Case Name : Cadila Pharmaceuticals Limited.

Vs Sami Khatib Of Mumbai (Bombay High Court)

Appeal Number : Appeal No. 1158 of 2010

Date of Judgement/Order : 13/04/2011

Related Assessment Year :

Courts : All High Courts Bombay High Court

Cadila Pharmaceuticals Limited. Vs Sami Khatib Of Mumbai (Medley Pharmaceuticals Limited)

A division bench of the Bombay high court last week dismissed the appeal of Cadila Pharmaceuticals
against the judgement of a single judge bench restraining Cadila from manufacturing, marketing or
exporting medicinal preparations under the trade mark “Hb TONE”/ “HB TONE” or any other mark
deceptively similar to the trademarks of another company, Medley Pharmaceuticals, namely
“ARBITONE”, “RB TONE” or “HB RON”. The complaint was that Cadila was “passing off” the products
with similar names.

___________________________________

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

APPEAL NO. 1158 OF 2010

IN NOTICE OF MOTION NO. 599 OF 2006

IN SUIT NO. 568 OF 2006

Cadila Pharmaceuticals Limited, a company]

incorporated under the Indian Companies ]

Act, 1956, having its address at 1389, ]

Dholka, Ahmedabad and also an office at ]

5th Floor, A-Wing, Oxford Chambers, Opp. ]

Saki Vihar Telephone Exchange, Near L&T,]

Saki Naka, Andhri (East), Mumbai-400072 ] …Appellants/Ori.Defts.

Versus

1. Sami Khatib of Mumbai, Indian ] inhabitant, carrying on business in the ] name and style of M/s.
Medley ] Laboratories, having its office at Medley ] House, D-2, MIDC Area, 16th Road, ] Andheri
(East), Mumbai 400093. ]

2. Medley Pharmaceuticals Limited, a ] company incorporated under the ] Companies Act, 1956,
having its office ] at Medley House, D-2, MIDC Area, ] 16th Road, Andheri (East), Mumbai-72. ] …
Respondents/Ori.Plffs.

Mr.Janak Dwarkadas, Senior Counsel with Mr. Vinod Bhagat, Mr. Punit Jani, Mr.Dhiren Karma and
Mr.Suryakant Rao i/b M/s.G.S. Hegde & V.A. Bhagat for the Appellant.

Dr.Virendra Tulzapurkar, Senior Counsel with Mr.S.U. Kamdar, Senior Counsel with Mr.Ashish Kamat
and Mr.Vikhil Dhoka i/b M/s.Bharat Shah & Co. for the Respondent.

CORAM : MOHIT S. SHAH, C.J. &

S.J. VAZIFDAR, J.

Date of Reserving: 12TH JANUARY, 2011

Date of Pronouncement : FRIDAY, 08TH APRIL 2011.

ORAL JUDGMENT. :- [Per S.J. Vazifdar, J.]

1. This is the defendants’ appeal against the order and judgment of the learned single Judge
restraining it from manufacturing, marketing, selling and/or exporting medicinal or pharmaceutical
preparations or any other goods under the impugned trade mark “Hb TONE”/ “HB TONE” or any
other mark identical with and/or deceptively similar to the plaintiffs’ trademarks “ARBITONE”, “RB
TONE” and/or “HB RON”, so as to pass off or enable others to pass off its pharmaceutical
preparations as and for those of the plaintiffs/ respondents.

2. The respondents had filed the suit for infringement and passing off contending that the
appellants’ marks were deceptively similar to theirs. On 28.2.2007 i.e. after the suit was filed, the
appellant secured registration of the impugned mark. At this stage, therefore, the action is limited to
passing off.

The respondents’ marks are registered in class V in respect of pharmaceutical preparations.

Respondent No.1 by a Licensed User Agreement dated 31.3.1997 granted a licence to respondent
No.2 Medlex Pharmaceuticals Limited to use the said marks. Respondent No.2 is, therefore, the
licenced user of the said marks. By a Deed of Assignment dated 26th March, 2002, respondent No.1
assigned the 3 App1158.10

right, title and interest in and to the trademark “HB RON” to respondent No.2. Respondent No.2 is
thus the proprietor of the registered trademark “HB RON”.

For the purpose of this appeal, it is sufficient to compare the appellant’s mark to the respondent’s
mark “RB TONE”.

3. The appeal raises the following questions:-

I) Whether the respondents have established their reputation and goodwill in respect of their mark
“RB TONE”.?

II) Whether the appellant’s mark “HB TONE / “Hb TONE” is deceptively similar to the respondent’s
mark “RB TONE”? III) Whether the respondents are dis entitled to interim reliefs on the ground of
delay and latches?

IV) Whether the respondents have made a false statement dis entitling them to interlocutory reliefs?
V) Whether the respondent’s case is not based on a word mark, but only on a label mark?

VI) Whether the respondents are not entitled to interlocutory reliefs on the ground that the latter
part of the marks “TONE” is in common usage for similar products in a series of marks? VII) Whether
in view of section 56 of the Trade Marks Act, 1999, the action for infringement or passing off is
maintainable despite the appellant only exporting its goods and not selling them in India.? VIII)
Whether this Court has territorial jurisdiction to entertain the respondent’s suit?

We have answered all the questions in the respondent’s favour leading to a dismissal of the appeal.
The answer to the questions I to VI is straight forward and does not admit of any complication. The
only point which raises a question of law of importance is question VI as it involves an interpretation
of section 56 of the Trade Marks Act, 1999.

Re: I: Whether the respondents have established their reputation and goodwill in respect of their
mark “RB TONE”.?

4. The respondents have more than satisfactorily established their goodwill and reputation in the
trademark “RB TONE”. Indeed, we did not understand Mr. Dwarkadas as having seriously disputed
the same on facts. The appellant never sought inspection of or effectively disputed the sales
invoices, relied upon by the respondents, which were duly certified by the Chartered Accountants.
Suffice it to note that the products have been sold under the mark “RB TONE” in India since the year
1972. The sales under the said mark, which in the year 1972 were to the extent of Rs.4,67,000/-,
increased enormously over the years. For the past ten years the sales have been about Rs.20.00
crores per annum.

The respondents had exported the said preparations to various countries including Kenya, Uganda,
Tanzania, Zambia, Yemen, Sri Lanka, Vietnam, Cambodia and Myanmar. The export sales figures of
the products sold under the mark “R.B. TONE” have also been furnished. In the year 1999, the value
of the product exported was Rs.41,56,000/-. The same increased to Rs.82,65,000/- the following
year. In the year 2004-2005, the exports were of the value of Rs. 53,72,000/-.

5. The respondents averred that large sums of money had been spent and enormous efforts were
made in promoting, marketing and advertising their products by various means on a very large scale.

6. The respondents have thus established their goodwill and reputation in the mark adequate to
maintain an action for passing off.

Re: II: II) Whether the appellant’s mark “HB TONE / “Hb TONE” is deceptively similar to the
respondent’s mark “RB TONE”?
7. The next question is whether the appellants’ mark “HB TONE”/ “Hb TONE” is deceptively similar to
the respondents’ trade mark “R.B. TONE”.

8. Dr.Tulzapurkar’s submission that the appellants’ mark is deceptively similar to the respondents’
mark “R.B. TONE” is well founded. The only difference between the rival marks is that the letter “R”
in the respondents’ mark is substituted with the letter “H” in the appellant’s mark. This difference is
insignificant to a person of average intelligence and with imperfect recollection. It is not merely
possible but highly probable that the consumer would mistake one mark for the other for they are
visually and phonetically almost identical. Added to this is the fact that the nature of the products
are the same which enhances the likelihood of confusion. Further still is the fact that both are
pharmaceuticals/medicinal products calling upon the Court to scrutinize the matter more strictly and
with greater care and concern.

9. While considering the question of similarity between marks, judgments in other cases may not be
binding as regards the actual decision on facts. As noted by the Supreme Court in Amritdhara
Pharmacy v. Satya Deo Gupta, AIR 1963, SC, 449:-

“Therefore, every case must depend on its own particular facts and the value of authorities lies not
so much in the actual decision as in the tests applied for determining what is likely to deceive or
cause confusion.”

However, we find Dr.Tulzapurkar’s reliance upon two judgments to be of considerable importance

and assistance as the rival marks and controversy therein are in this regard almost identical to those
in the present case. The similarity of the rival marks in those cases and in this case are so striking as
to compel us to place substantial reliance upon them even in respect of the actual decision. This, of
course, is in addition to our own judgment, independent of authority, that the appellant’s mark is
deceptively similar to the respondent’s mark.

10. In Charak Pharmaceuticals v. M.J. Exports Pvt. Ltd. (D.B.), 1993, IPLR 39 = 1993 PTC 309 (D.B.), a
Division Bench of this Court considered the rival marks “MJTONE” and “M-2 TONE”. The degree of
similarity in the marks in that case was in fact less than the degree of similarity of the marks in the
present case especially on account of the second letter “J” being substituted with the numeral “2”,
and the hyphen, “-“, between the letter “M” and the numeral “2”. The Division Bench, after referring
to the well established tests for determining the question of similarity between marks, held as
under:-

“5. …………………………………………………………………….. Turning to the two marks, it is obvious that the

beginning and ending of the two marks is similar and indeed except for the letter `J’ in the mark of
respondent No.1, the two marks are identical. The only difference in the mark proposed by
respondent No.1 with that of the applicants is that instead of figure `2′ letter `J’ is substituted. On
the first impression, it is obvious that there is every likelihood of deception or confusion by the user
of the mark of respondent No.1. It is now well settled that the Court, while considering likelihood of
deception or confusion must make allowance for imperfect recollection and the effect of careless
pronunciation and speech of the part not only of the person seeking to buy under the trade
description, but also of the shop assistant ministering to that person’s wants. Shri Daruwalla
submitted that the difference between the two marks is noticeable because the mark of the
appellants uses the figure `2′, while respondent No.1, letter `J’. It is not permissible to make a
meticulous comparison of the words, letter by letter and syllable by syllable and the two marks must
be taken as a whole to ascertain whether there is a likelihood of deception or confusion. The
principle that the marks must be compared as a whole is well settled and it is incumbent upon the
Court to consider whether the totality of the proposed trade mark is such that it is likely to cause
deception or confusion or mistake in the mind of the person accustomed to the existing trade mark.”

11. Dr.Tulzapurkar’s reliance upon the judgment of a learned single Judge of the Hon’ble Delhi High
Court in Charak Pharma Pvt. Ltd. v. Prashi Pharma Pvt. Ltd., is also well founded. The rival marks
there were “M2 Tone” and “MV – Tone”. The learned Judge held as under:-

“9. The statement that was made by counsel appearing for the defendant, therefore, is clearly
contrary to what has been laid down by the Supreme Court in the aforesaid decision. therefore, if on
analysis it is found that the two competing marks are similar either phonetically or visually, in that
event temporary injunction should be granted immediately. As stated herein above, except for ”V”
replacing 2, the rest of the alphabets are the same and, therefore, both the competing marks are
phonetically as also visually similar.

10. When the facts of the present case are tested by the touchstone of the factors laid down in the
decision of Cadila Health Care Limited Vs. Cadila Pharmaceuticals Limited (Supra), it would also be,
prima facie, established that there is a degree of resembleness between the two competing marks.
The nature of the goods in respect of which they are used as trade mark is also similar and the class
of purchasers who are likely to buy the goods bearing the marks they require is also similar. The
mode of purchasing the goods is also similar and, therefore, when weightage is given in the light of
the aforesaid decision of the Supreme Court, I am of the considered opinion that both the
competing marks are deceptively and confusingly similar to each other and, therefore, I am of the
considered opinion that the plaintiff has been able to make out a strong case for the grant of
temporary injunction in his favor and that any delay in granting the same would prejudicially affect
the case of the plaintiff.”

The degree of similarity between the rival marks in this case too was less than the degree of
similarity between the rival marks in the present case on account of the second letter “V” being
substituted with the numeral “2”. Further, the judgment applies in fact with greater force in the
present case for the products manufactured by the parties herein are the same.
12. Mr. Dwarkadas’ relied upon the judgment of the Supreme Court in Kaviraj Pandit Durga Dutt
Sharma v. Navaratna Pharmaceutical Laboratories PTC (Suppl.) (2) 680 (SC) in support of his
contention that the added material in the appellant’s mark are sufficient to indicate a trade origin
different from that of the respondents and to distinguish the goods of the respective parties.

13. The similarity of the rival marks in the present case is so striking that the added material, in our
opinion, does not detract from the deceptive similarity of the two marks. It is not necessary for us,
therefore, to refer to the judgment of a Division Bench of this Court in Medley Laboratories (P) Ltd.
vs. Alkem Laboratories Limited, 2002 (25) PTC 593 (Bom.) (DB), relied upon by Dr. Tulzapurkar in this
regard.

14. The appellant pleaded that the mark “Hb TONE” was honestly and independently adopted by it
early in the year 2000 wherein the letters “Hb” are symbolic of and an abbreviation and the chemical
symbol of hemoglobin and the suffix “TONE” refers to increasing the tone/tonal quality of iron in the
blood by consuming the said medicine. Therefore, it is averred, that the appellant’s tonic which is
meant to increase/tone up hemoglobin levels was sold under the name Hb TONE.

15. We will assume that the appellant adopted the mark “Hb TONE” as alleged in the affidavit in
support. Firstly, even if it did so honestly and independently, it would make no difference to the
grant of an injunction for infringement or passing off once it is held that the mark is deceptively
similar to the respondent’s mark [See Sun Pharmaceutical Industries Ltd. v. Wyeth Holding
Corporation, 2005 (30) PTC 14 (Bom) (DB) paragraph 21.].

16. Secondly, it is difficult to accept that the average consumer would, when purchasing the product,
be aware of the fact that the letters “Hb” are symbolic of and an abbreviation and the chemical
symbol of hemoglobin and thereby distinguish the appellant’s products from those of the
respondents. Indeed, only a microscopic minority of consumers could be expected to even know the
chemical symbol “Hb” much less distinguish the products of the parties based on the chemical
symbol “Hb”.

17. It is settled law that the test while determining similarity is one of possibility and not probability
of confusion. Moreover, while comparing marks, the Court does not go into the etymological
meaning of the rival words/marks.

The Supreme Court, in Amritdhara Pharmacy vs. Satya Deo Gupta, (1963) 2 SCR 484 = AIR 1963 SC
449 , held as under:-

“7. Let us apply these tests to the facts of the case under our consideration. It is not disputed before
us that the two names “Amritdhara” and “Lakshman-dhara” are in use in respect of the same
description of goods, namely a medicinal preparation for the alleviation of various ailments. Such
medicinal preparation will be purchased mostly by people who instead of going to a doctor wish to
purchase a medicine for the quick allevi- ation of their suffering, both villagers and townsfolk,
literate as well as illiterate. As we said in Corn Products Refining Co. v. Skangrila Food Products Ltd.
the question has to be approached from the point of view of a man of average intelligence and
imperfect recollection. To such a man the overall structural and phonetic similarity-of the two names
“Amritdhara” and “Lakshmandhara” is, in our opinion, likely to deceive or cause confusion. We must
consider the overall similarity of the two composite words “Amritdhara” and “Lakshmandhara”. We
do not think that the learned Judges of the High Court were right in saying that no Indian would
mistake one for the other. An unwary purchaser of average intelligence and imperfect rec- collection
would not, as the High Court supposed, split the name into its component parts and consider the
etymological meaning thereof or even consider the meaning of the composite words as “current of
nectar” or “current of Lakshman”. He would go more by the overall structural and phonetic similarity
and the nature of the medicine he has previously purchased, or has been told about, or about which
has otherwise learnt and which he wants to purchase. Where the trade relates to goods largely sold
to illiterate or badly educated persons, it is no answer to say that a person educated in the Hindi
language would go by the etymological or ideological meaning and see the difference between
“current of nectar” and “current of Lakshman”. “Current of Lakshman” in a literal sense has no
meaning; to give it meaning one must further make the inference that the “current or stream” is as
pure and strong as Lakshman of the Ramayana. An ordinary Indian villager or townsman will perhaps
know Lakshman, the story of the Ramayana being familiar to him; but we doubt if he would
etymologise to the extent of seeing the so-called ideological difference between “Amritdhara” and
“Lakshmandhara”. He would go more by the similarity of the two names in the context of the widely
known medicinal preparation which he wants for his ailments.”

18. In Cadila Health Care Limited v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 73, the Supreme Court
indicated the approach to determine the question of confusing similarity in the case of trademarks
used in respect of medicinal products. It was held as under :-

“32. Public interest would support lesser degree of proof showing confusing similarity in the case of
trade mark in respect of medicinal products as against other non-medicinal products. Drugs are
poisons, not sweets. Confusion between medicinal products may, therefore, be life threatening, not
merely inconvenient. Noting the frailty of human nature and the pressures placed by society on
doctors, there should be as many clear indicators as possible to distinguish two medicinal products
from each other. It is not uncommon that in hospitals, drugs can be requested verbally and/or under
critical/pressure situations. Many patients may be elderly, infirm or illiterate. They may not be in a
position to differentiate between the medicine prescribed and bought which is ultimately handed
over to them. This view finds support from McCarthy on Trade Marks, 3rd Edn., para 23.12 of which
reads as under:

“The tests of confusing similarity are modified when the goods involved are medicinal products.
Confusion of source or product between medicinal products may produce physically harmful results
to purchasers and greater protection is required than in the ordinary case. If the goods involved are
medicinal products each with different effects and designed for even subtly different uses, confusion
among the prod- ucts caused by similar marks could have disas- trous effects. For these reasons, it is
proper to re- quire a lesser quantum of proof of confusing sim- ilarity for drugs and medicinal
preparations. The same standard has been applied to medical prod- ucts such as surgical sutures and
clavicle splints.”

33. The decisions of English courts would be relevant in a country where literacy is high and the
marks used are in the language which the purchaser can understand. While English cases may be
relevant in understanding the essential features of trade mark law but when we are dealing with the
sale of consumer items in India, you have to see and bear in mind the difference in situation
between England and India. Can English principles apply in their entirety in India with no regard to
Indian conditions? We think not. In a country like India where there is no single common language, a
large percentage of population is illiterate and a small fraction of people know English, then to apply
the principles of English law regarding dissimilarity of the marks or the customer knowing about the
distinguishing characteristics of the plaintiff’s goods seems to overlook the ground realities in India.
While examining such cases in India, what has to be kept in mind is the purchaser of such goods in
India who may have absolutely no knowledge of English language or of the language in which the
trade mark is written and to whom different words with slight difference in spellings may sound
phonetically the same.

While dealing with cases relating to passing off, one of the important tests which has to be applied in
each case is whether the misrepresentation made by the defendant is of such a nature as is likely to
cause an ordinary consumer to confuse one product for another due to similarity of marks and other
surrounding factors. What is likely to cause confusion would vary from case to case. However, the
appellants are right in contending that where medicinal products are involved, the test to be applied
for adjudging the violation of trade mark law may not be on a par with cases involving non-medicinal
products. A stricter approach should be adopted while applying the test to judge the possibility of
confusion of one medicinal product for another by the consumer. While confusion in the case of
non-medicinal products may only cause economic loss to the plaintiff, confusion between the two
medicinal products may have disastrous effects on health and in some cases life itself. Stringent
measures should be adopted specially where medicines are the medicines of last resort as any
confusion in such medicines may be fatal or could have disastrous effects. The confusion as to the
identity of the product itself could have dire effects on the public health.”

19. The appellant’s mark is, therefore, deceptively similar to the respondent’s trademark “RB TONE”.
The minor difference between the two would not enable a person of average intelligence with
imperfect recollection to distinguish between the two. There is no justification to interfere with the
learned Judge’s decision in this regard. In this view of the matter, it is not even necessary for us to
consider whether the impugned mark is deceptively similar to the respondent’s mark “ARBITONE”.

Re: III: Whether the respondents are dis entitled to interim reliefs on the ground of delay and
latches?
20. Mr. Dwarkadas submitted that the suit and the application for interlocutory reliefs suffers from
gross delay and latches.

21. There is a valid explanation to the delay, if any, in filing the suit. Moreover, the nature of the
delay, if any, does not indicate acquiescence on the respondent’s part in the appellant’s use of the
impugned mark or the waiver of their rights in respect of their marks.

22. Before referring to the facts in this regard, it is necessary to note the legal principles to be
considered with respect to a defence based on delay and latches. The point is covered against the
appellant by several judgments, including of this Court, binding on us.

23(A) A learned single Judge of the Delhi High Court considered the question of delay and latches in
M/s. Hindustan Pencils Private Limited vs. M/s. India Stationery Products Co. AIR 1990, Delhi, 19. The
judgment has been followed in several judgments, including judgments of Division Benches of this
Court. Paragraphs 31 and 32 of the judgment read as under:-

“31. Even though there maybe some doubt as to whether laches or acquiescence can deny the relief
of a permanent injunction, judicial opinion has been consistent in holding that if the defendant acts
fraudulently with the knowledge that he is violating the 16 App1158.10

plaintiffs rights then in that case, even if there is an inordinate delay on the part of the plaintiff in
taking action against the defendant, the relief of injunction is not denied. The defence of laches or
inordinate delay is a defence in equity. In equity both the parties must come to the Court with clean
hands. An equitable defence can be put up by a party who has acted fairly and honestly. A person
who is guilty of violating the law or infringing or usurping somebody else’s right cannot claim the
continued misuse of the usurped right. It was observed by Romer, J. in the matter of an application
brought by J.R.Parkington and Co. Ld., (1946) 63 RPC 171 at page 181 that “in my judgment, the
circumstances which attend the adoption of a trade mark in the first instance are of considerable
importance when one comes to consider whether the use of that mark has or has not been a honest
user. If the user in its inception was tainted it would be difficult in most cases to purify it
subsequently”. It was further noted by the learned Judge in that case that he could not regard the
discreditable origin of the user as cleansed by the subsequent history. In other words, the equitable
relief will be afforded only to that party who is not guilty of a fraud and whose conduct shows that
there had, been, on his part, an honest concurrent user of the mark in question. If a party, for no
apparent or a valid reason, adopts, with or without modifications, a mark belonging to another,
whether registered or not, it will be difficult for that party to avoid an order of injunction because
the Court may rightly assume that such adoption of the mark by the party was not on honest one.
The Court would be justified in concluding that the defendant, in such an action, wanted to cash in
on the plaintiffs name and reputation and that was the sole, primary or the real motive of the
defendant adopting such a mark. Even if, in such a case, there may be an inordinate delay on the
part of the plaintiff in bringing a suit for injunction, the application of the plaintiff for an interim
injunction cannot be dismissed on the ground that the defendant has been using the mark for a
number of years. Dealing with this aspect Harry D. Nims in his “The Law of Unfair Competition and
Trade Marks”, Fourth Edition, Volume Two at page 1282 noted as follows :

“Where infringement is deliberate and willful and the defendant acts fraudulently with knowledge
that he is violating plaintiffs rights, essential elements of estoppel are lacking and in such a case the
protection of plaintiffs rights by injunctive relief never is properly denied. “The doctrine of estoppel
can only be invoked to promote fair dealings”.

32. It would appear to me that where there is an honest concurrent user by the defendant then
inordinate delay or laches may defeat the claim of damages or rendition of accounts but the relief of
injunction should not be refused. This is so because it is the interest of the general public, which is
the third party in such cases, which has to be kept in mind. In the case of inordinate delay or laches,
as distinguished from the case of an acquiescence the main prejudice which may be caused to the
defendant is that by reason of the plaintiff not acting at an earlier point of time the defendant has
been able to establish his business by using the infringing mark. Inordinate delay or laches may be
there because the plaintiff may not be aware of the infringement by the defendant or the plaintiff
may consider such infringement by the defendant as not being serious enough to hurt the plaintiff’s
business. Nevertheless, if the Court comes to the conclusion that prejudice is likely to be caused to
the general public who may be misled into buying the goods manufactured by the defendant
thinking them to be the goods of the plaintiff then an injunction must be issued. The Court may, in
appropriate cases, allow some time to the defendants to sell off their existing stock but an injunction
should not be denied.”

(B) Thus, even assuming that the appellant’s use of its mark was honest, it would make little
difference to the question of the grant of an injunction. In the present case, even assuming that the
adoption of the mark was not dishonest, the continued user thereof was, if not dishonest, at the
appellant’s peril as we will shortly indicate. In Hindustan Pencils, the plaintiff admittedly came to
know about the user by the defendant of the infringing mark in March, 1982, and the suit was filed
only in the year 1986 i.e. after a delay of almost three years. As is evident from paragraph 39 of the
report, the first step to oppose the mark was also taken only in the year 1985 by the plaintiff having
filed an application for cancellation of the registration of the defendant’s copyright. The judgment,
therefore, applies with greater force in the present case.

24. The judgment of the learned single Judge of the Delhi High Court would by itself not be binding
on us. However, it has been cited with approval and followed by a Division Bench of this Court in
Schering Corporation & Ors. vs. Kilitch Co. (Pharma) Pvt. Ltd., 1994 IPLR 1. This judgment, in fact,
also negates Mr. Dwarkadas’ attempt to distinguish the judgment in Hindustan Pencils on the ground
that the marks in that case were identical, whereas in the present case, they are not. The same
argument raised in Schering Corporation was accepted by the learned single Judge. The Division
Bench, however, over-ruled the same, holding that the observations in Hindustan Pencils on the
question of delay and the approach to the question remained the same irrespective of whether the
violation is by the defendant adopting an identical mark or by a substantially similar mark. (Pages 6
and 7 of the report).
Another Division Bench of this Court in Sun Pharmaceutical Industries vs. Wyeth Corporation Holding
& Anr., 2005 (30) PTC, 14 (Bom.)(DB) also cited with approval, the judgment in Hindustan Pencils and
followed the judgment in Schering Corporation.

25. There are two other hurdles regarding the question that the appellant has not overcome. Firstly,
the appellant had the means of discovering the respondent’s mark. Secondly, the appellant was in
fact aware of the respondent’s mark and that they had not only opposed the appellant’s use of the
impugned mark but had adopted proceedings to prevent the same. The second aspect will be dealt
with while considering Mr. Dwarkadas’s submission that the respondent had acquiesced in the use
of the impugned mark. The appellant’s use of the marks despite the same was, therefore, at its peril.

26. As we noted earlier, the respondent’s marks were registered. The appellant was admittedly
aware of the same as a matter of fact. Even if it was not, reported decisions of this Court indicate
that the appellant not having made itself aware of the fact as to whether the same mark is a subject
matter of registration and belongs to another person cannot be heard to complain, for the use of the
mark then is negligent inasmuch as he has not taken the elementary precaution of making himself
aware by looking at the public record of the Registrar as to whether the mark in question is the
property of another. In Bal Pharma Limited vs. Centaur Laboratories Pvt. Ltd. & Anr., 2002 (24) PTC,
226 (Bom.) (DB), a Division Bench of this Court held:-

“9. Then we turn to the question of delay and acquiescence. Mr. Tulzapurkar, learned Counsel
appearing for the Respondent cites the judgment of the Supreme Court in Power Control Appliances
and Ors. v. Sumeet Machines Pvt. Ltd., MANU/SC/0646/1994 : [1994]1SCR708 wherein the Supreme
Court approvingly referred to the judgment of the Appeal Court in England in Electrolux LD v. Electrix
and quoted a passage therefrom in paragraph 34 of its judgment. Our attention was also drawn to
the judgment in Electrolux itself. Reference to the judgment in Electrolux shows that there is no hard
and fast rule that delay per se would defeat an application for interlocutory injunction. The
judgment indicates that in a situation where the defendant to an action has been using the mark,
even if concurrently, without making himself aware of the fact as to whether the same mark is the
subject-matter of the registration and belongs to another person, the first person cannot be heard to
complain for he has been using it negligently inasmuch as he has not taken the elementary
precaution of making himself aware by looking at the public record of Registrar as to whether the
mark in question is the property of another. If, however, he had taken search and, knowing full well
that the mark was the property of another person, continues to use the mark, then he runs the risk
of a registered proprietor challenging his action for infringement and merely because it is done at a
subsequent stage, he cannot be heard to complain on the ground of delay. Further discussion in the
judgment shows that in order to deny an interlocutory injunction, the delay must be such as to have
induced the defendant or at least to have lulled him into a false sense of security to continue to use
the trade mark in the belief that he was the monarch of all he surveyed. In our judgment, such are
not the circumstances here. We are not satisfied from the record that a search was taken of the
registry by the Appellant to assure itself that there was no other person who owned the mark
“MICRODINE”. Assuming that the search was taken, and the Appellant has done it consciously, then
the Appellant has to thank itself for having gambled by investing large amounts in a risky venture.
Either way, we do not think that the defence can succeed, at this stage, at least.”

Bal Pharma Limited was followed by another Division Bench in Sun Pharmaceuticals Industries
Limited vs. Wyeth Holding Corporation & Anr., 2005 (30) PTC 14.

27. Mr. Dwarkadas then contended that in the facts of the present case, the judgments would be of
no assistance to the respondents as the respondent’s conduct established that they had acquiesced
in the appellant using the said mark and had waived their rights in respect of their marks.

28(A) The question of what amounts to acquiescence on the part of a plaintiff has also been
considered in several judgments, including the judgments of this Court. Paragraph 9 of the judgment
of the Division Bench in Bal Pharma Ltd., which we have reproduced above, itself indicates that the
delay must be such as to have induced the defendant or, at least, to have lulled him into a false
sense of security to continue to use the trade mark.

In Sun Pharmaceuticals Ltd. (supra), the Division Bench rejected the contention that the
plaintiff/respondent therein was not entitled to an injunction on the ground of delay of three years.
The Division Bench further held:-

“25. The relevant para of the judgment cited by the Senior Counsel Dr. Tulzapurkar, reported in case
of Willmott v. Barber Vol IX Chancery Division, page 97, is reproduced, as under;

“It has been said that the acquiescence which will deprive a man of his legal rights must amount to
fraud, and in my view that is an abbreviated statement of a very true proposition. A man is not to be
deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to
set up those rights. What, then, are the elements or requisites necessary to constitute fraud of that
description? In the first place the plaintiff must have made a mistake as go to his legal rights.
Secondly, the plaintiff must have expended some money or must have done some act (not
necessarily upon the defendants land) on the faith of his mistaken belief. Thirdly, the defendant, the
possessor of the legal right, must know of the existence of his own right which is inconsistent with
the right claimed by the plaintiff. If he does not know of it he is in the same position as the plaintiff
and the doctrine of acquiescence is founded upon conduct with knowledge of your legal fights.
Fourthly, the defendant, the possessor of the legal right, must know of the plaintiffs mistaken belief
of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the
defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of
money or in the other, acts which he has done, either directly or by abstaining from asserting his
legal right. Where all these elements exist, there is fraud of such a nature as will entitle the Court to
restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this
will do”. [emphasis supplied]
In the above passage from Willmott vs. Barber, the parties must be transposed for the purpose of
the present case to wit, the plaintiff therein fits the role of the defendant and vice-versa.

29. In Schering Corporation & Ors. v. Kilitch Co. (Pharma) Pvt. Ltd. 1994 IPLR 1 at page 8 the Division
Bench of this Court held:-

“Once it is established that there is visual and phonetic similarity, and once it is established that the
Defendants’ adoption of the trade mark is not honest or genuine, then the consideration of any plea
as to delay must be on the basis of a consideration whether there has been such delay in the matter
as has led the Defendants to assume that the Plaintiffs have given up their contention and/or
whereby the Defendants have altered their position so that it would be inequitable to grant interim
relief to stop them from using the trade mark until the suit is decided ?”

30. The question then is whether the delay, if any, on the respondent’s part in filing the suit was of
the nature indicated in the judgments dis-entitling them to an injunction. This brings us to the facts
of the case. The facts clearly establish that the respondents have from the beginning opposed in
India and abroad, the use of the said marks by the appellant. The question of acquiescence does not
by any stretch of imagination apply in the present case.

31. The appellant claims to have used the mark since the year 2000. It is contended that the suit
having been filed in the year 2006, the respondents are not entitled to interim reliefs and that they
must be deemed to have waived their rights.

32. At this time, the sale of the respondent’s products under the said mark was about Rs.20.00
crores per annum. That the respondents took steps to protect their mark and opposed the adoption
of the impugned mark throughout this period is evident from a series of facts.

33(A) By a letter dated 22nd August, 2001, addressed to one Karari Pharmaceuticals in Uganda the
respondent’s advocate stated that they were the registered owners of the trade mark “RB TONE”
and that the products manufactured by them were in similar packages, lay-out and bearing the
deceptively similar mark “HB TONE”. The notice called upon them to cease and desist from using the
said mark.

(B)(i) By their advocate’s letter dated 20th March, 2002, the respondents informed the Registrar of
Trade Marks, Nairobi, Kenya, that they were the registered proprietors of the trade marks
“ARBITONE” and “RB TONE”; that they had been using the mark “RB TONE” in India for more than 25
years; that the mark was registered in several other countries; that they had applied for registration
of the mark in Kenya; that they had been selling the product in Kenya from January, 2000 and,
therefore, claimed earlier user compared to the appellant’s mark “HB TONE” and, therefore,
requested the Registrar of Trade Marks not to register the appellant’s mark “HB TONE”.
(ii) The Registrar of Trade Marks, Kenya, by a letter dated 27th May, 2002, addressed to the
appellant, stated that its trade-mark was accepted by the Registrar in error and that the appellant’s
mark was not registrable under the provisions of the Trade Marks Act, Kenya.

(C) It is pertinent to note that the appellant admitted in its affidavit in reply that the respondent had
been litigating against it in Uganda with regard to the same trade-mark viz. “HB TONE” at least since
August, 2001 and in Kenya, at least since March, 2002. The respondents thus opposed the impugned
mark almost immediately after the appellant commenced using it.

34(A) On 3rd February, 2003, respondent No.2 filed Criminal Complaint No.16 of 2003 against
unknown persons before the Judicial Magistrate, First Class at Uran, Maharashtra. On 4th February,
2003, an ex-parte order was passed under section 156(3) of the Criminal Procedure Code. Pursuant
thereto, on 14th February, 2003, 333 cartons of the appellant’s products bearing the trade-mark “Hb
TONE” were seized from the Central Warehousing Corporation. The appellant’s Directors had
obtained anticipatory bail.

(B) Mr. Dwarkadas, however, relied upon the fact that the goods were thereafter returned to the
accused and the fact that the criminal complaint had been dismissed in August, 2005.

35. Firstly, the seized goods were not ordered to be returned to the appellant unconditionally.
Secondly, the criminal complaint was dismissed not on merits but for default and a Writ Petition
against the order of dismissal is pending in this Court. Thirdly, these facts are not material to the
question of acquiescence and/or waiver

36(A)(i) The goods were not released unconditionally as is evident from two orders of the Court. The
order dated 16th June, 2003, passed by the Judicial Magistrate, First Class, Uran, reads as under:-

“ORDER

1. The seized muddemal property, after sealing be returned to applicant after execution of
indemnity bond of Rs.50,000/- on the condition that he shall not sell out muddemal property and
shall produce the same as and when required by the court.

2. The Investigation officer is directed to take photographs of muddemal property after sealing of all
cartoons bearing signature of I.I. and applicant and objector i.e. original complainant and produce on
record of this application, and also with him for investigation purpose.
3. The original complainant i.e. Raaj Cirumalla is directed to assist the Investigation office in this
concern. If it is found that original complainant is not assisting them muddemal property be released
by sealing its bearing signature of Investigation officer and applicant and two witnesses.”

(ii) The appellant had filed Criminal Revision Application No.100 of 2003 in the Court of Sessions
Judge, Raigad, Alibag. The same was disposed of by an order dated 19th July, 2003. The ad-hoc
Additional Sessions Judge accepted the contention that the seized goods are likely to be destroyed
and decomposed during the pendency of the trial and, therefore, modified the order dated 5th June,
2003, in the following terms:-

“ORDER

Instead of condition directing the applicant mentioned in para-1 of the order that he shall not sell
out muddemal property and shall produce the same as and when required by the court, the
following order is passed :

One bottle from each carton be kept as sample, while remaining bottles be handed over to the
applicant which he can sale the property. However, he has to deposit the amount of sale proceeds in
the lower court in case the learned Judicial Magistrate, First Class, Uran, directs him to do so at the
trial.”

The suggestion that the the goods were returned unconditionally or pursuant to a decision on merits
in the appellant’s favour is, therefore, unfounded. Indeed, by the said order, the goods had been
returned only on the condition that the appellant would not sell the property and would produce the
same when required by the Court. In fact, the evidence has been preserved for the purpose of the
trial.

(B) The complaint was not dismissed on merits. It appears that on 2nd August, 2005, the said
Criminal Case No.16 of 2003 was dismissed as no accused were served. The complaint had been filed
against an unknown person. The dismissal was, therefore, not on merits. The respondent filed Writ
Petition No.916 of 2007 against the said order. The same was admitted by an order dated 22 nd
September, 2008 and is pending in this Court.

37. The proceedings support the respondent’s case that far from having acquiesced in the appellant
using the trade-mark and far from their having waived their rights claimed in the suit, they have, in
fact, vigorously pursued the preservation and protection thereof. Even if the writ petition is
dismissed finally, it would make no difference to the point under consideration viz. as to whether
there was acquiescence or waiver on the respondent’s part. Even assuming that there was
negligence in prosecuting the criminal complaint, it would not lead to the conclusion that the
respondents had acquiesced in the appellant infringing their marks or that the respondents had
waived their rights in respect of their marks.

38. On 5th March, 2003, the appellant had made three applications for registration of its mark being
application nos.1180284, 1180285 and 1180286. The appellant obtained registration in respect of its
application no.1180286. The respondents opposed application nos. 1180284 and 1180285 by filing
opposition nos.292365 and 292366, both dated 9th October, 2006. The applications are pending.
Mr. Dwarkadas contended that the respondent’s not having opposed application no.180286, must
be deemed to have acquiesced in the appellant’s use of the impugned mark.

39. Dr. Tulzapurkar submitted that the only reason for the respondents not having opposed the
registration of the impugned mark by application no.1180286 was that they had not noticed the
same. He further stated that the respondents thereafter filed a rectification application challenging
the grant of the registration and that the same is pending. Mr. Dwarkadas contended that this
statement has not been made on affidavit and ought, therefore, to be ignored. For the purpose of
this appeal, we shall do so. Despite the same, we are inclined to accept Dr. Tulzapurkar’s submission
that the only reason why the respondent did not oppose the registration under the appellant’s
application no.1180256 is that they had not noticed the same at the relevant time. This is evidenced
by several facts.

40. Firstly, the background of the matter, especially the vigorous action that the respondents have
taken, both in India and abroad for protecting their marks, belies the contention that they
acquiesced in the appellant using the impugned mark. It just does not stand to reason. Further,
application no.1180285, which was admittedly opposed by the respondent by their application
no.292366, was also in respect of the mark “Hb TONE” although it is part of a label mark. It is
impossible, therefore, to accept the appellant’s contention of waiver and acquiescence merely
because there was no opposition to the registration application no.1180286. The respondents
having defended their marks throughout in India and abroad the only reasonable explanation for
their having omitted to oppose only one application for registration of the impugned mark is that it
escaped their attention.

41. There is, therefore, a valid explanation for the delay, if any, on the respondents part in filing the
suit. Far less have the respondents acquiesced in the appellant using the mark “Hb TONE” / “HB
TONE”. Nor have the respondents waived their rights qua their marks.

Re: IV: Whether the respondents have made a false statement disentitling them to interlocutory
reliefs?

42. Mr. Dwarkadas further submitted that the respondents are not entitled to interim reliefs as they
had made a false statement in paragraph 13 of the plaint. Paragraph 13 of the plaint refers to the
said Criminal Complaint No.16 of 2003. It is stated that after the appellant made an application on
20th April, 2003, for the return of its products, the appellant discontinued exporting goods bearing
the trade mark “Hb TONE”. Mr. Dwarkadas submitted that the statement was false as evidenced by
the fact that the appellant had, in fact, exported goods bearing the said mark even thereafter. He
relied upon the statement of year-wise export sales of its products with the mark “Hb TONE” for the
years 200-2001 to 2005-2006. The relevant year for the purpose of this allegation is the year 2002-
2003. During this period, it is alleged that the appellant exported goods worth about Rs.9,99,314/-.

43. It is difficult to see how the same, even if true, establishes the respondent’s knowledge thereof.
Firstly, there is no mention of the countries to which the goods were exported during this period. In
other words, there is nothing to show that the exports were also to countries in which the
respondents may have had the means to notice the same by virtue of their also trading in those
countries. We hasten to add that even if these particulars were furnished, it would not establish
knowledge on the respondent’s part of the said exports. This would be too flimsy a basis to deny the
respondents reliefs, which they are otherwise entitled to on the ground of acquiescence or waiver.

Re: V: Whether the respondent’s case is not based on a word mark, but only on a label mark?

44. Mr. Dwarkadas submitted that the respondents case of passing off qua RB TONE is based on the
“RB TONE” label mark and not on the word mark “RB TONE”. In this regard, he relied upon the fact
that “ARBITONE” and “HB RON” were registered as word marks, whereas what was registered was
the label mark containing as a prominent feature, the word mark “RB TONE”. He submitted that
even the reliefs claimed were not for passing off or infringement of the word mark.

45. From a reading of the plaint as a whole as well as the cease and desist notices it is clear that the
cause of action is based, not merely on the label mark, but on the word mark “RB TONE” as well. This
is also clear from prayer (b) wherein the respondents have sought relief against passing off qua their
trade marks, including “RB TONE”. It is not limited to the label mark. Merely because the label mark
was registered it would not preclude the respondents from basing their cause of action also on the
word mark which forms a predominant feature thereof.

Re: VI: Whether the respondents are not entitled to interlocutory reliefs on the ground that the
latter part of the marks “TONE” is in common usage for similar products in a series of marks?

46. Mr. Dwarkadas contended that a part of the mark viz. “TONE” was common to the trade. Mr.
Dwarkadas stated that there are several marks with the suffix “TONE”.

47. However, here again the pleading is not sufficient to establish this defence on facts. Nor was
there any evidence to prove the same. As rightly pointed out by Dr. Tulzapurkar, there is no material
of extensive use and/or availability of such rival marks bearing the alleged common feature. He
relied upon several judgments in this regard including in Corn Products Refining Co. v. Shangrila Food
Products Ltd., AIR 1960 SC 142 and Schering Corporation & Ors. v. V. Kilitch Co. (Pharma) Pvt. Ltd.,
1994 1 IPLR 1 (at pg.8). It is adequate to refer to the following observations of the Division Bench in
Charak Pharmaceuticals v. M.J. Exports Pvt. Ltd., 1993 IPLR 1 at page 44:-

“………….. Shri Daruwalla referred to the decision reported in 1967 Fleet Street Patent Law Reports
39 to show that the suffix `TEST’ used in the mark of the four contestants was common to the trade
and, therefore, it was held that there was no likelihood of deception or confusion. It was urged that
the word `TONE’ is in common use in the trade and open to the trade use. The submission proceeds
on the assumption that the word `TONE’ is in common use in the trade. Shri Tulzapurkar controverts
the claim by submitting that there is no evidence on record to indicate that the word `TONE’ is
common to the trade of medicinal and pharmaceutical preparations. Shri Daruwalla attempted to
refer to the affidavit filed by Kishore Dharnidhar Shroff, one of the partners of the appellants, on
March 12, 1968 in some other proceedings. It is not permissible to refer to the said affidavit without
the affidavit being on record and without giving an opportunity to the appellants to meet the claim.
Shri Daruwalla did not dispute that there is nothing on record to establish that there are several
marks on the Register using the suffix `TONE’. Even assuming that some marks are registered using
the suffix `TONE’ that by itself is not sufficient to assume that there would be no likelihood of
deception or confusion. It is now well settled that the mere fact that the mark is on the Register is
not sufficient but it is necessary to establish the user of such mark in the market. In absence of any
material, it is not possible to accede to the submission of Shri Daruwalla that the suffix `TONE’ is
common to the trade. In our judgment, on the facts and circumstances of the case, the conclusion is
inescapable that the mark proposed by respondent No.1 is similar to the registered mark on the
appellants and the mark of respondent No.1 is deceptively similar and is likely to deceive or cause
confusion.”

48. Thus, the mere reliance upon the Register to indicate the registration of the marks with the suffix
“TONE” does not establish the defence that it is common to the trade.

Re:VII. Whether in view of section 56 of the Trade Marks Act, 1999, the action for infringement or
passing off is maintainable despite the appellant only exporting its goods and not selling them in
India?

49. Mr. Dwarkadas submitted that the question of infringement or passing off cannot and does not
arise as the appellant neither sells nor intends selling its products in India under the said mark “Hb
TONE”.

The appellant only exports its products bearing the said mark. In any event, according to him, section
56 does not apply to an action for passing off. He submitted that this is so because to establish
infringement the plaintiff does not have to show user, commercial or otherwise. However, in the
present case of passing off “use” is necessary. Accordingly, he submitted that if a mark is not used in
India, there is no question of protecting either the proprietor of the mark or the general public.
Therefore, a passing off action does not fall within the ambit of section 56.
50. Section 56 of the Trade Marks Act, 1999, reads as under:

“56. Use of trade mark for export trade and use when form of trade connection changes.(1) The
application in India of trade mark to goods to be exported from India or in relation to services for use
outside India and any other act done in India in relation to goods to be so exported or services so
rendered outside India which, if done in relation to goods to be sold or services provided or
otherwise traded in within India would constitute use of trade mark therein, shall be deemed to
constitute use of the trade mark in relation to those goods or services for any purpose for which
such use is material under this Act or any other law.

(2) The use of a registered trade mark in relation to goods or services between which and the person
using the mark any form of connection in the course of trade subsists shall not be deemed to be
likely to cause deception or confusion on the ground only that the mark has been or is used in
relation to goods or services between which and the said person or a predecessor in title of that
person a different form of connection in the course of trade sub- sisted or subsists.”

Dr. Tulzapurkar submitted that the point has been considered by a Division Bench of this Court to
which one of us (S.J. Vazifdar, J.) was a party in the case of M/s. Maxheal Pharmaceuticals (India) vs.
Shalina Laboratories Pvt. Ltd. in Appeal No.88 of 2005 in Notice of Motion No.2638 of 2004 in Suit
No.2663 of 2004 dated 16th February, 2005. However, the applicability of section 56 was not
decided by the Division Bench. This is clear from paragraph 7 of the judgment where the Division
Bench stated that it was not necessary for it to dwell on the point as the point taken by the appellant
in that matter was raised for the first time only in the appeal.

Our attention was not invited to any other judgment under the said Act on the point. We must,
therefore, deal with this question on principle.

51. It is admitted that the appellant applies the impugned mark to the goods in India which are
thereafter exported. The impugned mark has thus been applied to the appellant’s goods within the
meaning of section 56. Had the mark been applied in relation to goods to be sold within India, it
would undoubtedly have constituted use of the trade mark in India. By virtue of section 56, the
application in India of the trade mark, although to goods to be exported from India, is deemed to
constitute use of the trade mark in relation to the said goods “for any purpose for which such use is
material under the Trade Marks Act, 1999, or any other law”. The plain language of section 56,
therefore, constitutes the application in India of trade marks even to goods to be exported from
India as use of the trade mark in relation to those goods for any purpose for which such use is
material under the Act or any other law.
The use of a trade mark is relevant for more than one reason. It is relevant to a party seeking to
establish goodwill and reputation in a mark in an action for passing off. It is also relevant, even if it is
not necessary, to establish the act of infringement or passing off.

52. There is little doubt that the use of a trade mark within section 56 can be relied upon to maintain
an action for infringement. Section 28 of the Act gives to the registered proprietor of the trade mark,
the exclusive right to “use” the trade mark in relation to the goods or service in respect of which the
trade mark is registered and to obtain relief in respect of infringement thereof in the manner
provided by the Act.

Section 29 enumerates various circumstances that would constitute infringement of registered trade
marks by the use thereof by a person who is not entitled to use the same. For instance, Section 29 of
the Act provides that a registered trade mark is infringed by a person who, not being a registered
proprietor or a person using by way of a permitted use, “uses” in the course of trade, a mark which
is identical with or deceptively similar to the registered trade mark. Section 29(2) provides that a
registered trade mark is infringed by a person who not being a registered proprietor or a person
using by way of a permitted use, uses in the course of trade, a mark which because of the factors
enumerated therein is likely to cause confusion on the part of the public or which is likely to have an
association with the registered trade mark. Section 29(6)(c) expressly provides that for the purpose
of section 29, a person uses a registered mark if he, inter-alia, imports or exports goods under the
mark.

53. Thus section 56 would clearly apply to an action for infringement if the trade mark is applied in
India to goods to be exported from India as the same is deemed to constitute use of a trade mark in
relation to those goods for any purpose for which such use is material under the Act.

54. The position would be no different in the case of a passing off action. Whether passing off is
considered to be an action under the said Act in view of section 27(2) or not makes little difference
in view of the concluding words of section 56 “or any other law”. Even in a passing off action, the use
of the impugned mark by the defendant is important. It is one of the factors which even if not
necessary, entitles a plaintiff to maintain an action for passing off. There is no warrant for limiting
the ambit of section 56 which is in consonance with the intention of the Legislature to protect
intellectual property rights. There is nothing in the plain language of section 56 that supports Mr.
Dwarkadas’ alternative submission that section 56 is restricted to the protection of the statutory
right of infringement and does not apply to an action for passing off.

A Court must tread carefully and be slow to imply a restriction which does not appear from the
words in a statute.

Section 27 of the Act reads as under:

27. No action for infringement of unregistered trade mark.- (1) No person shall be entitled to
institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered
trade mark.

(2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off
goods or services as the goods of another person or as services provided by another person, or the
remedies in respect thereof.”

A passing off action is a recognized legal right in India. We need go no further than refer to the
Objects and Reasons for clause 27, which states that it “recognizes the common law rights of the
trade mark owner to take action against any person for passing off goods as the goods of another
person or as services provided by another person or the remedies thereof”.

56. Assuming that the language of the section is not clear, we would lean in favour of a construction
which would confer the benefit of proprietorship in a trade mark rather than deny the same. A view
to the contrary would confer a benefit upon the unauthorized user of a mark thereby prejudicing the
rights of the proprietor of the mark. If there was any ambiguity in section 56, we would have
preferred the view that the intention of the Legislature was to protect the rights of the proprietor of
the trade mark against the unauthorized use thereof. The Legislature has and if we may add, with
respect, justifiably not restricted the ambit of section 56 in order to grant such protection as is
possible within the territorial limits of the country to the proprietor of trade marks.

57. There is nothing to suggest that if an infringing mark is only applied to products to be exported
from India, the proprietor of the mark or the general public, does not have any interest which
requires protection. There are innumerable reasons why and circumstances in which it could be said
that even in a passing off action, the proprietor of a mark and the general public require protection
in respect of the goods to be exported from India bearing the infringing mark. Merely because goods
bearing an impugned mark are only exported it does not follow either as a question of law or even of
fact that the proprietor of the mark is not likely to suffer substantial damage to his property in the
goodwill. The assumption that goods that are exported are not exposed to residents or citizens of
this country is fallacious. The mark is exposed by the unauthorized user thereof to various persons,
even within the country, including manufacturers of the labels containing the mark, the
manufacturers of cartons on which the labels may be applied and the containers in which the
products are sold, the transporters of the goods and the various authorities that deal with the goods
before they are actually exported and in the course of export. The process of inspection, quality
control and export would involve the exposure of the infringing mark to employees, workers,
proprietors and a variety of other persons.

58. Faced with this, Mr. Dwarkadas submitted that even if section 56 applies to passing off actions,
the respondent must prove the factum of passing off in the country of export. In other words,
according to him, passing off in respect of goods exported from India involves the concept of dual
actionability. The principle requires the plaintiff to establish two factors. Firstly, that the country to
which the goods are exported recognizes the action of passing off. Secondly, the factum of passing
off in the country of export must also be proved.

59. We do not find anything in the plain language of section 56 that warrants the application of the
principle of dual actionability. We are not inclined to read into the section, restrictions absent
therein.

60. The application of the mark by the appellant to the goods exported by it thus constitutes use of
the mark by it in India. The respondent’s action for passing off is, therefore, maintainable.

Re: VIII: Whether this Court has territorial jurisdiction to entertain the respondent’s suit?

61. An issue as to territorial jurisdiction was sought to be raised by Mr. Dwarkadas. The issue,
however, was not raised before the learned single Judge. Nor has it been pleaded. We are,
therefore, not inclined to allow the appellant to raise the plea in this appeal. It is important to note,
in any event, that the appellant is a resident of Mumbai and carries on business in Mumbai. Mr.
Dwarkadas did not press this point any further.

62. In the circumstances, the appeal is dismissed. The stay granted by the learned single Judge shall
continue for a period of six weeks from today.

CHIEF JUSTICE

S.J. VAZIFDAR, J.

NF