D.Y. Chandrachud, J.
1. The present order will dispose of the Plaintiff's Notice of Motion for an injunction in an action for infringement and passing off. On the request of both the learned Counsel appearing for the contesting parties, the Motion has been taken up for final disposal. The bone of contention in the suit is a trade mark, KORES and the device of a lady typist sitting before a typewriter. The case of the Plaintiff is that in or about 1924, a person by the name of W. Koreska, commenced the business of sale and distribution of duplicating stencils in India. The business in India was first commenced in Calcutta and was gradually extended to Bombay and was carried on under the mark KORES. The Plaintiff is a Company by the name of Kores India Pvt. Ltd. which was incorporated in the year 1936. The mark is stated to have been used in India initially by the firm of Mr. Koreska in respect of goods imported into India by a British Company by the name of Kores . After the formation of the Plaintiff in 1936, the Plaintiff claims to have been appointed as Sole Selling Agent in India. The British Company applied for registration of the mark KORES in India, in Class 16 and Class 3 of the Trade Marks Act, 1940. The case of the Plaintiff is that Koreska assigned the business in India including the trade mark KORES to the Plaintiff. The application for registration of the mark by the British Company is stated to have been amended to the name of the Plaintiff. The registration of the mark was granted with the name of the Plaintiff as Proprietor. The initial registrations are stated to have lapsed. The Plaintiff applied for and obtained registration of the mark KORES (bearing Registration No. 131912) in Class 16. The British Company which held shares in the Plaintiff is alleged to have transferred those shares to an Indian Company by the name of Krishnalal Thirani & Company Limited.
2. The Plaintiff has relied upon the registration of its mark which bears Registration No. 131912 which has last been renewed for a period of 10 years from 13th December 2004. At Exhibit `C'to the plaint is a list of goods and activities of the Plaintiff. Exhibit `D'to the plaint contains a list of 69 registered marks of which the Plaintiff is the proprietor. The Plaintiff is also the registered proprietor of a device which consists of a lady typist working on a typewriter. The advertisement expenses incurred by the Plaintiff for the years 20002001 to 20052006 are as follows:
SALES PROMOTION AND ADVERTISEMENT EXPENSESSr. No. Year Amount (Rs. in lakh) 1 200001 122.47 2 200002 206.58 3 200203 182.27 4 200304 150.96 5 200405 354.65 6 200506 442.72
3. The sales figures of the Plaintiff reflect a revenue of Rs. 165.57 crores for 1997 which has increased to Rs. 222.00 crores for 2006.
4. The Plaintiff has obtained registration of marks in India using the word KORES on an extensive range of stationery and no stationery products, details of which have been furnished in para 6(vi) of the plaint. Seventy one marks are listed out.
5. The foundation of the suit is first, an alleged infringement by the Defendant of the mark of which the Plaintiff claims to be a registered proprietor. The Plaintiff sues for passing off as well. The Plaintiff has claimed that the mark has been extensively used since 1936. During the course of seventy years, the Plaintiff claims to have used the mark Kores and the device of a lady typist sitting in front of a typewriter on an exclusive basis in India. The Second Defendant is a Company incorporated in Austria which has recently commenced exporting selling and distributing products in India through the First Defendant which is an Indian Company. In January 2002, the Second Defendant instituted a suit against the Plaintiff in Germany for infringement and passing of. An order of injunction was issued by a Court in Germany restraining the Plaintiff from using the trade mark KORES in respect of office stationery products in Germany. According to the Plaintiff in or about April 2007, it obtained knowledge of the circumstance that the Second Defendant was exporting stationery products to India which were being sold by the First Defendant under the word mark KORES together with the associated device of, a lady typist. That has led to the institution of the proceeding before this Court for infringement and passing off.
6. On behalf of the Plaintiff, it has been submitted that the averments contained in paragraph 6 of the plaint would interalia show that there has been an extensive use of the trade mark KORES by the Plaintiff in India since its incorporation in 1956. The goods were initially, according to the Plaintiff, imported by a British Company which held shares in the Plaintiff. According to the Plaintiff, the application for registration of the mark KORES came to be amended to include the name of the Plaintiff as Proprietor and registration was granted to the Plaintiff as far back as in 1943. Even after the initial registration had lapsed, the Plaintiff made applications for registration of the mark in India and those applications for registration have been successfully allowed. The Defendants, it is submitted, have not used the mark in India and there is since 1943 no continuous or concurrent user by the Defendants so as to entitle them to use the mark and the associated device in India. The Defendants, besides using the mark KORES and the device of a lady typist, are using the word mark RADEX on the sale of products in India. The Plaintiff has no objection to the use of the mark RADEX by the Defendants within the territory of India.
7. The First Defendant has filed an affidavit in reply on behalf of itself and the Second Defendant. The case of the Defendants is that the Second Defendant was set up in 1887 by Mr. Wilhelm Koreska. From its formation in 1887, KORES became a carbon paper distributor. Products were distributed particularly after 1912 and the activities of KORES were expanded into Europe, Asia and Africa. The countries where the Second Defendant have a presence has been set out in paragraph 5 of the reply to include Spain, Mexico, France, Austria, Netherlands, China and Romania, among other countries. In other words, the case of the Defendants is that the word mark KORES was conceived of by the Second Defendant who alone has the right, title and ownership over the use of the mark in the international market and the First Defendant is entitled to do so under a licence granted by the said Defendant. The circular device 'DACTYLO' is also stated to be of the proprietorship of the Second Defendant. The mark RADEX has been used in India for the previous one year and it has been stated that the Defendants have applied for the registration of the mark.
8. In support of the submissions which have been urged in the affidavit in reply, Counsel appearing on behalf of the Defendants submitted that the essential issue to be considered by the Court is who had originally adopted the mark KORES. Counsel submitted that the facts set out in paragraph 6 of the plaint show that the mark was initially used by Mr. Wilhelm Koreska. It is submitted that the user of this mark by the Plaintiff is neither genuine nor honest.
9. In considering the merits of the rival contentions before the Court on the application for interim relief, it is necessary to advert to the provisions of the Trade Marks Act, 1999. Under Section 28(1) of the Act, the registration of a mark entitles the registered proprietor to the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the mark in the manner provided by the Act. Under Section 29 a registered trade mark is infringed by a person who, not being a registered proprietor or permitted user, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to the goods or services in respect of which the trade mark is registered. Section 34 of the Act provides for a saving of vested rights:
34. Nothing in this act shall entitle the proprietor or a registered user of a registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods or services in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior '
(a) to the use of the first mentioned trade mark in relation to those goods or services by the proprietor or a predecessor in title of his; or
(b) to the date of registration of the first mentioned trade mark in respect of those goods or services in the name of the proprietor of a predecessor in title of his; whichever is the earlier, and the Registrar shall not refuse (on such use being proved) to register the second mentioned trade mark by reason only of the registration of the first mentioned trade mark.
10. The savings provision embodied in Section 34 applies inter alia to a situation where a person has continuously used a trade mark from a date prior to the use of the registered trade mark in relation to those goods or services by the proprietor of the mark prior to the date of registration of the mark. Primafacie, at the present stage, it emerges from the record before the Court that the Plaintiff is the registered proprietor in India of the trade mark KORES. The initial registration of the mark dates back to 1943. At this stage, the record before the Court would indicate that after the lapsing of the initial registration the Plaintiff applied for and obtained registration of the word mark KORES and of the associated device of a lady typist which continues to subsist on the register of trade marks. The Defendant claims to be in the process of moving an application for rectification but it is an admitted position that as of the date of these proceedings, the mark and the device continue to be registered in the name of the Plaintiff. That being the position, the Defendant would within the territory of India be entitled to the benefit of the saving contained in Section 34 of the Act provided, that it establishes before the Court a continuous user of the trade mark from a date prior to the use of the registered trade mark by the Plaintiff. There is prima facie a complete absence in the record of material that would show a prior, continuous or concurrent user of the trade mark by the Defendants in the territory of India.
11. The Trade Marks Act, 1999, has territorial operation within the territory of India. While considering the provisions of the Trade and Merchandise Marks Act, 1958, Mr. Justice P.B. Mukharji observed in Aktiebolaget Jonkoping Vulcan v. V.S.V. Palancichamy Nadar : AIR1969Cal43 that the provisions of the Act must be understood to refer to use within the territory of India and not use abroad. The Learned Judge held that the registration of a mark and its continuance on the register were exclusively within the scope and ambit of domestic law. That was a case involving rectification. The learned Single Judge held thus :'
The Trade Mark law is not extraterritorial; that use abroad in foreign countries under foreign registration can be use within the meaning of the Indian Trade and Merchandise Marks act of 1958. This statute is an Act which provides for registration and better protection of trade marks and for the prevention of the use of fraudulent marks on merchandise. That is its preamble. That preamble I read as confined to the territorial limits of India. Section 1(2) of the statute extends it to the whole of India. The statute establishes trade marks register for India. The definition of a trade mark in Section 2 (v) speaking of use in relation to goods must in my opinion be understood as use within the territory of India and not use abroad. On the authorities quoted above and on the principles that I have just mentioned I am of the opinion that under Section 46 of the Trade and Merchandise Marks Act, 1958 the word 'use' employed therein is use within India. Naturally if it is not used in India that would be a ground for removal from the Indian register. I cannot imagine that a foreign use or use abroad or outside India could be pleaded as a sufficient ground for retaining a registered Trade Mark on the Indian Trade Mark register. I cannot import any extraterritorial notion to construe the Indian Trade and Merchandise Marks Act, 1958 to cover foreign use. I am of the opinion that registration of a Trade Mark and its continuance on the register are exclusively within the scope and ambit of domestic and national law.
12. At this stage, it would be material to advert to the decision of the Privy Council in Star Industrial Company Limited v. Yap Kwee Kor (trading as New Star Industrial Company) 1976 FSPLR 256. The decision of the Privy Council arose upon an action for passing off where the Plaintiff which was a company based in Hong Kong manufactured toothbrushes in that country with a characteristic get up and a letter device called 'ACE BRAND'. The company marketed its toothbrushes in Singapore prior to 1965 particularly for reexport. In 1965, the company stopped marketing its toothbrushes in Singapore. In 1968, the Defendant formed a company with a name similar to the Plaintiff and commenced marketing toothbrushes in Singapore with a getup that was indistinguishable from the mark which was originally used by the Plaintiff. In an Appeal which arose before the Privy Council in an action for passing off ,Lord Parker speaking for the Privy Council held thus:
A passing off action is a remedy for the invasion of a right of property not in the mark name or getup improperly used, but in the business or goodwill likely to be injured by the misrepresentation made by passing off one person's goods, as the goods of another. Goodwill, as the subject of proprietary rights, is incapable of subsisting by itself. It has no independent existence apart from the business to which it is attached. It is local in character and divisible; if the business is carried on in several countries a separate goodwill attaches to it in each. So when the business is abandoned in one country in which it has acquired a goodwill the goodwill in that country perishes with it although the business may continue to be carried on in other countries. (See: Inland Revenue Commissioners v. Muller & Co.'s Margarine Ltd. [1901] A.C. 217, per Lord Macnaghten at p.224; per Lord Lindley at p.235.) Once the Hong Kong Company had abandoned that part of its former business that consisted in manufacturing toothbrushes for export to and sale in Singapore it ceased to have any proprietary right in Singapore which was entitled to protection in any action for passing off brought in the courts of that country.
The Privy Council held that when the business is abandoned in a country in which it has previously been carried on, the goodwill associated with the use of the mark in that country would perish in that country even if continued to be used in other countries.
13. The position that emerges when a mark is used by a company abroad is summarized in the judgment of Oliver L.J. In Anheuser Busch v. Budejovicky Budvar (1984) F.S.R. 413 in which the Court of Appeal in England held thus :'
The first defendant, he submits, were doing no more than honestly using their own business name, in which there was no monopoly and which in any event signified no more than a geographical origin. I am certainly prepared to accept that the first defendants were acting honestly, but the proposition that because they were doing no more than using their own business name which they had previously used in Europe, there was no misrepresentation, begs the question. If the plaintiffs had in fact an established reputation and goodwill in the name in England, the use of the same name by the first defendants, however honest and however much used elsewhere, constitutes a misrepresentation if it leads people to believe that their goods are the goods of the plaintiffs.
14. In Christopher Wadlow's treatise on the Law of passing off (Third Edition 2004) the principles as they emerge from decided cases have been summarized thus:
If a foreign defendant has no goodwill in the jurisdiction then he can rely on bare reputation only if his reputation is strong enough to negative that of the claimant. In that case, the claimant's name or mark will lack exclusive distinctiveness, there will be no misrepresentation to restrain and no need to invoke a specific defence as such. This is the situation exemplified by Brewster Transport v. Rocky Mountain Tours & Transport. Otherwise, the defendant may have a defence properly so called if, and only if, he can claim an antecedent or concurrent goodwill in the jurisdiction, which will only be the case if he has customers here in the sense contemplated by Budweiser. A fortiori, if he has neither reputation nor goodwill in the jurisdiction then despite the fact that he may be making honest use of his own name the defence does not arise at all.
15. The First and the Second Defendants have in the present case commenced business activities in India only since 2006. During the pendency of these proceedings, an interim direction was issued by Mr. Justice A.M. Khanwilkar on 26th November 2007 while recording the statement of the Defendants that they were marketing their products in India in the form reflected in Exhibit `J'to the plaint during the course of the previous three years. The Defendants were directed to place the position on record on affidavit by producing relevant figures of sales duly certified by a Chartered Accountant or an Auditor. The Defendants have placed on record a certificate dated 22nd November 2007 showing total imports from Kores Austria for the sale of the Radex Branch in India of Rs. 23.46 lakhs for 20062007. The sales of Radex Brand carbon papers/stencil papers manufactured and sold under a licence from Kores Austria are Rs. 24.15 lakhs for 20062007 and Rs. 6.71 lakhs upto 30th October 2007 for the current year. The amount spent in publicity is stated to be Rs. 1.22 lakhs for 20062007 and Rs. 2.87 lakhs for Rs. 20072008.
The material placed before the Court would indicate that the presence of the Defendants in India does not date back to a period prior to 2006. The figures that have been disclosed pertain only to the sale of the Radex Brand. As already noted above, the Plaintiff has not objected by the use of the mark RADEX by the Defendant in India. In the affidavit in reply filed in these proceedings, the First Defendant has candidly stated before the Court that as the Indian economy had not opened up until recently the Defendants were not vigilant over what they term as an unscrupulous misappropriation of their mark by a dishonest or unauthorised adoption or use.
16. The facts before the Court at this stage would indicate that the Defendants have been unable to establish a transborder reputation in India or for that matter a continuous or concurrent user within the territory of India. On the contrary, it would appear that the Plaintiff who is the registered proprietor of the trade mark KORES and the associated device has an established goodwill and reputation associated with its business in stationery products, more particularly duplicating stencils.
17. The Defendants have submitted that they are in the process of taking steps for the rectification of the register. Now, it is well settled that the validity of the registration of a mark cannot be considered in a motion for interim relief taken out by a registered proprietor. So long as the mark continues to be on the register, the registered proprietor is entitled to the benefit of every statutory protection that is available to the proprietor of a registered mark. The Judgment of the Vimadalal, J. in Hindustan Embroidery Mills Pvt. Ltd. v. K. Ravindra & Co. (Vol.76) Bombay Law Reporter 146 is authority for the proposition that it is not the practice to consider the validity of the registration of a mark on a motion for interlocutory injunction and that, whilst, a mark remains on the register (even wrongly), it is not desirable that others should imitate it. This principle has been followed in the judgment of Mr. Justice B.N. Srikrishna (as the learned Judge then was) in Poddar Tyres Ltd. v. Bedrock Sales Corporation Ltd. : AIR1993Bom237 and in the Judgment of Hon'ble Mr. Justice A.P. Shah (as the learned Judge then was) in Biochem Pharmaceutical Industries v. Biochem Synergy Limited 1998 PTC (18) 267.
18. In IndoPharma Pharmaceutical Works Private Limited v. Pharmaceutical Company of India 80 Bombay Law Reporter 73, a learned Single Judge of this Court considered the requirement of a continuous user from a date prior to the registration of the other mark in Section 33 of the Trade and Merchandise Marks Act, 1958. This judgment is authority for the proposition that the requirement of a continuous prior user must be established on the basis of clear and cogent evidence. The evidence led by a party seeking to establish a continuous prior user will be required to be considered in the background of the nature of the product, the type of sales, the territory within which it is sold and the scale of manufacture of the party. In the present case, primafacie at this stage, there is no material to indicate a continuous prior user of the mark by the Defendant within the territory of India prior to the registration of the mark by the Plaintiff. That being the position, the action by the Plaintiff for infringement can validly be founded on the rights of the Plaintiff as a registered proprietor under Sections 28 and 29 of the Trade Marks Act, 1999. The Plaintiff has made out a primafacie case for the grant of an interlocutory injunction both on the basis of infringement and passing off. Considering the fact that the business of the Defendant within the territory of India has only recently commenced and having regard to the scale and character of the business, the balance of conveyance requires an order of interlocutory injunction to be passed in the interest of justice.
19. The Motion will accordingly have to be made absolute in terms of prayer Clauses (a), (b), (c) and (d). In so far as prayer Clause (e) is concerned, the Court Receiver shall stand appointed as Receiver to take charge of the inventory of finished products manufactured and or stored or sold by the Defendants bearing the name and mark KORES or KORES AUSTRIA and of the device of a lady engaged in typing and or any other mark identical with or similar to the Plaintiff's trade mark KORES. The Receiver shall, in the first instance carry out an inventory of the products of which possession has been taken. The Defendant would be at liberty to apply to the Receiver for the return of the products subject to the erasure of the mark KORES and of the device of the lady engaged in typing.
20. The Motion is accordingly disposed of.
21. On the request of Counsel appearing on behalf of the Defendants, the operation of the order shall remain stayed until 11th January 2008, subject to the Defendants filing an undertaking in this Court within a period of one week from today that no further imports shall take place in the meantime bearing the mark and device which form the subject matter of the suit.