2000 (5) TMI 1060 - SC - Companies Law

Supreme Court Upholds Dismissal of Appeal in Trademark Dispute

SM. DYECHEM LTD. Versus CADBURY (INDIA) LTD.

The Supreme Court dismissed the appeal, concurring with the High Court's decision to vacate the temporary injunction in a trade mark dispute. The Court ... Whether there is prima facie any deception and hence infringement and whether there is any 'passing off'? Held that:- If, in a given case, the essential features have been copied, the intention to deceive or to cause confusion is not relevant in an infringement action. Even if, without an intention to deceive, a false representation is made, it can be sufficient. Similarly, confusion may be created unintentionally but yet the purchaser of goods may get confused for he does not have the knowledge of facts which can enable him not to get confused. In the present case, this aspect need not detain us in as much as we have already held that the relative strength of the case is in favour of the defendant. Further this aspect is connected with the type of buyer whom the law has in mind and we shall be presently dealing with this aspect also. It is not necessary for us to go into the contention of the respondent that the defendant was using the word PICNIC in other countries over a long period along with the word `Cadbury' and that a question of transborder reputation protects the defendant. For the above reasons, we hold that on the question of the relative strength, the decision must go in favour of the defendant that there is no infringement and the High Court was right in refusing temporary injunction. For Passing off and infringement - differences - Here the point is in relation to relative strength of the parties on the question of `passing off'. As discussed under Point 5, the proof of resemblance or similarity in cases of passing off and infringement are different. In a passing off action additions, get up or trade-dress might be relevant to enable the defendant to escape. In infringement cases, such facts do not assume relevance.The fact that the defendant's wrapper contains the word `Cadbury' above the words PICNIC is therefore a factor which is to be taken into account. Buyer's ignorance and chances of being deceived.In the result, on the question of passing off, the relative strength of the case again appears to us to be more in defendant's favour. Here, the trial Court gave importance to phonetic similarity and did not refer to the differences in essential features. It did not also have the wary customer in mind. On the other hand, the High Court's approach in this behalf was right as it noticed the dissimilarities in the essential features and concluded that viewed as a whole, there was neither similarity nor scope for deception nor confusion. (No doubt both Courts went into the validity of the plaintiff's registered mark and into the question of `distinctiveness' of the word PIKNIK under section 9(1)(e). But in our view that was not necessary). Thus, when wrong principles were applied by the trial Court while refusing temporary injunction, the High Court could certainly interfere. Point 7 is decided accordingly. In the result, the appeal is dismissed. Issues Involved:1. Validity of the plaintiff's trade mark.2. Presumption of validity under Section 31 and conclusiveness under Section 32.3. Distinctiveness of the trade mark under Section 9(1)(e).4. Principles for granting temporary injunction in trade mark cases.5. Comparative strength of the case on the question of infringement.6. Relative strength of the case for passing off.7. Delay in filing the suit and appellate court's interference in interlocutory proceedings.Detailed Analysis:Point 1, 2, and 3: Validity of the Plaintiff's Trade MarkThe defendant argued that the plaintiff's trade mark 'PIKNIK' was invalid as it did not satisfy the requirements of Section 9(1)(e) of the Trade and Merchandise Marks Act, 1958, and was not distinctive. The plaintiff contended that the registration of their trade mark raised a presumption of validity under Section 31 and that the validity had become conclusive after seven years under Section 32. The Court decided not to delve into the validity of the trade mark in the interlocutory proceedings as it was already pending in rectification proceedings. Therefore, the Court focused on whether there was prima facie deception and passing off.Point 4: Principles for Granting Temporary InjunctionThe Court referred to the principles laid down in American Cyanamid Co. vs. Ethicon Ltd., which emphasized that it was sufficient if a 'triable issue' was presented. However, the Court also noted that the comparative strength of the cases of either party should be considered, as established in Colgate Palmolive (India) Ltd. vs. Hindustan Lever Ltd.Point 5: Comparative Strength of the Case on InfringementThe Court examined whether the defendant's mark 'PICNIC' was deceptively similar to the plaintiff's mark 'PIKNIK'. It was established that the essential features of the plaintiff's mark included the peculiar script, the curve in which the words were inscribed, and the caricature of a boy with a hat. The defendant's mark lacked these features. The Court emphasized the importance of dissimilarities in essential features over similarities, concluding that the marks were not deceptively similar.Point 6: Relative Strength of the Case for Passing OffIn passing off actions, the Court noted that additions, get-up, or trade-dress might be relevant. The presence of the word 'Cadbury' on the defendant's goods was a significant factor indicating no passing off. The Court also highlighted that the type of buyer considered should be one with reasonable comprehension and not easily deceived. The trial Court's conclusion that there was scope for deception was found to be incorrect.Point 7: Delay in Filing the Suit and Appellate Court's InterferenceThe issue of delay in filing the suit was deemed insignificant given the findings on infringement and passing off. The High Court's interference was justified as the trial Court had applied wrong principles by focusing on phonetic similarity without considering the dissimilarities in essential features.Conclusion:The Supreme Court dismissed the appeal, agreeing with the High Court's decision to vacate the temporary injunction. The findings were limited to the interlocutory proceedings and would not affect the final decision in the suit. The Court reiterated the High Court's direction for the defendant to maintain accounts and provide an undertaking for damages if the suit succeeded.