HONBLE DR. JUSTICE B. SIVA SANKARA RAO
C.M.A.No.27 of 2017
28-11-2017
M/s Hotel Swagath Appellant/Plaintiff
M/s Hotel Swagath East Court .Respondent/Defendant
Counsel for the appellant:Sri K. Mohan Kumar
Counsel for the respondent :Sri Venkat Reddy Douthi Reddy
<GIST:
>HEAD NOTE:
? Cases referred
1.(1946) 63 RPC 39 HL
2.(2004) 28 PTC 404 (Delhi)
3.(1970) RPC 238
HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO
CIVIL MISCELLANEOUS APPEAL No.27 of 2017
ORDER:
The appellant-M/s Hotel Swagath (registered partnership firm)
is plaintiff in O.S.475 of 2016 on the file of the IX Addl.Cheif Judge, City
Civil Court, filed for the relief of permanent injunction restraining
defendant-M/s Hotel Swagath East Court(represented by V.Narasimha
Reddy) and his men, his successorsin-interest and others claiming
under him from infringing the plaintiffs exclusive statutory right to the
registered trademark Swagath and common law right to the trade
name/trademark/service mark of the plaintiff and from passing off his
business under the impugned trade name consisting of Swagath with
or without any laudatory epithet or generic or descriptive expressions
as its prefix or suffix depicted in any form or in any language, which is
identical or similar or deceptively similar, either visually, phonetically
or structurally to the plaintiffs registered
tradename/trademark/service mark, Swagath as the business of the
plaintiff.
2. During pendency of the suit, the plaintiff filed I.A.No.817 of
2016 U/O.XXXIX Rules 1 and 2 r/w Sec.151 CPC for grant of interim
injunction against the defendant. After contest, the trial Court
dismissed the petition by order dt.14.10.2016.
3. Impugning said order, the plaintiff preferred the present
appeal with grounds in memorandum of appeal that the lower court
failed to appreciate or understand either the facts of the case or the
provisions of the Trademarks Act, 1999 or the principles laid down in
common law relating to trademarks under which the suit is filed or the
case law relating to the subject matter of the suit. The lower Court
failed to appreciate that the appellant is the registered user of the
trademark (label) under No.20222183 and should have recorded its
specific finding on the question of infringement. The lower Court
failed to appreciate the difference between the rights conferred by
virtue of registration of the trademark under Section 28 of the Act and
the rights acquired by common law by use of the mark prior in point of
time. The lower Court erred in not recording its specific findings on
the questions relating to infringement and passing off actions as
required by law. The lower Court erred in ignoring the age old
principle relating to passing off action under the Trademarks Law that
similarity between the competing marks is to be taken into
consideration while determining the likelihood of deception and
confusion which is being followed by various Courts of the country
including the Apex Court. The lower Court erred in taking into
consideration the dissimilarity between the competing marks while
determining the likelihood of deception and confusion and coming to
the conclusion that there is no likelihood of deception and confusion.
The lower Court erred in holding that a slight difference between the
plaintiffs and the defendants trading style is a sufficient distinction
by blindly following the extract of a part of the decision in Office
Cleaning Services Ltd. Vs. Westminister Window and General Cleaners
Ltd. borrowed from Bharat Hotels Limited Vs. Unison Hotels Limited
without having the full text of the decision of House of Lords to
appreciate the circumstances under which the said finding was arrived
at by the House of Lords. The lower Court also erred in applying the
dictum in the decision of the House of Lords in Office Cleaning
Services Ltd. Supra that a slight difference between the descriptive
words, services and association occurring at the end of the
respective services of the plaintiff and the defendant would be
sufficient to distinguish their services in the absence of fraud, to the
present case where the trading styles of both the parties consist of the
fancy word Swagath as prefix part, which is not a descriptive word.
The lower Court has failed to appreciate the decision in Effluent
Disposals Ltd., Vs. Midlands Effluent Disposal Ltd. that the dictum
small differences may suffice in cases concerned with the descriptive
names in Office Cleaning Services Ltd. supra does not apply to the
case before them where the addition of MIDLANDS as prefix to an
otherwise identical name amounted to no distinction at all aptly
applies to the present case where the common words, Hotel
Swagath, East Court are added in an insignificant way as suffix to an
otherwise identical trading style of the plaintiff. The lower Court also
failed to appreciate the difference between fancy, generic or
descriptive and common words. The lower Court also failed to
appreciate that while the fancy word like Swagath indicates a single
source, the generic or descriptive words like, hotel, restaurant
etc., indicate the nature of services/goods and the common words are
the words which have been in use and became publici juris. The lower
Court failed to appreciate that the consumers/customers always
remember and identify the services/ goods with the distinctive word
SWAGATH, which appears predominantly in the appellants trading
style and not by the last common words like, East Court occurring in
the trading style of the respondent and that there is every likelihood of
confusion or deception being caused in the minds of the consuming
public. It is not out of place to submit that the word Swagath which
is recollected by the consumers and not the other descriptive
expressions contained in the trading styles of the rival parties and
therefore the goodwill and reputation revolves around the word
Swagath. The lower Court failed to appreciate that the case of the
plaintiff is that the reputation is attached to the tradename/
trademark can neither be regained nor compensated in terms of
money, if lost, and has erroneously held that the appellant has not
produced any material to show that their business has been adversely
affected by the use of the expression, Hotel Swagat East Court by the
respondent. It is not out of place to submit that the courts including
Apex Court on several occasions granted injunctions in passing off
cases, when there is likelihood of creating confusion or deception in
the minds of the consumers. The lower Court failed to appreciate that
the trading style of the plaintiff containing the prefix fancy word
Swagath is inherently distinctive entitling them to the grant of
injunction when the defendant fraudulently adopted the prefix
identical fancy word in conjunction with descriptive or common words
East Court for identical business. The lower Court erred in holding
that if the respondent/defendants business is stopped the irreparable
loss cannot be compensated whereas the petitioner/plaintiff can be
compensated for the damages prayed in the suit, ignoring the fact that
the damage caused to the hard earned goodwill and reputation can
neither be restored nor be compensated in terms of money. The lower
Court erred in applying the irrelevant decisions without appreciating
the distinction between the facts in those cases and the facts in the
present case and also in considering the documents marked as Exs.P.1
to P.3,P.7 and P.13. Hence, to set aside the order impugned herein of
the lower Court.
4. Heard both sides and perused the material on record.
5. The factual background, in deciding the appeal lis while
sitting against the impugned dismissal order of the temporary
injunction application pending disposal of the suit for permanent
injunction with regard to the registered trademark and since earlier of
the passing off rights, is that:
a) The case of the plaintiff is that it is one of the largest,
renowned and reputed business houses rendering the services of hotels
snack bars food catering and restaurants under the tradename/
trademark/servicemark, Swagath, preceded by the generic or
descriptive expression Hotel and they have been continuously
rendering the services bearing the service name in various parts of the
erstwhile composite state of Andhra Pradesh from 1991 and also after
its bifurcation in both the States of Andhra Pradesh and Telangana,
that plaintiffs partnership firm was though registered bearing No.04483
of 1994, dt.26.05.1994, the partnership firm was constituted with effect
from 09.04.1991 in continuously, extensively and openly rendering the
hotel services under the name and the style of Swagat(vegetarian
restaurant) till it was registered and continue to provide said services
by the registered firm as Hotel Swagath with the Registrar of Firms and
wherein Swagath being the key word and main feature in identifying
and recognizing their services known as Swagath among the public in
general and the customers who patronize their services in particular.
In 1993, the plaintiff created an artistic logo consisting of the letters
H and S being the acronym of the tradename Hotel Swagath and
they being the originators of the artistic work in the logo enjoy the
copyright therein and applied for registration of the composite label
consisting of the letters H and S and the expression Hotel Swagath
under the trademarks Act, 1999 and obtained its registration under
No.2022183 in class-43 in respect of the services providing food and
drinks, catering, hotels, restaurants and snackbars; accommodation
bureaux(hotels), rental of temporary accommodation, canteens,
barservices, holiday camp services(lodging). They also sought
registration of the mark Swagath word per se under No.2037599,
class-43 in respect of the same description of services as aforesaid
mention. While so, also was granted SWAGATH marriage and Function
Hall in 2003 a partnership firm and Dhanturi group of hotels private
limited to render hotel services under the name and style consisting of
Swagath as a key word of main feature thereof with liberty to add
any further suffix in the twin cities of Hyderabad and Secunderabad,
the first license started service under the name and style of hotel
Swagath Grand at A.S.Rao nagar, Malkajgiri and Suchitra Swagath
Grand Conventional Hall, at Jillellaguda and Swagath marriage and
function hall at Ameerpet, the second licensee started hotel service
under the name and style of hotel Swagath at Kukatpally, Swagath
residency at K.P.H.B. and hotel Swagath grand at Nagole. In all 9
hotels consisting of SWAGATH of the main feature or key word thereof
are existing under the plaintiffs control and supervision in the twin
cities of Hyderabad and Secunderabad. By virtue of origination of the
artistic logo and its registration as part of the composite label
consisting of the expression Swagath and continuous user of the
expression Swagath in relation to the services rendered by them
from 1991 they enjoy right thereof to the exclusion of the others under
the Trademark Act, 1999 and Copyright Act, 1957 and are entitled to
restrain others from rendering similar service by using any artistic logo
or expression Swagath which is identical with, same or similar or
deceptively similar to the artistic logo or the expression Swagath
with or without the logo or any other prefix or suffix. They came to
know that the respondent started rendering identical descriptive
services under the tradename/
trademark/servicemark Hotel Swagath East Court, the prefix part of
Swagath, viz; Hotel is generic or descriptive and suffix part of
Swagath, viz; East Court being laudatory epithets which is identical
and similar with the main feature or key word of their
tradename/trademark/
servicemark, Hotel Swagath got issued a cease and desist notice
bearing No.TMC.L:7765:2016/17,dt.15.04.2016 through their advocates
Rao and Rao Secunderabad and though respondent received it on
25.04.2016, did not give reply. Respondent is not prior user of the
tradename/
trademark/servicemark Hotel Swagath, its main feature or keyword
being Swagath. Under passing off action law, the rights of prior user
being superior placed on higher pedestal against the subsequent user
of the mark. The malafide intention of the respondent in adopting
identical tradename/trademark/servicemark and similar service is
nothing but to pass off his business/service as their business/service
and to make easy gain at the cost of reputation and goodwill built
over it at a heavy cost of plaintiff which cannot be compensated in
terms of money of such invasion of this property right and thereby
respondent should not be allowed to usurp such rights of plaintiff in
reaping without sowing being not entitled apart from the statutory
right the plaintiff got over Swagath to prevent the respondent of such
user by infringement and thus entitled to the suit relief and pending
disposal for the temporary injunction as the available relief to invoke,
from the prima facie case, balance of convenience and irreparable
injury otherwise being caused.
b) The case of the defendant is that the suit claim is false with
unclean hands by suppression of material facts, plaintiff is not
competent to file the suit, the word Swagath per se is not registered
on the name of the plaintiff, in the plaintiff firm with four partners as
per the firm registration and income tax form 45-D and no
authorization by other partners by D.Ravinder filed with plaint much
less with leave of the Court under Rule 32 of the CRP and there is no
cause of action to the suit claim which is also barred by non-joinder
and mis-joinder of parties. The defendant is running hotel business
with name and style Hotel Swagath East Court since 2010 without any
interference and it was originally coined as Swagath Hotel Vegetarian
in the year 2005 and thereby running in use of the word Swagath of
the Hotel name at Santoshnagar, even to the knowledge of plaintiff
and the operation of the defendant extended in 2010 at Kharmanghat
road. The defendant coined the word Swagath bonafide and honestly
to mean welcome so it is a generic and common word for services
rendered in hotel and hospitality business and there are several hotels
in and around Hyderabad with similar name Swagath and no one can
monopolize the word Swagath, even plaintiff is running the hotel
business in rendering services under the name and the style Hotel
Swagath since 1994. The user status mentioned in the plaintiffs
trademark application is since 24.10.1993 and the firm registered later
is on the name Hotel SWAGATH on 26.05.1994 and the partnership
deed, dt.09.04.1991 indicates the firm name as Swagath Vegetarian
Restaurant and there are conflicting statements with regard to the
user status thereby. The trademark application of plaintiff No.2022183
for registration of Hotel Swagath as a devise, is filed on the name of
two partners Danturi Harishankar and Ravinder contrary to the
mention of more names in the partnership deed. It is false to state
that SWAGATH is the keyword in the composite trademark Hotel
Swagath, for the trademark is to be considered as a whole and not be
dissected including for infringement of passing off and plaintiff cannot
pickup the word Swagath from the composite trade mark to claim
monopoly over the word Swagath. The plaintiffs trademark Hotel
Swagath consists of letters S and H in the circle along with the word
Hotel and Swagath and as per Section 17 of the Trademark Act,1991
plaintiff can only claim rights for the composite trademark consisting
of the words hotel Swagath and logo consisting S and H and
trademark registration certificate on application No.2022183 clearly
indicate that conditional order was passed allowing the trademark
Hotel Swagath restricted for States of AP and Telangana. Said
trademark is registered as associated trademark along with trademark
application 443819 and Registrar of Trademarks initially objected for
registration of trademark Hotel Swagath for the goods in clause-43 of
Section 11 of the Act. Similar trademarks are in progress of
registration on the name of the different entities and the plaintiff
replied to the objection of Registrar saying - a) The Applicants
trademark is for the registration of trademark Hotel Swagath as a
device. Whereas, the marks reflected in the Search Report are word
marks and also channel of distribution and service circle for
Applicants trademark is different from other marks, hence the
Applicants trademark is pleased to be considered for the registration
and b). As per Sec.12 of the Trademarks Act, 1999, similar trademarks
can be registered if the Applicant is honest and concurrent user. The
Applicant herein is using the trademark continuously from 24.10.1993.
It implies the trademark Hotel Swagath of plaintiff is registered as a
device and another application No. 2037599 for goods in class-43 of
plaintiff for trademark Swagath, was opposed by one of its partners
Mrs. Anupama which is pending and as such plaintiff can not claim
exclusive rights of the word Swagath. The plaintiff did not approach
the Court with clean hands thereby in not put forth real facts and
otherwise the word Swagath is generic and common word for which
the plaintiff cannot claim monopoly and there is no specific
registration for the word Swagath in favour of plaintiff and there is no
violation of any of the rights of the plaintiff by the defendant under
the Copy Rights Act and the Trademarks Act, much less impairing any
reputation and the goodwill and turnover of plaintiff. Plaintiff also not
established any act of passing off of services by defendant much less
to demonstrate the confusion and deception in the market because of
the use of the trademark Hotel Swagath East Court by the defendant
and the claim of damages is frivolous and the suit claim is only to
trouble the defendant 6 years after the defendant started the business
with that logo, the plaintiff thereby cannot prevent the defendant from
using the logo or the word Swagath therein. The other contention is
plaintiff filed suit against own partner O.S.No.476 of 2016 and another
suit against one Sai Lakshmi for using trademark Swagath and said Sai
Lakshmi filed rectification application before Intellectual Appellate
Board, Chennai, challenging registration of trademark Hotel Swagath
of the plaintiff.
c). The rejoinder of the plaintiff to the counter of defendant is
that Rule 32 of CRP not applicable to the suit filed by partnership firm
represented by partner for the firms business activity concerned for
not a case appointing an agent by the principal with authorization to
permit or recognize. If at all defendant is a partnership firm plaintiff
seek amendment of cause title array. The prior use of a mark always
considered on highest pedestal even those of a registered proprietor
of a mark. There are no any inconsistent pleas much less suppression
of material facts in the claim against the defendant. The partnership
deed of 09.04.1991 to be read with registration certificate dated
26.05.1994 of the firm registration in use of the word Swagath
continuously as prior use. It is wrong to say Swagath is a generic word
and used only to welcome for in fact it is the main keyword of the
plaintiffs trading style and in the trademark which they coined and
invented. Plaintiff came to know of the use in questioning by issuing
notice and otherwise use of the mark by the defendant allegedly since
2010 will not give any right nor take away the right of the plaintiff of
the exclusive user.
6. The Court originally granted ad-interim injunction in
I.A.No.817 of 2016 against the defendant on 09.08.2016.
7. It is from the above material and with reference to the
respective contentions and referring to documents, the trial Court by
the impugned dismissal order in I.A.No.817 of 2016 dated 14.10.2016
observed that as per dictionary Swagatham is not defined. The
defendant also running hotel Swagath Vegetarian since 2010 though
claimed since 2005 and thereby acquired acquiescence and the suit
thus suffered by delay and latches as per Section 33 of the Trademarks
Act. Further as held by our High Court in 2004 in Chennai Hotel
Saravana Bhavan and Bharat Hotels Limited of Delhi High Court supra
where a Trader adopts dictionary words in common user for his trade
name such Trader cannot be allowed to monopolize the common
language words a slight difference between that of plaintiff and
defendants title in the descriptive words in the absence of fraud is a
sufficient distinction apart from customers who patronize such hotels
are well educated and well informed particularly with more literacy
rate in Hyderabad and there shall be no question of confusion among
customer and clientele. The elements of passing off action are
reputation of goods, possibility of deception, and likelihood of
damage to the plaintiff and the same principle applies to trademark
and tradename. In action for passing off on the basis of unregistered
trademark generally in deciding on descriptive similarity the factors to
consider are - nature of the mark as to word mark or label mark or its
composition, degree of reasonableness between the marks,
phonetically similar and similar in idea, nature of goods in respect of
which they are in use as trademarks, similarity in nature, character
and performance of goods of rival traders, class of purchasers likely to
buy the goods bearing the marks and their intelligence, degree of care
in such purchase for use, mode of purchasing and placing orders for
such goods or services and other relevant surrounding circumstances
on extent of dissimilarity as held in Lakshmikanth Vs. Patel by Supreme
Court, that was referred by our High Court in Shaik Nazeemuddin Vs.
Mahammad Aslam in CMA No.878 of 2015 also referring to Cadila
Health Care Vs. Cadila Pharmaceauticals. In the plaintiffs firm doing
hotel business under the name and style M/s Hotel Swagath and
defendants firm running with name and style M/s Hotel Swagath East
Court, both are thus distinct to each other with dissimilarities and no
confusion in the mind of customers in their identity and the word
Swagath is generic and thereby there is no infringement and plaintiff
has no prima facie case or balance of convenience nor suffer any
irreparable loss in dismissing the injunction petition vacating the ad-
interim injunction.
8. Said dismissal order impugned in the present appeal with the
grounds urged supra. The learned counsel for the appellant reiterated
the same in the course of hearing. Whereas, counsel for the
respondent supported the order of the lower Court from his
contentions referred supra in the counter. In the course of hearing,
the expression of the three Judge Bench of the Apex Court in Cadilla
Health Care supra of 2001, two Judge Bench of the Apex Court in
Ramdev Food Products Private Limited Vs. Arvindbhai Rambhai Patel
and Others (2006 (7) Supreme 224), Chennai Hotel Saravan Bhavan
supra, Bharat Hotels Limited supra, Division Bench of our High Court
in Trinetra Vs. Mee Trinetra (2011) 4 ALT 692, Rich products Corp. Vs.
Indo Nippon Food Limited (2004) Delhi, Bajaz Auto limited Vs. TVS
Motors, (2009) 9 SCC 797, Shaik Nazeemuddin supra of 2015, Three
Judge Bench of the Apex Court in Skyline Education Institute India Vs.
SL Vaswani (2010) 2 SCC 142, Power Control Appliances Vs. Sumeeth
Appliances (1994) 2 SCC 448, Ultratech Cement Limited Vs. Dalmia
Cement and Bharat Limited (2016) Bombay are drawn attention in
support of the rival claims.
9. In the light of the above, it is now to consider:
i). Whether the impugned dismissal order of the lower Court of
the temporary injunction application of the plaintiff is
unsustainable and requires interference by this court while
sitting in appeal?
ii). To what result?
10. The fact that plaintiff started the unregistered partnership
business in 1991 covered by Ex.P.4 partnership deed dated 09.04.1991
is not in dispute before the lower Court much less in the appeal.
Ex.P.3 refers to certificate of the Chartered Accountant no doubt
dated 21.04.2016 of the turnover of the Hotel Swagath of the plaintiff
at Ameerpet from the financial year 1991-92 till the financial year 2015-
16. It also substantiates the partnership business of plaintiff started in
1991 of the firm with name and the hotel with name. The copy of
partnership deed of 1991 filed for reference is incomplete in the
appeal. Even according to the counter with reference to the
documents before the trial Court supplied it is the firm name Hotel
Swagath particularly counter para-9 and the business name mentioned
in form No.45-B of the Income Tax Act, shows M/s Swagath Vegetarian
Restaurant and the hotel business started in November, 1991 as a
partnership firm mentioning four partners. Even from that, the hotel
business started is with name Swagath that is devised, leave about the
further title to it as Vegetarian restaurant from the documents drawn
attention by the respondent which they placed reliance as Ex.R.1. In
fact, during 1991-92 the commercial tax registration obtained with M/s
Swagath Vegetarian Restaurant supra and renewed again in 1994. The
firm was later registered with the Registrar of Firms covered by Ex.P.7
certificate dated 26.05.1994 as Hotel Swagath, pursuant to which Ex.9
issued of the firm registered as M/s Hotel Swagath supra. The Ex.P.11
showing four partners in the Registrar of Firms dated 19.05.1994 of the
Firm registered as M/s Hotel Swagath supra. The commercial tax fresh
registration obtained with M/s Hotel Swagath supra in 1996-97 as per
Ex.P.8. Ex.P.12 VAT registration also confirms the same besides
Ex.P.13 bunch of bills of Hotel Swagath. From this, though in 1991 firm
started in doing business with name M/s. Swagath Vegetarian
Restaurant, within no time later and at least from 1994 as per the
above the firm is registered and doing business with the name M/s
Hotel Swagath. What the defendant contends is that he is doing
business with the name and style M/s Hotel Swagath East Court from
2010 and earlier started in 2005 as Swagath Hotel Vegetarian.
11. So far as the words Hotel and Vegetarian and Restaurant
respectively concerned, they are the generic terms undisputedly.
Swagath whether generic term or not is the issue. It is not to say
Swagatam, that only to mean welcome in English for the Sanskrit
word. There is a difference between Swagatam and Swagath even
otherwise, apart from the fact that in Swagatam, there is no h after
t but in Swagath used herein since 1991 there is h after the letter
t. From this, coming to the trademark registration of the plaintiff
Ex.P.1 shows the certificate of trademark u/sec.23(2) and Rule 62(1) of
the Trademarks Act, 1991 issued on 29.01.2016, valid till 13.09.2020 as
used since 24.10.1993 and the type of trademark as device (for the
logo with s and h within s in the circles and word mark HOTEL
SWAGATH from the trademark No.2022183, class-43 dated
13.09.2010 J.No.1687 by Registrar of Trademarks, Chennai, shows
the Trademark/representation is annexed hereto has been registered
in the name of Hotel Swagath, ----- Ameerpet. Names of two persons
who are no doubt among the four partners of the firm supra
mentioned in their application for registration and in registration of
the trademark Hotel Swagath, trading as M/s. Hotel Swagath, service
provider, a partnership firm. The annexure of certificate No.1260240
for above trademark Number as referred supra contains the logo like in
round seal by inscription of the letters s and within it h in their
description of the device and it is also with the capital letters
underneath the logo HOTEL SWAGATH. Thus, it is the registration of
the trademark not only for the logo covered by the device but also for
the word mark as Hotel Swagath as referred supra and that also says
the same in use since 1993. In fact, as per the partnership deed it is in
use as referred supra from 1991 though between 1991-1993, it was in
referring as Swagath Vegetarian Restaurant and from 1993-94 as Hotel
Swagath. Thus, if not from 1991, at least from 1993-94 the passing off
rights of the user as Hotel Swagath of the plaintiff cannot be disputed.
Once such is the case, it is to be seen whether there is acquiescence,
from the use by defendant with the word Hotel Swagath East Court
since 2010 and whether it is within the knowledge of the plaintiff all
through. In M/s. Power Control Appliances Vs. Sumeeth Missions supra
of the Apex court in 1994 it was observed that family business of family
members involved with shares and directorship and son of sole
proprietrix of the appellant company is Managing Director of
respondent company in starting marketing of the family product but
subsequently commencing business of manufacturing same product
and suits filed for infringement later it was held mere averments in the
pleadings would not amount implied consent use of trademark by rival
manufacturer not permissible and thereby there is no question of
implied concerned in saying interim injunction to be issued for use of
same trademark. Here it is not that case with reference to the facts
leave about a little change in the facts may even tilt the result and any
such acquiescence really exists or not is a serious disputed issue
ultimately to decide in suit and not to non-suit the temporary
injunction relief sought for therefrom if petitioner otherwise entitled.
Thus, from the above, so far as the registered trademark/wordmark
Hotel Swagath concerned, though Hotel is a generic word, for Swagath
is not prima facie from what is discussed supra, the defendant cannot
use it even by adding the words after Hotel Swagath as East Court-
the generic words.
12. In N.R.Domgiri Vs. Whirlpool Corporation of 1996 the Apex
Court, held that a mark in the form of a word which is not a derivative
of the product, points to the source of the product. The mark/name
`WHIRLPOOL' is associated for long, much prior to the defendants'
application in 1986 with the Whirlpool Corporation-plaintiff. In view of
the prior user of the mark by Plaintiff and its trans-border reputation
extending to India, the trade mark `WHIRLPOOL' gives an indication of
the origin of the goods as emanating from or relating to the Whirlpool
Corporation, Plaintiff. The High Court has recorded its satisfaction
that use of the `WHIRLPOOL' mark by the defendants indicates prima
facie an intention to pass off the defendants' washing machines as
those of the plaintiffs or at least the likelihood of the buyers being
confused or misled into that belief.
13. The same is quoted with approval by the three Judge Bench
of the Apex Court in Skyline supra of 2010, though deferred on facts in
saying internationally the word Skyline for several educational
institutions and the like popularly in use is proved, apart from not
chosen to interfere with the concurrent findings of the Courts below
for not found any perversity from the limited scope to sit against.
Here, there is nothing to show prima facie of the word Swagath is
popularly in use by several business or service activities including for
hotel and hospitality services, but for to establish any such if at all
during trial to consider and same aspect totally ignored by the trial
Court in dismissing the injunction application. In fact, it is the
similarity not the dissimilarity that is criteria. In this regard, Cadila
Health Care Ltd. supra of the 3 Judge Bench of the Apex Court of 2001,
particularly at paras-18 to 20 it is observed that what was observed in
S.M.Dyechem Limited Vs. Cadbery (India Limited) 2000(5) SCC 573 of
comparative strength as to dissimilarities is essential rather than
similarity is held not good law in saying the decision in the last four
decades of the Apex Court clearly laid down that what has to be seen
the case of passing off action is the similarity between the competing
marks and to determine whether there is likelihood of deception or
causing confusion and for that it referred several expressions in
coming to the conclusion that the dissimilarities found be given more
importance than phonetic similarity or similarity in use of the words.
It reiterated the earlier binding expressions of Amruthadharas case
and Durgadatta Sharmas case in saying the use of the defendants
mark is likely to deceive to be make out by the plaintiff in an action
for infringement but where similarity between the marks of both is so
close either visually, phonetically or otherwise the Court reaches the
conclusion that there is an imitation and no further evidence is
required to establish that plaintiffs rights are violated. The products
will be purchased by both villagers and townsfolk, literate as well as
illiterate and question has to be approached from the point of the
view of a man of average intelligence and imperfect recollection and
the purchasers in India cannot be equated with those of England and
the decision in Dyechem did not lay correct law in this regard.
14. Thus, the trial courts observation of the Hyderabadies are
literates is accordingly unsustainable for the hotel business of the both
the States not confined even its location of Hyderabad area to
Hyderabadies only and not for any rurals to attend and avail.
15. From the above, coming to the criteria on deceptive
similarity, doctrine of passing off, acquiescence, the requirements for
grant of temporary injunction and also on scope of interference with
the trial Courts order, in an injunction order by sitting in appeal
concerned, in Ramdev Supra it was held at Para 55 on facts in setting
aside the concurrent findings of dismissal of temporary injunction and
by granting the same by the Apex court that it is one thing to say that
the respondents were permitted to carry on trade, but it would be
another thing to say that they would be entitled to manufacture and
market its products under the name which would be deceptively
similar to that of the registered trade mark of the appellant. At Para
74 it was held further that what is needed by way of cause of action
for filing a suit of infringement of trade mark is use of a deceptively
similar mark which may not be identical for if it nearly resembles that
other mark as to be likely to deceive or cause confusion. At Paras 80
to 82 it was further held on doctrine of passing off is a common law
remedy whereby a person is prevented from trying to wrongfully utilize
the reputation and good will of another by trying to deceive the public
through passing off his goods. Although, defendant may not be using
the actual trade mark of plaintiff, the get up of the defendants goods
may be so much like the plaintiffs that a clear case of passing off
could be proved. At Para 93 it was held further on acquiescence that
in an infringement of trade mark, delay by itself may not be a ground
for refusing to issue injunction as for defence of acquiescence special
knowledge on the part of the plaintiff and prejudice suffered by
defendant is also relevant. It was ultimately at Para 109 to 113
concluded in saying plaintiff is entitled to injunction when prima facie
made out from the above on comparative strength of cases of either
party, with reference to balance of convenience if lies in favour of
plaintiff, there is no need of showing more than loss of good will and
reputation to fulfill the condition of irreparable injury. At Para 116 it
was held that once trial Court granted injunction, appellate Court will
not substitute their discretion unless the trial Courts conclusion is
arbitrary and perversive. No doubt in the above expression of
Ramdev only Dyechem supra referred and not Cadilla supra which
held Dyechem not laid down correct law on the aspect of similarities
rather dissimilarities for considering prima facie case with reference
to that principle also, for in other respects on acquiescence and
irreparable injury what to make out, the decision of Ramdev no way
can be said not good law. From Cadilla supra it is observed that once
the court of first instance exercises its discretion to grant or refuse to
grant relief of temporary injunction based upon objective
consideration of the material placed before the court and is supported
by cogent reasons, the appellate court will be loath to interfere
simply because on a de novo consideration of the matter it is possible
for the appellate court to form a different opinion on the issues of
prima facie case, balance of convenience, irreparable injury and
equity.
16. Here as discussed supra the lower Courts order is contrary
to law and ill-appreciation of the facts and without any objective
consideration of the material on record and prima facie unsustainable
and thereby it is the duty of the Court while sitting in appeal against,
to set aside the same. Further in Satyam Info way Limtied Vs. Sifinet
AIR 2004 SC 3540 that was referred in Saravan Bhavan supra at para-18
also laid down that where there is likelihood of confusion to the public
from there the use of the words Sifi and Siffy of the rival products and
the plaintiff is the prior user plaintiff is entitled to interim injunction.
Even referred Satyam at para-22 of Saravan Bhavan, only Dyechem of
dissimilarity principle followed and even Dyechem overruled in Cadilla
supra, Cadilla not even cited. Even in Bharat Hotels supra, the issue
is use of the words the grand/grand and Grand Hyatt. It was observed
that the word Grand is an essential and prominent and uniform feature
in all hotels thereby injunction cannot be granted. Thus, facts of that
case are different to the facts on hand, for the reason Grand is generic
word whereas Swagath is hardly appreciable of a generic word even
the prayer in the plaint speaks on infringement of the registered trade
mark Swagat and registered as device and pointed out what Section
30 of the Act limits and what Section 35 of the Act saves to understand
with reference to Section 17 of the Act. Coming to Trinetra supra, it is
also observed at para-45 that a person trading with a particular mark
is entitled to insist that no one else should use that mark for trading in
the same or similar commodity. If there is any infringement of the
mark used by the other of deceptively similar to his mark in nearly
resembles his mark that is likely deceive or cause confusion he is
undoubtedly ask the Court to restrain the other to trade with such
deceptively similar mark. Here, no doubt only similarities aspect
considered of Dyechem and not even dissimilarities aspect laid down
in Cadilla later by overruling Dyechem. Coming to Rich Products Corp.
supra of Delhi High Court of 2004 and the rival products of similar use
of words Whip Topping both generic and descriptive of products the
words have not acquired a secondary meaning by saying the issues
have to be determined on merits and delay in laches taken
consideration in holding acquiescence of the claim. In Bajaj Auto
supra by referring to earlier expression in 2009 in Sri Vardhaman rice
and Jungle mills case observed without going into merits of
controversy in matters relating to trademarks, copyrights and patents
should be finally decided very expediently in the trial Court instead
merely granting or refusing to grant injunction rather keep the matters
for years together without finality in directing the courts to follow by
disposal of the appeal.
17. Having regard to the above and in the result, the appeal is
allowed by setting aside the dismissal order dt.14.10.2016 in I.A.No.817
of 2016 on the file of the IX Addl.Chief Judge, City Civil Court,
Hyderabad, and by restoring the ad-interim injunction order passed
pending disposal of the suit by directing the trial Court to dispose of
the suit on merits within six(6) months from the date of receipt of the
order. This order comes into force after 30 days from this day and
suspended meantime to enable the respondent to approach Superior
Court to invoke any available remedy to impugn it. Consequently,
miscellaneous petitions pending if any, shall stand closed.
___________________________
JUSTICE Dr. B.SIVA SANKARA RAO
Date: 28.11.2017
C.M.A.No.27 of 2017
28-11-2017
M/s Hotel Swagath Appellant/Plaintiff
M/s Hotel Swagath East Court .Respondent/Defendant
Counsel for the appellant:Sri K. Mohan Kumar
Counsel for the respondent :Sri Venkat Reddy Douthi Reddy
<GIST:
>HEAD NOTE:
? Cases referred
1.(1946) 63 RPC 39 HL
2.(2004) 28 PTC 404 (Delhi)
3.(1970) RPC 238
HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO
CIVIL MISCELLANEOUS APPEAL No.27 of 2017
ORDER:
The appellant-M/s Hotel Swagath (registered partnership firm)
is plaintiff in O.S.475 of 2016 on the file of the IX Addl.Cheif Judge, City
Civil Court, filed for the relief of permanent injunction restraining
defendant-M/s Hotel Swagath East Court(represented by V.Narasimha
Reddy) and his men, his successorsin-interest and others claiming
under him from infringing the plaintiffs exclusive statutory right to the
registered trademark Swagath and common law right to the trade
name/trademark/service mark of the plaintiff and from passing off his
business under the impugned trade name consisting of Swagath with
or without any laudatory epithet or generic or descriptive expressions
as its prefix or suffix depicted in any form or in any language, which is
identical or similar or deceptively similar, either visually, phonetically
or structurally to the plaintiffs registered
tradename/trademark/service mark, Swagath as the business of the
plaintiff.
2. During pendency of the suit, the plaintiff filed I.A.No.817 of
2016 U/O.XXXIX Rules 1 and 2 r/w Sec.151 CPC for grant of interim
injunction against the defendant. After contest, the trial Court
dismissed the petition by order dt.14.10.2016.
3. Impugning said order, the plaintiff preferred the present
appeal with grounds in memorandum of appeal that the lower court
failed to appreciate or understand either the facts of the case or the
provisions of the Trademarks Act, 1999 or the principles laid down in
common law relating to trademarks under which the suit is filed or the
case law relating to the subject matter of the suit. The lower Court
failed to appreciate that the appellant is the registered user of the
trademark (label) under No.20222183 and should have recorded its
specific finding on the question of infringement. The lower Court
failed to appreciate the difference between the rights conferred by
virtue of registration of the trademark under Section 28 of the Act and
the rights acquired by common law by use of the mark prior in point of
time. The lower Court erred in not recording its specific findings on
the questions relating to infringement and passing off actions as
required by law. The lower Court erred in ignoring the age old
principle relating to passing off action under the Trademarks Law that
similarity between the competing marks is to be taken into
consideration while determining the likelihood of deception and
confusion which is being followed by various Courts of the country
including the Apex Court. The lower Court erred in taking into
consideration the dissimilarity between the competing marks while
determining the likelihood of deception and confusion and coming to
the conclusion that there is no likelihood of deception and confusion.
The lower Court erred in holding that a slight difference between the
plaintiffs and the defendants trading style is a sufficient distinction
by blindly following the extract of a part of the decision in Office
Cleaning Services Ltd. Vs. Westminister Window and General Cleaners
Ltd. borrowed from Bharat Hotels Limited Vs. Unison Hotels Limited
without having the full text of the decision of House of Lords to
appreciate the circumstances under which the said finding was arrived
at by the House of Lords. The lower Court also erred in applying the
dictum in the decision of the House of Lords in Office Cleaning
Services Ltd. Supra that a slight difference between the descriptive
words, services and association occurring at the end of the
respective services of the plaintiff and the defendant would be
sufficient to distinguish their services in the absence of fraud, to the
present case where the trading styles of both the parties consist of the
fancy word Swagath as prefix part, which is not a descriptive word.
The lower Court has failed to appreciate the decision in Effluent
Disposals Ltd., Vs. Midlands Effluent Disposal Ltd. that the dictum
small differences may suffice in cases concerned with the descriptive
names in Office Cleaning Services Ltd. supra does not apply to the
case before them where the addition of MIDLANDS as prefix to an
otherwise identical name amounted to no distinction at all aptly
applies to the present case where the common words, Hotel
Swagath, East Court are added in an insignificant way as suffix to an
otherwise identical trading style of the plaintiff. The lower Court also
failed to appreciate the difference between fancy, generic or
descriptive and common words. The lower Court also failed to
appreciate that while the fancy word like Swagath indicates a single
source, the generic or descriptive words like, hotel, restaurant
etc., indicate the nature of services/goods and the common words are
the words which have been in use and became publici juris. The lower
Court failed to appreciate that the consumers/customers always
remember and identify the services/ goods with the distinctive word
SWAGATH, which appears predominantly in the appellants trading
style and not by the last common words like, East Court occurring in
the trading style of the respondent and that there is every likelihood of
confusion or deception being caused in the minds of the consuming
public. It is not out of place to submit that the word Swagath which
is recollected by the consumers and not the other descriptive
expressions contained in the trading styles of the rival parties and
therefore the goodwill and reputation revolves around the word
Swagath. The lower Court failed to appreciate that the case of the
plaintiff is that the reputation is attached to the tradename/
trademark can neither be regained nor compensated in terms of
money, if lost, and has erroneously held that the appellant has not
produced any material to show that their business has been adversely
affected by the use of the expression, Hotel Swagat East Court by the
respondent. It is not out of place to submit that the courts including
Apex Court on several occasions granted injunctions in passing off
cases, when there is likelihood of creating confusion or deception in
the minds of the consumers. The lower Court failed to appreciate that
the trading style of the plaintiff containing the prefix fancy word
Swagath is inherently distinctive entitling them to the grant of
injunction when the defendant fraudulently adopted the prefix
identical fancy word in conjunction with descriptive or common words
East Court for identical business. The lower Court erred in holding
that if the respondent/defendants business is stopped the irreparable
loss cannot be compensated whereas the petitioner/plaintiff can be
compensated for the damages prayed in the suit, ignoring the fact that
the damage caused to the hard earned goodwill and reputation can
neither be restored nor be compensated in terms of money. The lower
Court erred in applying the irrelevant decisions without appreciating
the distinction between the facts in those cases and the facts in the
present case and also in considering the documents marked as Exs.P.1
to P.3,P.7 and P.13. Hence, to set aside the order impugned herein of
the lower Court.
4. Heard both sides and perused the material on record.
5. The factual background, in deciding the appeal lis while
sitting against the impugned dismissal order of the temporary
injunction application pending disposal of the suit for permanent
injunction with regard to the registered trademark and since earlier of
the passing off rights, is that:
a) The case of the plaintiff is that it is one of the largest,
renowned and reputed business houses rendering the services of hotels
snack bars food catering and restaurants under the tradename/
trademark/servicemark, Swagath, preceded by the generic or
descriptive expression Hotel and they have been continuously
rendering the services bearing the service name in various parts of the
erstwhile composite state of Andhra Pradesh from 1991 and also after
its bifurcation in both the States of Andhra Pradesh and Telangana,
that plaintiffs partnership firm was though registered bearing No.04483
of 1994, dt.26.05.1994, the partnership firm was constituted with effect
from 09.04.1991 in continuously, extensively and openly rendering the
hotel services under the name and the style of Swagat(vegetarian
restaurant) till it was registered and continue to provide said services
by the registered firm as Hotel Swagath with the Registrar of Firms and
wherein Swagath being the key word and main feature in identifying
and recognizing their services known as Swagath among the public in
general and the customers who patronize their services in particular.
In 1993, the plaintiff created an artistic logo consisting of the letters
H and S being the acronym of the tradename Hotel Swagath and
they being the originators of the artistic work in the logo enjoy the
copyright therein and applied for registration of the composite label
consisting of the letters H and S and the expression Hotel Swagath
under the trademarks Act, 1999 and obtained its registration under
No.2022183 in class-43 in respect of the services providing food and
drinks, catering, hotels, restaurants and snackbars; accommodation
bureaux(hotels), rental of temporary accommodation, canteens,
barservices, holiday camp services(lodging). They also sought
registration of the mark Swagath word per se under No.2037599,
class-43 in respect of the same description of services as aforesaid
mention. While so, also was granted SWAGATH marriage and Function
Hall in 2003 a partnership firm and Dhanturi group of hotels private
limited to render hotel services under the name and style consisting of
Swagath as a key word of main feature thereof with liberty to add
any further suffix in the twin cities of Hyderabad and Secunderabad,
the first license started service under the name and style of hotel
Swagath Grand at A.S.Rao nagar, Malkajgiri and Suchitra Swagath
Grand Conventional Hall, at Jillellaguda and Swagath marriage and
function hall at Ameerpet, the second licensee started hotel service
under the name and style of hotel Swagath at Kukatpally, Swagath
residency at K.P.H.B. and hotel Swagath grand at Nagole. In all 9
hotels consisting of SWAGATH of the main feature or key word thereof
are existing under the plaintiffs control and supervision in the twin
cities of Hyderabad and Secunderabad. By virtue of origination of the
artistic logo and its registration as part of the composite label
consisting of the expression Swagath and continuous user of the
expression Swagath in relation to the services rendered by them
from 1991 they enjoy right thereof to the exclusion of the others under
the Trademark Act, 1999 and Copyright Act, 1957 and are entitled to
restrain others from rendering similar service by using any artistic logo
or expression Swagath which is identical with, same or similar or
deceptively similar to the artistic logo or the expression Swagath
with or without the logo or any other prefix or suffix. They came to
know that the respondent started rendering identical descriptive
services under the tradename/
trademark/servicemark Hotel Swagath East Court, the prefix part of
Swagath, viz; Hotel is generic or descriptive and suffix part of
Swagath, viz; East Court being laudatory epithets which is identical
and similar with the main feature or key word of their
tradename/trademark/
servicemark, Hotel Swagath got issued a cease and desist notice
bearing No.TMC.L:7765:2016/17,dt.15.04.2016 through their advocates
Rao and Rao Secunderabad and though respondent received it on
25.04.2016, did not give reply. Respondent is not prior user of the
tradename/
trademark/servicemark Hotel Swagath, its main feature or keyword
being Swagath. Under passing off action law, the rights of prior user
being superior placed on higher pedestal against the subsequent user
of the mark. The malafide intention of the respondent in adopting
identical tradename/trademark/servicemark and similar service is
nothing but to pass off his business/service as their business/service
and to make easy gain at the cost of reputation and goodwill built
over it at a heavy cost of plaintiff which cannot be compensated in
terms of money of such invasion of this property right and thereby
respondent should not be allowed to usurp such rights of plaintiff in
reaping without sowing being not entitled apart from the statutory
right the plaintiff got over Swagath to prevent the respondent of such
user by infringement and thus entitled to the suit relief and pending
disposal for the temporary injunction as the available relief to invoke,
from the prima facie case, balance of convenience and irreparable
injury otherwise being caused.
b) The case of the defendant is that the suit claim is false with
unclean hands by suppression of material facts, plaintiff is not
competent to file the suit, the word Swagath per se is not registered
on the name of the plaintiff, in the plaintiff firm with four partners as
per the firm registration and income tax form 45-D and no
authorization by other partners by D.Ravinder filed with plaint much
less with leave of the Court under Rule 32 of the CRP and there is no
cause of action to the suit claim which is also barred by non-joinder
and mis-joinder of parties. The defendant is running hotel business
with name and style Hotel Swagath East Court since 2010 without any
interference and it was originally coined as Swagath Hotel Vegetarian
in the year 2005 and thereby running in use of the word Swagath of
the Hotel name at Santoshnagar, even to the knowledge of plaintiff
and the operation of the defendant extended in 2010 at Kharmanghat
road. The defendant coined the word Swagath bonafide and honestly
to mean welcome so it is a generic and common word for services
rendered in hotel and hospitality business and there are several hotels
in and around Hyderabad with similar name Swagath and no one can
monopolize the word Swagath, even plaintiff is running the hotel
business in rendering services under the name and the style Hotel
Swagath since 1994. The user status mentioned in the plaintiffs
trademark application is since 24.10.1993 and the firm registered later
is on the name Hotel SWAGATH on 26.05.1994 and the partnership
deed, dt.09.04.1991 indicates the firm name as Swagath Vegetarian
Restaurant and there are conflicting statements with regard to the
user status thereby. The trademark application of plaintiff No.2022183
for registration of Hotel Swagath as a devise, is filed on the name of
two partners Danturi Harishankar and Ravinder contrary to the
mention of more names in the partnership deed. It is false to state
that SWAGATH is the keyword in the composite trademark Hotel
Swagath, for the trademark is to be considered as a whole and not be
dissected including for infringement of passing off and plaintiff cannot
pickup the word Swagath from the composite trade mark to claim
monopoly over the word Swagath. The plaintiffs trademark Hotel
Swagath consists of letters S and H in the circle along with the word
Hotel and Swagath and as per Section 17 of the Trademark Act,1991
plaintiff can only claim rights for the composite trademark consisting
of the words hotel Swagath and logo consisting S and H and
trademark registration certificate on application No.2022183 clearly
indicate that conditional order was passed allowing the trademark
Hotel Swagath restricted for States of AP and Telangana. Said
trademark is registered as associated trademark along with trademark
application 443819 and Registrar of Trademarks initially objected for
registration of trademark Hotel Swagath for the goods in clause-43 of
Section 11 of the Act. Similar trademarks are in progress of
registration on the name of the different entities and the plaintiff
replied to the objection of Registrar saying - a) The Applicants
trademark is for the registration of trademark Hotel Swagath as a
device. Whereas, the marks reflected in the Search Report are word
marks and also channel of distribution and service circle for
Applicants trademark is different from other marks, hence the
Applicants trademark is pleased to be considered for the registration
and b). As per Sec.12 of the Trademarks Act, 1999, similar trademarks
can be registered if the Applicant is honest and concurrent user. The
Applicant herein is using the trademark continuously from 24.10.1993.
It implies the trademark Hotel Swagath of plaintiff is registered as a
device and another application No. 2037599 for goods in class-43 of
plaintiff for trademark Swagath, was opposed by one of its partners
Mrs. Anupama which is pending and as such plaintiff can not claim
exclusive rights of the word Swagath. The plaintiff did not approach
the Court with clean hands thereby in not put forth real facts and
otherwise the word Swagath is generic and common word for which
the plaintiff cannot claim monopoly and there is no specific
registration for the word Swagath in favour of plaintiff and there is no
violation of any of the rights of the plaintiff by the defendant under
the Copy Rights Act and the Trademarks Act, much less impairing any
reputation and the goodwill and turnover of plaintiff. Plaintiff also not
established any act of passing off of services by defendant much less
to demonstrate the confusion and deception in the market because of
the use of the trademark Hotel Swagath East Court by the defendant
and the claim of damages is frivolous and the suit claim is only to
trouble the defendant 6 years after the defendant started the business
with that logo, the plaintiff thereby cannot prevent the defendant from
using the logo or the word Swagath therein. The other contention is
plaintiff filed suit against own partner O.S.No.476 of 2016 and another
suit against one Sai Lakshmi for using trademark Swagath and said Sai
Lakshmi filed rectification application before Intellectual Appellate
Board, Chennai, challenging registration of trademark Hotel Swagath
of the plaintiff.
c). The rejoinder of the plaintiff to the counter of defendant is
that Rule 32 of CRP not applicable to the suit filed by partnership firm
represented by partner for the firms business activity concerned for
not a case appointing an agent by the principal with authorization to
permit or recognize. If at all defendant is a partnership firm plaintiff
seek amendment of cause title array. The prior use of a mark always
considered on highest pedestal even those of a registered proprietor
of a mark. There are no any inconsistent pleas much less suppression
of material facts in the claim against the defendant. The partnership
deed of 09.04.1991 to be read with registration certificate dated
26.05.1994 of the firm registration in use of the word Swagath
continuously as prior use. It is wrong to say Swagath is a generic word
and used only to welcome for in fact it is the main keyword of the
plaintiffs trading style and in the trademark which they coined and
invented. Plaintiff came to know of the use in questioning by issuing
notice and otherwise use of the mark by the defendant allegedly since
2010 will not give any right nor take away the right of the plaintiff of
the exclusive user.
6. The Court originally granted ad-interim injunction in
I.A.No.817 of 2016 against the defendant on 09.08.2016.
7. It is from the above material and with reference to the
respective contentions and referring to documents, the trial Court by
the impugned dismissal order in I.A.No.817 of 2016 dated 14.10.2016
observed that as per dictionary Swagatham is not defined. The
defendant also running hotel Swagath Vegetarian since 2010 though
claimed since 2005 and thereby acquired acquiescence and the suit
thus suffered by delay and latches as per Section 33 of the Trademarks
Act. Further as held by our High Court in 2004 in Chennai Hotel
Saravana Bhavan and Bharat Hotels Limited of Delhi High Court supra
where a Trader adopts dictionary words in common user for his trade
name such Trader cannot be allowed to monopolize the common
language words a slight difference between that of plaintiff and
defendants title in the descriptive words in the absence of fraud is a
sufficient distinction apart from customers who patronize such hotels
are well educated and well informed particularly with more literacy
rate in Hyderabad and there shall be no question of confusion among
customer and clientele. The elements of passing off action are
reputation of goods, possibility of deception, and likelihood of
damage to the plaintiff and the same principle applies to trademark
and tradename. In action for passing off on the basis of unregistered
trademark generally in deciding on descriptive similarity the factors to
consider are - nature of the mark as to word mark or label mark or its
composition, degree of reasonableness between the marks,
phonetically similar and similar in idea, nature of goods in respect of
which they are in use as trademarks, similarity in nature, character
and performance of goods of rival traders, class of purchasers likely to
buy the goods bearing the marks and their intelligence, degree of care
in such purchase for use, mode of purchasing and placing orders for
such goods or services and other relevant surrounding circumstances
on extent of dissimilarity as held in Lakshmikanth Vs. Patel by Supreme
Court, that was referred by our High Court in Shaik Nazeemuddin Vs.
Mahammad Aslam in CMA No.878 of 2015 also referring to Cadila
Health Care Vs. Cadila Pharmaceauticals. In the plaintiffs firm doing
hotel business under the name and style M/s Hotel Swagath and
defendants firm running with name and style M/s Hotel Swagath East
Court, both are thus distinct to each other with dissimilarities and no
confusion in the mind of customers in their identity and the word
Swagath is generic and thereby there is no infringement and plaintiff
has no prima facie case or balance of convenience nor suffer any
irreparable loss in dismissing the injunction petition vacating the ad-
interim injunction.
8. Said dismissal order impugned in the present appeal with the
grounds urged supra. The learned counsel for the appellant reiterated
the same in the course of hearing. Whereas, counsel for the
respondent supported the order of the lower Court from his
contentions referred supra in the counter. In the course of hearing,
the expression of the three Judge Bench of the Apex Court in Cadilla
Health Care supra of 2001, two Judge Bench of the Apex Court in
Ramdev Food Products Private Limited Vs. Arvindbhai Rambhai Patel
and Others (2006 (7) Supreme 224), Chennai Hotel Saravan Bhavan
supra, Bharat Hotels Limited supra, Division Bench of our High Court
in Trinetra Vs. Mee Trinetra (2011) 4 ALT 692, Rich products Corp. Vs.
Indo Nippon Food Limited (2004) Delhi, Bajaz Auto limited Vs. TVS
Motors, (2009) 9 SCC 797, Shaik Nazeemuddin supra of 2015, Three
Judge Bench of the Apex Court in Skyline Education Institute India Vs.
SL Vaswani (2010) 2 SCC 142, Power Control Appliances Vs. Sumeeth
Appliances (1994) 2 SCC 448, Ultratech Cement Limited Vs. Dalmia
Cement and Bharat Limited (2016) Bombay are drawn attention in
support of the rival claims.
9. In the light of the above, it is now to consider:
i). Whether the impugned dismissal order of the lower Court of
the temporary injunction application of the plaintiff is
unsustainable and requires interference by this court while
sitting in appeal?
ii). To what result?
10. The fact that plaintiff started the unregistered partnership
business in 1991 covered by Ex.P.4 partnership deed dated 09.04.1991
is not in dispute before the lower Court much less in the appeal.
Ex.P.3 refers to certificate of the Chartered Accountant no doubt
dated 21.04.2016 of the turnover of the Hotel Swagath of the plaintiff
at Ameerpet from the financial year 1991-92 till the financial year 2015-
16. It also substantiates the partnership business of plaintiff started in
1991 of the firm with name and the hotel with name. The copy of
partnership deed of 1991 filed for reference is incomplete in the
appeal. Even according to the counter with reference to the
documents before the trial Court supplied it is the firm name Hotel
Swagath particularly counter para-9 and the business name mentioned
in form No.45-B of the Income Tax Act, shows M/s Swagath Vegetarian
Restaurant and the hotel business started in November, 1991 as a
partnership firm mentioning four partners. Even from that, the hotel
business started is with name Swagath that is devised, leave about the
further title to it as Vegetarian restaurant from the documents drawn
attention by the respondent which they placed reliance as Ex.R.1. In
fact, during 1991-92 the commercial tax registration obtained with M/s
Swagath Vegetarian Restaurant supra and renewed again in 1994. The
firm was later registered with the Registrar of Firms covered by Ex.P.7
certificate dated 26.05.1994 as Hotel Swagath, pursuant to which Ex.9
issued of the firm registered as M/s Hotel Swagath supra. The Ex.P.11
showing four partners in the Registrar of Firms dated 19.05.1994 of the
Firm registered as M/s Hotel Swagath supra. The commercial tax fresh
registration obtained with M/s Hotel Swagath supra in 1996-97 as per
Ex.P.8. Ex.P.12 VAT registration also confirms the same besides
Ex.P.13 bunch of bills of Hotel Swagath. From this, though in 1991 firm
started in doing business with name M/s. Swagath Vegetarian
Restaurant, within no time later and at least from 1994 as per the
above the firm is registered and doing business with the name M/s
Hotel Swagath. What the defendant contends is that he is doing
business with the name and style M/s Hotel Swagath East Court from
2010 and earlier started in 2005 as Swagath Hotel Vegetarian.
11. So far as the words Hotel and Vegetarian and Restaurant
respectively concerned, they are the generic terms undisputedly.
Swagath whether generic term or not is the issue. It is not to say
Swagatam, that only to mean welcome in English for the Sanskrit
word. There is a difference between Swagatam and Swagath even
otherwise, apart from the fact that in Swagatam, there is no h after
t but in Swagath used herein since 1991 there is h after the letter
t. From this, coming to the trademark registration of the plaintiff
Ex.P.1 shows the certificate of trademark u/sec.23(2) and Rule 62(1) of
the Trademarks Act, 1991 issued on 29.01.2016, valid till 13.09.2020 as
used since 24.10.1993 and the type of trademark as device (for the
logo with s and h within s in the circles and word mark HOTEL
SWAGATH from the trademark No.2022183, class-43 dated
13.09.2010 J.No.1687 by Registrar of Trademarks, Chennai, shows
the Trademark/representation is annexed hereto has been registered
in the name of Hotel Swagath, ----- Ameerpet. Names of two persons
who are no doubt among the four partners of the firm supra
mentioned in their application for registration and in registration of
the trademark Hotel Swagath, trading as M/s. Hotel Swagath, service
provider, a partnership firm. The annexure of certificate No.1260240
for above trademark Number as referred supra contains the logo like in
round seal by inscription of the letters s and within it h in their
description of the device and it is also with the capital letters
underneath the logo HOTEL SWAGATH. Thus, it is the registration of
the trademark not only for the logo covered by the device but also for
the word mark as Hotel Swagath as referred supra and that also says
the same in use since 1993. In fact, as per the partnership deed it is in
use as referred supra from 1991 though between 1991-1993, it was in
referring as Swagath Vegetarian Restaurant and from 1993-94 as Hotel
Swagath. Thus, if not from 1991, at least from 1993-94 the passing off
rights of the user as Hotel Swagath of the plaintiff cannot be disputed.
Once such is the case, it is to be seen whether there is acquiescence,
from the use by defendant with the word Hotel Swagath East Court
since 2010 and whether it is within the knowledge of the plaintiff all
through. In M/s. Power Control Appliances Vs. Sumeeth Missions supra
of the Apex court in 1994 it was observed that family business of family
members involved with shares and directorship and son of sole
proprietrix of the appellant company is Managing Director of
respondent company in starting marketing of the family product but
subsequently commencing business of manufacturing same product
and suits filed for infringement later it was held mere averments in the
pleadings would not amount implied consent use of trademark by rival
manufacturer not permissible and thereby there is no question of
implied concerned in saying interim injunction to be issued for use of
same trademark. Here it is not that case with reference to the facts
leave about a little change in the facts may even tilt the result and any
such acquiescence really exists or not is a serious disputed issue
ultimately to decide in suit and not to non-suit the temporary
injunction relief sought for therefrom if petitioner otherwise entitled.
Thus, from the above, so far as the registered trademark/wordmark
Hotel Swagath concerned, though Hotel is a generic word, for Swagath
is not prima facie from what is discussed supra, the defendant cannot
use it even by adding the words after Hotel Swagath as East Court-
the generic words.
12. In N.R.Domgiri Vs. Whirlpool Corporation of 1996 the Apex
Court, held that a mark in the form of a word which is not a derivative
of the product, points to the source of the product. The mark/name
`WHIRLPOOL' is associated for long, much prior to the defendants'
application in 1986 with the Whirlpool Corporation-plaintiff. In view of
the prior user of the mark by Plaintiff and its trans-border reputation
extending to India, the trade mark `WHIRLPOOL' gives an indication of
the origin of the goods as emanating from or relating to the Whirlpool
Corporation, Plaintiff. The High Court has recorded its satisfaction
that use of the `WHIRLPOOL' mark by the defendants indicates prima
facie an intention to pass off the defendants' washing machines as
those of the plaintiffs or at least the likelihood of the buyers being
confused or misled into that belief.
13. The same is quoted with approval by the three Judge Bench
of the Apex Court in Skyline supra of 2010, though deferred on facts in
saying internationally the word Skyline for several educational
institutions and the like popularly in use is proved, apart from not
chosen to interfere with the concurrent findings of the Courts below
for not found any perversity from the limited scope to sit against.
Here, there is nothing to show prima facie of the word Swagath is
popularly in use by several business or service activities including for
hotel and hospitality services, but for to establish any such if at all
during trial to consider and same aspect totally ignored by the trial
Court in dismissing the injunction application. In fact, it is the
similarity not the dissimilarity that is criteria. In this regard, Cadila
Health Care Ltd. supra of the 3 Judge Bench of the Apex Court of 2001,
particularly at paras-18 to 20 it is observed that what was observed in
S.M.Dyechem Limited Vs. Cadbery (India Limited) 2000(5) SCC 573 of
comparative strength as to dissimilarities is essential rather than
similarity is held not good law in saying the decision in the last four
decades of the Apex Court clearly laid down that what has to be seen
the case of passing off action is the similarity between the competing
marks and to determine whether there is likelihood of deception or
causing confusion and for that it referred several expressions in
coming to the conclusion that the dissimilarities found be given more
importance than phonetic similarity or similarity in use of the words.
It reiterated the earlier binding expressions of Amruthadharas case
and Durgadatta Sharmas case in saying the use of the defendants
mark is likely to deceive to be make out by the plaintiff in an action
for infringement but where similarity between the marks of both is so
close either visually, phonetically or otherwise the Court reaches the
conclusion that there is an imitation and no further evidence is
required to establish that plaintiffs rights are violated. The products
will be purchased by both villagers and townsfolk, literate as well as
illiterate and question has to be approached from the point of the
view of a man of average intelligence and imperfect recollection and
the purchasers in India cannot be equated with those of England and
the decision in Dyechem did not lay correct law in this regard.
14. Thus, the trial courts observation of the Hyderabadies are
literates is accordingly unsustainable for the hotel business of the both
the States not confined even its location of Hyderabad area to
Hyderabadies only and not for any rurals to attend and avail.
15. From the above, coming to the criteria on deceptive
similarity, doctrine of passing off, acquiescence, the requirements for
grant of temporary injunction and also on scope of interference with
the trial Courts order, in an injunction order by sitting in appeal
concerned, in Ramdev Supra it was held at Para 55 on facts in setting
aside the concurrent findings of dismissal of temporary injunction and
by granting the same by the Apex court that it is one thing to say that
the respondents were permitted to carry on trade, but it would be
another thing to say that they would be entitled to manufacture and
market its products under the name which would be deceptively
similar to that of the registered trade mark of the appellant. At Para
74 it was held further that what is needed by way of cause of action
for filing a suit of infringement of trade mark is use of a deceptively
similar mark which may not be identical for if it nearly resembles that
other mark as to be likely to deceive or cause confusion. At Paras 80
to 82 it was further held on doctrine of passing off is a common law
remedy whereby a person is prevented from trying to wrongfully utilize
the reputation and good will of another by trying to deceive the public
through passing off his goods. Although, defendant may not be using
the actual trade mark of plaintiff, the get up of the defendants goods
may be so much like the plaintiffs that a clear case of passing off
could be proved. At Para 93 it was held further on acquiescence that
in an infringement of trade mark, delay by itself may not be a ground
for refusing to issue injunction as for defence of acquiescence special
knowledge on the part of the plaintiff and prejudice suffered by
defendant is also relevant. It was ultimately at Para 109 to 113
concluded in saying plaintiff is entitled to injunction when prima facie
made out from the above on comparative strength of cases of either
party, with reference to balance of convenience if lies in favour of
plaintiff, there is no need of showing more than loss of good will and
reputation to fulfill the condition of irreparable injury. At Para 116 it
was held that once trial Court granted injunction, appellate Court will
not substitute their discretion unless the trial Courts conclusion is
arbitrary and perversive. No doubt in the above expression of
Ramdev only Dyechem supra referred and not Cadilla supra which
held Dyechem not laid down correct law on the aspect of similarities
rather dissimilarities for considering prima facie case with reference
to that principle also, for in other respects on acquiescence and
irreparable injury what to make out, the decision of Ramdev no way
can be said not good law. From Cadilla supra it is observed that once
the court of first instance exercises its discretion to grant or refuse to
grant relief of temporary injunction based upon objective
consideration of the material placed before the court and is supported
by cogent reasons, the appellate court will be loath to interfere
simply because on a de novo consideration of the matter it is possible
for the appellate court to form a different opinion on the issues of
prima facie case, balance of convenience, irreparable injury and
equity.
16. Here as discussed supra the lower Courts order is contrary
to law and ill-appreciation of the facts and without any objective
consideration of the material on record and prima facie unsustainable
and thereby it is the duty of the Court while sitting in appeal against,
to set aside the same. Further in Satyam Info way Limtied Vs. Sifinet
AIR 2004 SC 3540 that was referred in Saravan Bhavan supra at para-18
also laid down that where there is likelihood of confusion to the public
from there the use of the words Sifi and Siffy of the rival products and
the plaintiff is the prior user plaintiff is entitled to interim injunction.
Even referred Satyam at para-22 of Saravan Bhavan, only Dyechem of
dissimilarity principle followed and even Dyechem overruled in Cadilla
supra, Cadilla not even cited. Even in Bharat Hotels supra, the issue
is use of the words the grand/grand and Grand Hyatt. It was observed
that the word Grand is an essential and prominent and uniform feature
in all hotels thereby injunction cannot be granted. Thus, facts of that
case are different to the facts on hand, for the reason Grand is generic
word whereas Swagath is hardly appreciable of a generic word even
the prayer in the plaint speaks on infringement of the registered trade
mark Swagat and registered as device and pointed out what Section
30 of the Act limits and what Section 35 of the Act saves to understand
with reference to Section 17 of the Act. Coming to Trinetra supra, it is
also observed at para-45 that a person trading with a particular mark
is entitled to insist that no one else should use that mark for trading in
the same or similar commodity. If there is any infringement of the
mark used by the other of deceptively similar to his mark in nearly
resembles his mark that is likely deceive or cause confusion he is
undoubtedly ask the Court to restrain the other to trade with such
deceptively similar mark. Here, no doubt only similarities aspect
considered of Dyechem and not even dissimilarities aspect laid down
in Cadilla later by overruling Dyechem. Coming to Rich Products Corp.
supra of Delhi High Court of 2004 and the rival products of similar use
of words Whip Topping both generic and descriptive of products the
words have not acquired a secondary meaning by saying the issues
have to be determined on merits and delay in laches taken
consideration in holding acquiescence of the claim. In Bajaj Auto
supra by referring to earlier expression in 2009 in Sri Vardhaman rice
and Jungle mills case observed without going into merits of
controversy in matters relating to trademarks, copyrights and patents
should be finally decided very expediently in the trial Court instead
merely granting or refusing to grant injunction rather keep the matters
for years together without finality in directing the courts to follow by
disposal of the appeal.
17. Having regard to the above and in the result, the appeal is
allowed by setting aside the dismissal order dt.14.10.2016 in I.A.No.817
of 2016 on the file of the IX Addl.Chief Judge, City Civil Court,
Hyderabad, and by restoring the ad-interim injunction order passed
pending disposal of the suit by directing the trial Court to dispose of
the suit on merits within six(6) months from the date of receipt of the
order. This order comes into force after 30 days from this day and
suspended meantime to enable the respondent to approach Superior
Court to invoke any available remedy to impugn it. Consequently,
miscellaneous petitions pending if any, shall stand closed.
___________________________
JUSTICE Dr. B.SIVA SANKARA RAO
Date: 28.11.2017
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