J.K. Biswas, J.
1. This is an interlocutory application by the plaintiff in its passing off action. The prayers in this application are as follows:
'a) Interim order of injunction restraining the respondents, their agents, assigns employees, servants, dealers, retailers and all persons acting on their behalf or under them from passing off their goods and/or service and/or business by marketing, selling, advertising, or otherwise dealing in goods/services under the trade mark/name 'CAPITAL ONE', or otherwise using the expression CAPITAL ONE, whether in isolation or in conjunction with any other word/expression, in respect of any goods or services or as corporate name or domain name or in any other manner whatsoever;
b) Ad interim order in terms of prayer (a) above;
c) Receiver;
d) costs;
e) Any other order or orders as this Hon'ble Court deems fit and proper in the facts and circumstances of the present case be passed in favour of the petitioner and against the respondents.'
2. The plaintiff is a corporation organized and existing under the law of the State of Delaware in the United States of America. It was promoted in 1994 with the expression 'CAPITAL ONE' as the key and principal part, of its incorporate name. In November 1998 through its subsidiary Capital One Services Inc. it set up its liaison office at Mumbai in India. Defendant 1 was incorporated in 1999. It was incorporated with the expression 'CAPITAL ONE' as the key and principal part of its corporate name. In December 2002 the plaintiff received permission from the Reserve Bank of India for moving its office from Mumbai to Bangalore. It is now running its activities in India from 139/1 Hosur Main Road, Aditya Complex. Koramangala, Bangalore-560095. It applied for registration of the trade mark 'CAPITAL ONE' in classes 9 and 16; the application filed at the Calcutta office of the Trade Mark Registry is pending. It caused a notice dated January 17th, 2003 issued to the defendants through its advocate. The defendants were asked to discontinue use of the mark/ name 'CAPITAL ONE' and to execute the undertaking, draft whereof was enclosed. The defendants, however, by their reply dated January 31st 2003 declined to comply with such requisition, and they alleged that, the plaintiff was indulging in acts of deceit. Hence the suit is filed by the plaintiff.
3. Mr. Sarkar appears for the plaintiff. He submits that though all international registrations of the plaintiff relate to service marks, this passing off action can be maintained by it, since in India its applications are regarding goods. The single expression 'CAPITAL ONE' can be used interchangeably as a corporate name and trade mark of service mark. The definition of the word 'mark' in section 2(1)(j) of the Trade and Merchandise Marks Act, 1958 includes name. So corporate name can be registered, and passing off action can be brought to stop use of same or deceptively similar corporate name. In Aktiebolaget Volvo v. Volvo Steel Ltd., 1998 PTC (18) 47 (Bom) (DB) the legal position was discussed. Under the law of passing off, imitation and use of a corporate name can be prevented, as was held in Simatul Chemical Industries Pvt. Ltd. Nandeshari v. Cibatul Ltd., a Company, Atul : AIR1978Guj216 (DB). A concern not dealing in goods, but providing service only, is also entitled to protect its corporate name by a passing off action. The view on the issue expressed in Passing Off Law and Practice, by John Drysdale & Michael Silverleaf (2nd ed., p. 27, para 3.04) is authoritative for this purpose. The view finds support also from the decision in Legal and General Assurance Society Ltd. v. Daniel and Ors., (1968)9 RPC 253.
4. Mr. Bachawat appears for the defendants. He submits that the corporate name or service mark of the plaintiff is not in relation to any goods, but with respect to services rendered to financial institutions, and hence there is no foundation to seek the relief of injunction. The decision in Western Hospitality Services Ltd. Madras v. Caesar Park Hotels & Resorts Inc., Washington, USA, 1998 IPLR 189 (Mad) was given after considering the legal position regarding service mark and a passing off action for its protection.
5. I find that there is no dispute that all the international registrations of the plaintiff relate to service mark. There is also no dispute that the expression 'CAPITAL ONE' is the chief part of the corporate name of the plaintiff. In India the plaintiff has applied for registration of the trade mark 'CAPITAL ONE' is the chief part of the corporate name of the plaintiff. In India the plaintiff has applied for registration of trade mark 'CAPITAL ONE' in classes 9 and 16. Such applications are pending. With effect from September 15th, 2003 the Trade Marks Act, 1999 has come into force and the Trade and Merchandise Marks Act, 1958 stood repealed. In terms of section 159(3) of the Trade Marks Act, 1999 the applications filed by the plaintiff for registration of it is trade marks shall be governed by this Act. There is no dispute that under the new Act a trade mark in relation to services can also be registered. Under the trade and Merchandise Marks Act, 1958 a trade or corporate name was registrable.
6. The legal position regarding right of a concern providing services to bring and maintain a passing off action, as stated in Passing Off Law and Practice by John Drysdale & Michael Silverleaf (2nd ed. P. 27, para 3.04) reads as follows:
'3.04: Plaintiffs have been held entitled to bring proceedings for passing off based upon businesses consisting of, inter alia, associations of accountants, associations of medical practitioners, an ex-servicemen's association, night club, a concert hall, beauty competitions, bands of girl pipers, films, a television series, theatrical sketches, an operetta, plays, books, magazines, newspapers, hotels, restaurants, gramophone records and an organization for looking after children as well as commercial activities of all kinds whether concerned with providing goods or services. It has, however, been left expressly undecided whether an unincorporated association founded and conducted for charitable purposes could bring a passing off action.'
7. In Legal and General Assurance Society's case the plaintiff, a well known insurance company initiated a passing off action and sought injunction to restrain the defendants in the action from carrying on business of private investigators under the name Legal and General Enquiry Bureau. The Court granted injunction after holding that the defendants started using the words 'Legal and General' with a view to leading the people to believe that their business was in some way connected with the plaintiff (i.e. Legal and General Assurance Society Ltd.). It was held in this case that the defendants chose the words calculatedly to lead to confusion.
8. In Western Hospitality Service's case it was not held that a passing off action cannot be maintained by a concern that does not deal in goods, and only renders services in course of its business. In it, Western Hospitality Services Limited as plaintiff filed the suit under section 120 of the Trade and Merchandise Marks Act, 1958; it sought injunction to restrain Caesar Park Hotels & Resorts Incorporated (the defendant in the suit) from threatening it regarding use of the service mark 'Westinn' by it. The plea was dismissed on the ground that the statutory provision under which the suit was filed was holly inapplicable to service marks, and that the Trade and Merchandise Marks Act, 1958 in no manner regulated a service mark. Hence this decision is of no help to the defendants in this case.
9. After considering the legal position, as appears from the authority and the decisions cited at the bar, I am of the opinion that a concern that does not deal in goods and renders services only can bring and maintain an action to prevent the defendant in such action from passing off its business by adopting a trade or business or corporate name which is similar or deceptively similar to the one of the plaintiff.
10. I am therefore of the view that the instant passing off action brought by the plaintiff, that does not deal in goods and only renders services to financial institutions and other clients and consumers, is maintainable. It can maintain this action to prevent the defendants from passing off their business by adopting a similar or deceptively similar corporate name to create an impression in the mind of the consumers that they are in some way associated or connected with the plaintiff.
11. Mr. Sarkar submits that the corporate name and service mark of the plaintiff enjoy a well established international reputation and goodwill. Such reputation and goodwill reached Indian market even before the plaintiff opened its office in India through one of its subsidiaries. Existence of goodwill and reputation of a mark or name in Indian market can be established even without producing any evidence of advertisement in India. However, fact remains that business activities of the plaintiff in India were reported by leading economic dailies of the country. It is not disputed that business activities of the plaintiff get remarkable coverage in well-known international journals.
12. Mr. Bachawat submits that the plaintiff has made an unfounded claim that its trade name or service mark has gained trans-border reputation. The legal position regarding trans-border reputation has been explained by the Supreme Court in N.R. Dongre v. Whirlpool Corporation, 1996 PTC(16) 583 SC; in terms of this decision the plaintiff was under and obligation to produce some materials to show that its trade name is in use or circulation in India.
13. Regarding international goodwill and reputation associated with the corporate name of the plaintiff, its case, as appears from the records, is this: The plaintiff was promoted in the year 1994. The expression 'CAPITAL ONE' is the key and principal part of its corporate name. Its principal subsidiaries are Capital One Bank and Capital one F.S.B. The other subsidiaries and associates are: - Capital One Service Inc.; Capital One Auto Finance; Capital One services (Canada), Inc.; Capital One Marketing Securities Limited; Capital One Finance Company. The plaintiff and its subsidiaries are engaged in offering consumers services related to credit cards, personal loans, automobiles loans, mortgage service, installment loans, etc. Global investment of the plaintiff in marketing is around US$ 210.8 million. Subsidiaries of the plaintiff collectively maintain around 46.4 million managed accounts and US$ 56 billion in managed loans. The plaintiff and its associates and subsidiaries together form the largest provider of Master and Visa Credit Cards in the world. It trades on the New York Stock Exchange. It has trading activities in United Kingdom, Canada, France, Spain and South Africa. In November 1998 it opened its liaison office in India through its subsidiary Capital One Services Inc.; at present it operates from Bangalore. Negotiation started by the plaintiff to establish business relationship with the Life Insurance Corporation of India was widely reported in Indian newspapers. The Business Standard and the Economic Times in their May 15th, 2003 issue reported such news. Activities of the plaintiff were widely reported in International magazines and journals like Business Week, Time Magazine, Fortune, Investors Relations, etc.; and economic dallies such as The Financial Times. All these magazines, journals and newspapers have wide circulation in India. Success story of the plaintiff was analyzed in the academic journals like the magazine of Harvard Business School. In several countries the plaintiff spent to the tune of millions towards advertisement and promotional expenses. In Indian market also the activities of the plaintiff were widely reported in both print and electronic media. In 1997 the well known journal Computer World declared the plaintiff as the best place to work in financial services. Up to the year 2002, for a continuous period of three years the plaintiff was listed as the Fortune 500 largest American corporation. For the fourth consecutive year, in 2002 the plaintiff found place in Business Week's list of top 50 performers in the S & P 500. Its worldwide turnover in the year 1999 was US$ 5,503,895,297; and in 2002 it was USS 14,373,795,604. Registration of its trade mark/service mark covers the United States of America, the United Kingdom, Japan, Hong Kong, Indonesia, Newzeland, Singapore, South Africa, Canada, and may other countries. On April 17th, 1998 it applied under the Trade and Merchandise Marks Act, 1958 for registration of the trade mark 'CAPITAL ONE' in relation to computer hardware and software relating to financial and insurance services, all being goods included in class 9. On May 12th, 1998 and July 1st, 1998 it again applied for registration of the trade mark 'CAPITAL ONE' in relation to publications relating to financial and insurance services, all being goods included in class 16. Such applications are pending before the competent authority.
14. I find that the fact that the corporate name of the plaintiff has a worldwide presence is not disputed. The journals, magazines and other similar things as noted above, admittedly, have presence and circulation also in India. It is also the admitted position that after its birth in 1994 the plaintiff spread its business beyond the geographical boundaries of the country of its origin. All its subsidiaries and associates use the expression 'CAPITAL ONE' as the key and principal part of their corporate names. Total business turnover of the plaintiff and its subsidiaries and associates indicates the existence of reputation and goodwill; at least there is nothing to hold against it. Such reputation and goodwill is associated with the corporate names in which the expression 'CAPITAL ONE' is the key and principal feature.
15. Ordinarily a concern reaps benefits of its reputation and goodwill for more business and more profit. To achieve this end such concern takes positive steps to publicize its reputation and goodwill. Simultaneously, various different forms of information media on their own (in course of their own business) play a very important role regarding publicity of reputation and goodwill of a concern. Information regarding a concern published by journals magazines, newspapers, etc. act as double edged swords; they may either ruin the reputation and goodwill which the concern claims through its positive acts, or may spread it in much greater scale.
16. In this case there is nothing dto show that the reputation and goodwill that the plaintiff claims was ever adversely commented by the above journals, magazines, newspapers which, admittedly, have circulation in India. It entered the Indian market in November 1998 through its subsidiary. It does not appeal to reason to think that its entry was only for occupying an office or that such entry was not noticed by any one, or that the entry was bereft of the international reputation and goodwill associated with its corporate name. In my view, its very presence in the market was enough to spread its international reputation and goodwill among the people who matter. Corporate name of the plaintiff need not be a household name in India. What is needed is whether the people who may require services of the plaintiff have knowledge of the reputation and goodwill associated with its corporate name. On facts, I am satisfied that the international reputation and goodwill associated with the corporate name of the plaintiff reached India through the above noted ways and means coupled with the actual physical presence of its subsidiary in India.
17. Mr. Sarkar then submits that for maintaining a passing off action the plaintiff is required to establish only the fact of existence of reputation and goodwill of its mark or name in Indian market, and not the fact of its use in India. The proposition is supported by the decisions in N.R. Dongre & Ors. v. Whirlpool Corporation & Ors., AIR 1995 Del 300 (DB); Calvin Klein Inc. v. International Apparel Syndicate, 1996 PTC (16) 293 (Cal); Allergan Inc. v. Milment Oftho Industries and Ors. (DB); and Aktiebolaget Volvo v. Volvo Steels Ltd., 1998 PTC (18) 47 Bom (DB). The plaintiff is also not prevented from instituting the present proceeding on the ground that in India it carries on activities through one of its subsidiaries, because the injury Is ultimately being suffered by the plaintiff to its international reputation.
18. Mr. Bachawat submits that the plaintiff has, admittedly, no business in India, and hence it is not entitled to get any injunction. Such contention is supported by the decisions in The Gillette Company and Ors. v. A. K. Stationery and Ors. 2001 PTC 513 (Del) and Pioneer Bakeries (P) Ltd. v. Kraft Jacobs Suchard Ltd., 1998 PTC (18) 502. The plaintiff has no right to file the suit, as it itself does not carry on any business activities in India. The decisions relied on in support of case of the plaintiff are misplaced. In Allergen's case because of a joint venture there was a business activity of the company in India; this is absent in the present ease. In Calvin Klein's case there was advertisement published in India regarding the goods; the plaintiff never advertised its business or goods in India. In Volvo's case cars bearing the trade mark 'Volvo' were present in Indian market; in this case the plaintiff is not carrying on any business in India.
19. The question is whether for maintaining a passing off action the plaintiff is required to carry on business in India, and if so, whether it itself is required to carry on such business. From the materials on record I, however, do not find anything which can show that the plaintiff is carrying on any business in India or that the dominant parts of its corporate name is in use in India in connection with any business. But then as held in Calvin Klein's case, for maintaining a passing off action it is immaterial whether the plaintiff actually caries on business at particular place; what is relevant is whether the eases of the defendant are calculated to deceive the consumers to take products of the defendant believing them to be of the plaintiff. In my view the same principle will apply to the present case. Similar views were taken in Aktiebolaget Volvo's case and Allergen's case.
20. The decision in Gillette's case is contrary to the law explained by the Division Bench of this Court in Allergan's case, which, however, was considered in that case only in the context of trans-border reputation. In Allergan's case it was clearly held that a plaintiff with an internationally established reputation can sue to protect it in this country even if it does not have any business activity here. This proposition laid down in Allergan's case was not noticed in Gillett's case. In Pioneer Bakery's case the Assistant Registrar of the Trade Marks Registry, Chennai gave the decision regarding necessity of business activity in the country without noticing the decision in Allergan's case.
21. I am of the view that for maintaining this passing off action the plaintiff is not required to establish the fact that it has been carrying on business activities in India, or that its corporate name is in use or circulation in India. The plaintiff can maintain this action once it is successful in establishing that its international reputation and goodwill associated with its corporate name has reached India and the people concerned have knowledge of such existing worldwide reputation and goodwill. I find merit in the submission that the injury is being suffered by the plaintiff. So I am also of the view that the plaintiff is entitled to bring and maintain this action, through in India it carries on its activities through its subsidiary.
22. Mr. Sarkar submits that admittedly the defendants have used the expression 'CAPITAL ONE' as the key and principal feature of their corporate name. The explanation given in the opposition for adopting such a corporate name proves the ill motives of the defendants. They adopted the same expression in the same manner that they might pass off their business as associate of the plaintiff. As proof of actual instance of deception is not required, and only a likelihood of deception can be the basis for sustaining a passing off action, in this case the plaintiff is entitled to maintain the action. The legal position regarding this will appear from the decision in Rustan & Hornby Ltd. v. Zamindara Engineering Co., : [1970]2SCR222 .
23. Mr. Bachawat submits that the plaintiff has failed to make out any case of passing off. In India the defendants are the prior users of the expression 'CAPITAL ONE'. They have established reputation associated with the corporate name of defendant 1. Explanations given in the opposition for choosing the expression are enough to refuse the claim of the plaintiff. There is no actual proof of deception. Hence no case of passing off has been made out.
24. The question that arises now is whether the plaintiff has established the ease of passing off by the defendants. Case of the defendants is this. Defendant I was incorporated under the Companies Act, 1956 on October 26th, 1999. It was incorporated under the corporate name Capital One Pvt. Ltd. It provides financial service research and management consultancy. It was registered with the Registrar of Companies, Gujarat, Dadra & Nagar Haveli. From the year 1999 it has been handling corporate finance mandates in course of its business. The expression 'CAPITAL ONE' is the key and principal feature of its corporate name. Only from the notice dated January 17th, 2003 issued by the plaintiff, they came to learn for the first time about the corporate name of the plaintiff. In their reply letter dated January 31st, 2003 they stated that the plaintiff should desist itself from using the expression 'CAPITAL ONE' for passing off its services as service of the defendants. They adopted the expression 'CAPITAL ONE' bona fide. The word 'CAPITAL' is a generic word in financial business, and the word 'ONE' was used by them to indicate the best. The expression 'CAPITAL ONE' in India is invariably associated with their business. Renowned financial companies have established business relationship with them not on the belief or impression that they are connected or associated with the plaintiff, but for their own reputation and goodwill.
25. In my considered view the explanations given by the defendants for employing the expression 'CAPITAL ONE' as the key and principal part of the corporate name of defendant I do not inspire confidence in their bona fides. Admittedly, the plaintiff has been using the expression 'CAPITAL ONE' as dominant part of its corporate name and the plaintiff has been so using it from the year 1994. In November 1998 the plaintiff opened its office in India. On facts, there is little scope to dispute the fact that the relevant business circle in India knew about the worldwide reputation and goodwill of the plaintiff in the relevant business filed. It is only in November 1999 that the defendants registered their company with a paid up share capital of Rs. 4,000/-. They employed in its corporate name the expression 'CAPITAL ONE' as the dominant part. The expression has been used by the defendants in the same manner in which the plaintiff uses the expression. The expression is similar phonetically, aurally, visually and structurally.
26. I find no reasons to believe that at the time of taking the decision to employ the expression 'CAPITAL ONE' in corporate name of defendant 1, the defendants had no knowledge about its prior use by the plaintiff as dominant part of its corporate name. On the facts, such a plea, perhaps, will not sound credible even to a credulous person. The plaintiff has been carrying on business all over the world and its presence was known to the people involved in the business concerned. A crescendo of reputation and goodwill of a concern not only attracts more and more consumers; breeds allurement also. It lures some people on to enter into same, similar or other business with the desire to reap rich harvest quickly by using it through deceptive means. On the facts of this case, I have no hesitation to hold that the defendants employed the expression 'CAPITAL ONE' as the dominant part of the corporate name of defendant 1 in a calculated manner, and the defendants so did with a view to attracting business by creating an impression about their connection and association with the plaintiff that enjoys a worldwide goodwill and reputation. Acts of the defendants clearly indicate their intention to pass off their business as associates of the plaintiff. Consumers of financial services are likely to believe that defendant 1 has been sponsored by or have connection with the plaintiff that has global presence in the field of financial services. Explanations given by the defendants that the word 'CAPITAL' is generic and hence the plaintiff can have no objection if they choose the word for employing it as the dominant part of the corporate name of defendant 1, is not acceptable at all on the facts of the ease. The defendants have employed the expression 'CAPITAL ONE' in the same manner in which the plaintiff has been using the expression. It is true that the plaintiff has not produced any proof of actual deception. But as held in Rustan & Hornby's case actual proof of deception is not required for maintaining an allegation of passing off; the likelihood of deception is sufficient. In this case the corporate name of defendant 1 is bound to deceive the people concerned into believing that it is associated or connected with this plaintiff. Hence, I find that the plaintiff has established the allegation regarding passing off.
27. Mr. Sarkar submits that the plaintiff is not required to seek remedy under section 22 of the Companies Act. 1956 for misappropriation of its corporate name by the defendants. Section 9 of the Code of Civil Procedure, 1908 is the primary remedy in a passing off action; it has been recognized by section 106 of the Trade and Merchandise Marks Act, 1958. Reference for this purpose can be made to the decision in Montari Overseas Ltd. v. Montari Industries Ltd., 1996 PTC (16) 142 Delhi (DB).
28. Mr. Bachawat submits that the remedy of the plaintiff, if any, is under section 22 of the Companies Act, 1956, and not in a passing off action.
29. The position of law is that once a case of passing off is established, relief has to be granted by way of injunction. That the aggrieved persons may also approach the competent authority, is no bar to the granting of appropriate relief by the Civil Court in a passing off action which is maintainable in law. I find no merit in the contention that the remedy of the plaintiff, if any. is sonly under section 22 of the Companies Act, 1956. Section 22 does not impede the plaintiffs initiating this passing off action. The decision in Montari Overseas's case fully supports this view.
30. Mr. Sarkar finally submits that there has been no delay in initiation of the action, as the period subsequent to notice is only relevant for considering the objection of delay. The plaintiff has made out a very strong prima facie case, and it is likely to suffer greater hardship if the relief of temporary injunction is not granted. If defendant 1 is directed to change its corporate name, it would not suffer any great loss or prejudice.
31. Mr. Bachawat submits that the plaintiff has totally failed to make out any prima facie case for getting injunction. There is inordinate delay in approaching the Court by the plaintiff. In any event, as held in Uniply Industries Ltd. v. Uncorn Plywood Pvt. Ltd. and Ors., : [2001]3SCR307 , in such a case, status quo should be maintained during pendency of the action.
32. Delay is definitely a consideration in a passing off action. But on the ground of delay alone relief is not to be denied in a ease where the allegation of a passing off stands established. What require consideration is the competing interests of the parties and the balance of convenience and inconvenience. If it is found that allegation of passing off is established, denial of relief would amount to encouraging deceitful action of the defendant. I have already found that the steps taken by the defendants are calculated to pass off their business as associates of the plaintiff. So denial of injunction to the plaintiff would amount to permitting the wrong doer to continue with the wrong. I, however, do not think that the plaintiff is guilty of any noticeable delay in approaching the Court. The fact that from October 1999 the defendants have been carrying on business under the present corporate name should weigh in their favour only for granting them a reasonable period to take necessary steps towards compliance with the terms of injunction they are bound to suffer.
33. For the above reasons I allow this application. There will be an order in terms of prayer (a) of this application. This order shall continue till the disposal of the suit. However, the injunction in terms of this order shall come into force only after expiry of three months from date.
Costs of this application shall be costs in the cause.
Urgent xerox certified copy of this order, if applied for, may be supplied to the parties.