. Defendant emphasized that though the Defendant may not be a prior registrant of the mark ELECTRA, it was a prior user and further submitted that as a prior user of the trademark, the defendant had rights superior to a prior registrant of the same mark. Defendant states that the Plaintiff had not been in continuous use of the trademark ELECTRA since 2004, i.e. the date from which they claimed use of the trade mark. Defendant further submits that due to non-use of the trademark ELECTRA from 2004 until June, 2015 the Plaintiff had no protectable interest in the impugned trademark.

HC observes that Plaintiff sent a notice to the Defendant, to which the Defendant replied by denying the allegations and demanded the relevant documents substantiating the Plaintiff’s claims. The Plaintiff failed to respond to the Plaintiff even after the Plaintiff submitted the aforementioned documents to the Defendant. Defendant filed a suit for declaration to hold groundless threats as unjustifiable and for permanent injunction under Section 142 of the Trade Marks Act 1999 against the Plaintiff in the District Court, Saket.

HC peruses the facts on record and analyses the scheme of the Trade Marks Act, 1999, to examine the rights of registered proprietors of the trade mark as well as the remedies available to an aggrieved party on account of non-use of a registered trade mark, as the Plaintiff has restricted its suit for infringement and observes that Section 18 of the Trade Marks Act, 1999, permits an application for registration of a trademark to be filed on a used or proposed to be used basis. HC further derives from the aforementioned provision that registration of a trademark is not dependent on use and postulates that an application for registration of a trademark can be made on a proposed to be used basis. Section 28 of the Trade Marks Act, 1999 gives a registered proprietor of a trademark the exclusive right to use the trademark. Section 29(2)(a) of the Trade Marks Act, 1999, postulates that a registered trademark is infringed if a person, not being the registered proprietor uses an identical/deceptively similar mark in relation to goods or services similar to that for which the trademark has been registered. HC observes that in the event of non-use of a registered trademark, the Trade Marks Act, 1999 provides a remedy to the aggrieved party to seek removal of the registered trademark from the register under Section 47(1)(b). HC further observes that under the Section 2(2)(c)(i) of the Trade Marks Act, 1999 use of a trademark is not limited to sale of goods or services bearing the trademark only. HC observes that section 27(2) of the Trade Marks Act, 1999 clearly stipulates that nothing in the said Act shall affect rights of action against any person for passing off goods as the goods of another person. Accordingly, the Trade Marks Act, 1999 affords no bar to a passing off action.  Prior use and goodwill are two of the indispensible ingredients, required to be positively established by the party seeking injunction, in a passing off action.

HC observes that in the present case, the Plaintiff being the registered proprietor of the mark and there being no passing off action filed by the defendant, Plaintiff has the exclusive right to use the same. HC finds that Section 34 of the Trademarks Act 1999 provides a defence in a suit for infringement and permits second registration of the same mark provided the second applicant had been continuously using that trademark from a date prior to the use or date of registration of the first proprietor/registered user’s trade mark, whichever is earlier. In the event the Registrar concludes that the conditions precedent in Section 34 are satisfied and registers the trade mark of the second applicant, then the exclusive right to the use of the trade marks shall not be deemed to have been acquired by anyone of those persons as against any other of those persons merely by registration of the trade mark.

HC places reliance in the decision of the Supreme Court in S. Syed Mohideen vs. P. Sulochana Bai, (2016) 2 SCC 683 where it has held, in case of conflict between two registered proprietors, evaluation of better rights in common law is essential to enable the court to determine whose rights are better and superior in common law which have been recognized in the form of registration. It was held that “the action for passing off which is premised on the rights of prior user generating a goodwill shall be unaffected by any registration provided under the Act.” HC states that a heading of a Section cannot control the plain words of a Statute, but may explain ambiguous words.  It is well settled law that the heading of a Section does not constitute an independent defence. The heading of a Section can only be an approximation and may not cover all the detailed matters falling within a Section. Further, in case of conflict between the plain language of the provision and the meaning of the heading or title, the heading or title would not control the meaning which is clearly and plainly discernible from the language of the provision there under.

HC finds that Section 34 of the Trade Marks Act, 1999 at the highest, is a defence in a suit for infringement provided the conditions precedent in the said Section are satisfied, namely, that the Defendant’s use of the impugned mark is prior to the Plaintiff’s use of the mark and/or prior to Plaintiff’s registration, whichever is earlier i.e., in the present case the Defendant’s use has to be prior not only to Plaintiff’s use but also to Plaintiff’s registration. In the present case the Plaintiff’s application for registration of the word mark ELECTRA bearing no. 1327603 is dated 23rd December, 2004 and upon registration on 28th March, 2007, it relates back to the date of the application; whereas the Defendant’s earliest claimed use is only of 25th April, 2013 or 13th August, 2014. Consequently, the condition precedent in Section 34 of the Trade Marks Act, 1999 is not satisfied in the present case as the Defendant’s use is not prior to the Plaintiff’s registration of the trade mark.  Hence, HC finds that the defence of Section 34 is prima facie not available to the Defendant.

HC observes that the Plaintiff had been continuously using the impugned mark ELECTRA with regard to pre-launch and preparatory activities at least since 2006-07. HC is prima facie of the view that the Plaintiff’s prelaunch and preparatory activities with regard to the trade mark ELECTRA amounts to use under the Trade Marks Act, 1999. HC finds that the Plaintiff had engaged the services of Quantum Market Research Pvt. Ltd. in 2006 for conducting category and concept research and study of the brand ELECTRA for Vodka. HC observes that Plaintiff had entered into an agreement with Hindustan National Glass & Industries Ltd. in 2007 for developing, producing and supplying glass bottles of various brands including ELECTRA. HC agrees with Plaintiff’s averments regarding continuous use of the registered word mark ELECTRA by the Plaintiff since contemporaneous documents have been filed along with the plaint.

HC places reliance on Hardie Trading Ltd. and Anr. Vs. Addisons Paint and Chemicals Ltd., 2003 (27) PTC 241 (SC) in which the Apex Court has given an expansive and wide interpretation to the expression “use”, contrary to the judgment of a learned single judge of High Court in L.D. Malhotra Industries Vs. Ropi Industries (supra).  The relevant portion of the said judgment reads as under:-

“42. This shows that the use may be other than physical. It may be in any other relation to the goods. Given this statutory meaning, we see no reason to limit the user to use of the goods or to sale of goods bearing the trade mark.

  1. In Hermes Trade Mark [1982 RPC 425], the registered proprietor had inserted advertisements in which the trade mark appeared in relation to the watches it manufactured in the annual trade publication. It was also in evidence that the registered proprietor placed an order for parts of the watches during the period of alleged non-use although the actual sale of the watches took place subsequently. In this factual background, the words, “other relation” in an identical statutory provision in the United Kingdom were construed to mean “something other than actually being upon the goods or in physical relation to them — that would cover the use of the mark,….., for example, in advertisements, in invoices, in orders and so on”. It was also said, the phrase “in the course of trade” must be wide enough to embrace the steps necessary for the production of the goods as well as the actual placing of them on the market. It was held that even though there was no use of the mark upon or in physical relation to the goods, but it was used in “other relation” i.e. to say in non-physical use.
  2. A more recent example of the law in England of such “non-physical use” is to be found in Bon Matin Trade Mark, 1989 RPC 536. The trade mark was registered in the United Kingdom in 1979 in respect of a range of cosmetics. The registered proprietor was a resident of France and manufactured and sold the goods there. In 1984, an application was made to expunge the registration on the ground that there had been no bona fide use of the mark in the United Kingdom for a continuous period of five years. The only use of the mark prior to the date of the application was by issue of price lists and promotional literature on two occasions. A distributor was appointed by the proprietor in the United Kingdom subsequent to the application for rectification and the first sale of the goods took place 3 years after that. The Court held that the intention of the registered proprietor to seek to establish a market not on any temporary basis but on the basis of continuous sales had been proved. As they had been struggling to market the goods in the United Kingdom and ultimately, were successful in finding a distributor, it was held that this was sufficient use of the mark by the proprietor for the purpose of defeating the applications for its removal.
  3. In Section 2(2)(b) of the Act, we have the additional words “any” and “whatsoever” qualifying the words “other relation” giving the words a much wider meaning. Reading this definition into Section 46(1) it is clear that the word “use” in Section 46(1) may encompass actions other than actual sale.
  4.  As far as this country is concerned, Section 46(3) of the Act statutorily prescribes the intention to abandon as an essential component of non-use for the purposes of Section 46(1). In American Home Products Corporation v. Mac Laboratories Pvt. Ltd and Anr., [1981] 1 SCC 465, this Court was called upon to decide whether there was any bona fide use of the trade mark in relation to goods by the proprietor or for the purposes of Section 46(1)(a) of the Act. Under Section 46(1)(a), the trademarks which were registered without any bona fide intention to use them in relation to the goods and which have in fact not been used by the proprietor from the date of such registration upto to the date of the application of registration, are liable to be taken off the register. The Court held that both the intention of the proprietor not to use the trade mark at the time of registration and also the actual non-use of the trade mark subsequent thereto had to be proved. The evidence in that case was that prior to registration, the proprietor had entered into a collaboration agreement with an Indian company to manufacture and, market its products. Subsequent to the registration, the Indian company obtained a licence for the purpose of imposing a machine to manufacture proprietor’s goods, obtained samples from the proprietor and took other steps to manufacture the goods, but no products were in fact put on the market. After the application for rectification was filed, a registered user agreement was entered into between the proprietor and the Indian company. It was not in dispute that the goods had not been sold during the alleged period of non-use. Dismissing the application for rectification, this Court held :

“A person who intends to manufacture goods on has made preparations for the manufacture of goods but the manufacture has not commenced and, therefore, goods have not been marketed is nonetheless entitled to get the trade mark which he proposes to use in relation to those goods registered. In the present day world of commerce and industry, a manufacturing industry can neither be commenced nor established overnight. There are innumerable preparatory steps required to be taken and formalities to be complied with before the manufacture of goods can start and the manufactured goods marketed. The process must of necessity take time. If the position were that the mere non-user of a trade mark for the period mentioned in clause(a) of Section 46(1) would make a trade mark liable to be taken off the Register, it would result in great hardship and cause a large number of trade marks to be removed from the Register, because the moment one month has elapsed after the registration of a trade mark has been ordered, a trade rival can make an application on the ground set out in clause (a) of Section 46(1) claiming that there has been no bona fide use of the trade mark up to a date one month before the date of his application.”

  1. Although the decision was given in the context of Section 46(1)(a), nonetheless, it would show that an intention to use does not necessarily mean that the proprietor must show the marketing of the goods under the trade mark….”

HC states that it is of the prima facie opinion that the Plaintiff has been using the trademark ELECTRA since at least 2006 and consequently, the Defendant is not even the prior user of the impugned mark.  HC further relies on the decision of the Apex Court in M/s Gujarat Bottling Co. Ltd. and others v. Coca Cola Company and others (1995) 5 SCC 545 has held that protection of a registered trade mark is not dependent on its use. The relevant portion of M/s Gujarat Bottling Co. Ltd. and others v. Coca Cola Company and others (supra) is reproduced herein below:-

“11.…In respect of a trade mark registered under the provisions of the Act certain statutory rights have been conferred on the registered proprietor which enabled him to sue for the infringement of the trade mark irrespective of whether or not mark is used.…”

HC observes that the use of the impugned mark by the Defendant prima facie constitutes an infringement under Section 29(2)(a) of the Trade Marks Act, 1999. HC further opines that the Defendant, being a big corporation, had failed to discharge its duty of care and due diligence as it had not conducted a search in the Trade Marks Registry with regard to the impugned mark ELECTRA for goods falling under Classes 32 and 33 before adopting the said mark.  HC states that it is pertinent to mention that it is an admitted position that Beer and Alcoholic goods are similar goods traded under the same channels. HC additionally observes that there is also no delay on part of the Plaintiff as the Defendant had been put to notice on 02nd November, 2016 when the Plaintiff discovered the Defendant’s use of the impugned mark ELECTRA. HC finds that following the legal notice dated 02nd November, 2016 there had been a continuous exchange of correspondence between the parties as would be apparent from the Defendant’s reply dated 17th November, 2016 as well as supply of all of the Plaintiff’s documentation to the Defendant at its request and reminder notices sent by the Plaintiff to the Defendant on 03rd February, 2017 and 13th May, 2017.

HC further relies on the decision of the Apex Court in Midas Hygiene Industries P.  Ltd. & Anr. v. Sudhir Bhatia & Ors., 2004 (28) PTC 121 (SC) where it was held that the relief of an injunction in cases of infringement of a registered trademark injunctions must ordinarily follow. Keeping in view the aforesaid, HC opines that a prima facie case of infringement of trademark is made out in favour of the Plaintiff and balance of convenience is also in its favour and irreparable harm or injury would be caused to the Plaintiff if an injunction order is not passed. Consequently, HC orders that the Defendant and any of its concerns (whether related directly or indirectly) is restrained from manufacturing, exporting, marketing, offering for sale, selling, advertising or in any manner dealing with any Alcoholic Beverages including but not limited to Beer and Ready to Drink Beverages under the trademark “ELECTRA‟ or from adopting any other mark or label which is identical or deceptively similar to the Plaintiff’s registered trade mark ELECTRA.

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *