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M/s. Aggarwal Tobacco Manufacturing Co. v/s Santosh Chaurasia

    CS(COMM). No. 126 of 2017
    Decided On, 08 September 2017
    At, High Court of Delhi
    For the Plaintiff: Rajesh Jain, Vishal Patel, Advocates. For the Defendant: Ashok Anand, Advocate.

Judgment Text

IA 2166/2017 (u/O XXXIX R. 1&2 CPC)

1. In a suit filed for permanent injunction restraining infringement of trade mark, passing off goods, rendition of accounts, damages etc. the plaintiff seeks interim stay till the disposal of the suit to restrain the defendant from infringement of trade mark RALLY / AFGHAN RALLY and passing off his goods using trade mark RAILY as that of the plaintiff. The application is contested by the defendant.

2. Plaintiff's claim is that he is running proprietorship firm under the name and style of M/s. Aggarwal Tobacco Manufacturing Company and is engaged in the business of manufacturing, marketing and selling of chewing tobacco, smoking tobacco, bidi, cigarette etc. as included in class-34 of the Trade Marks Act, 1999 since 2012. The plaintiff conceived and adopted the trademark RALLY in relation to its business in 2012 and filed an application bearing No.2467077 for registration of trade mark claiming user since 01.04.2012. He has also filed an application bearing No. 3408400 for registration of trade mark Afghan Rally under class-34. Both are pending registration.

3. It is averred that the plaintiff is the registered proprietor of the lettering style, lay out, colour combination, patterns, etc. of the trade mark RALLY; he has filed applications for registration of the copyright vide registration bearing No.A-107822/2013 and A- 111865/2014. Plaintiff further claims that he is the prior user of the mark Rally / Afghan Rally And is openly using it since the date of its adoption continuously and extensively without any objection. The goods under the trade mark Rally / Afghan Rally are exclusively associated with the plaintiff and none else; he has the exclusive right to use it in relation to identical, similar or other allied / cognate goods to the exclusion of all others.

4. It is alleged that the defendant proprietor of M/s. Chaurasia Tobacco Company has filed opposition on 30.09.2016 before the Trade Marks Registry against the publication of the plaintiff's trade mark RALLY. He has also filed applications bearing No.3317532 dated 25.07.2016 and 3292810 dated 24.06.2016 for registration of the trade mark RAILY under class-34 claiming user since 01.01.2010. The defendant is not the registered proprietor of the impugned mark RAILY and has adopted identical / deceptively similar trade mark as that of the plaintiff dishonestly.

5. In response, the defendant claims that he has his own trade mark RAILY which is original, conceived and coined by him. The alleged marks Rally / Afghan Rally are not unique, innovative, original or coined term or word. RALLY is an English word from dictionary. The defendant has coined the word RAILY by adding Y to RAIL; it has been adopted by him since 2010. The defendant has its own market and customer base. The products are distinguishable and there is no apprehension of its being misled.

6. During the course of arguments, it was informed that the application filed by the plaintiff before the Trade Marks authorities 3408402 in class-34 for trade mark RALLY has been withdrawn on 15.05.2017.

7. On perusal of the pleadings of the parties and the documents on record, it reveals that prima facie the plaintiff is the prior user of the mark RALLY. The plaintiff has placed on record number of documents showing that the goods were being sold by him under the mark RALLY since 2012. The plaintiff has also filed on record excise registration mandatory for marketing tobacco products.

8. The defendant has not produced on record any document whatsoever to prima facie to infer if the mark RAILY is being used by him since 2010 as claimed. All the documents brought on record by the defendant pertain to TIN in the year 2016. It is informed that the defendant might had obtained excise registration in 2016. The defendant has not produced any books of account showing sale of his goods under the mark RAILY since 2010 or any other subsequent date prior to 2016. Needless to say, the plaintiff is the prior user of the mark RALLY.

9. Undisputedly, the plaintiff and defendant both deal in identical/similar goods. The word RALLY that of the plaintiff and RAILY that of the defendant are almost identical / similar and possibility of the customers / users being misled or confused cannot be ruled out. I have also examined the packing material / container being used by the parties to sell their products. The container used by the defendant appears deceptively similar to that of the plaintiff. An attempt seems to have been made that the word RAILY is not easily readable. Most of the features of the container adopted by the defendant appear to have been copied.

10. Well settled position is that prior user of the goods will override the subsequent user, even though subsequent user has a registered trade mark "First in the market test" ['Neon Laboratories Ltd. v. Medical Technologies Ltd. & Ors.', 2016 (2) SCC 672]

11. In 'S. Syed Mohideen v. P.Sulochana Bai' decided on 17.03.2015, 2016 (66) PTC 1 (SC), the Supreme Court held :

"The scheme of the Act is such where rights of prior user are recognized superior than that of the registration and even the registered proprietor cannot disturb interfere with the rights of prior user."

12. In 'Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.', 2004 (28) PTC 566 (SC), it was held :

"An action for passing off, as the phrase "passing off" itself suggests, is to restrain the defendant from passing off its goods or services to the public as that of the plaintiff's. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public. The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant's goods or services are the plaintiff's. The action is normally available to the owner of a distinctive trademark and the person who, if the word or name is an invented one, invents and uses it. If two trade rivals claim to have individually invented the same mark, then the trade who is able to establish prior use will succeed. The question is, as has been aptly put, who gets these first? It is not essential for the plaintiff to prove long user to establish reputation in a passing off action. It would depend upon the volume of sales and extent of advertisement.

The second element that must be established by a plaintiff in a passing off action is misrepresentation by the defendant to the public. The work 'misrepresentation' does not mean that the plaintiff has to prove any mala fide intention on the part of the defendant. What has to be established is the likelihood of confusion in the minds of the public, (the word "public" being understood to mean actual or potential customers or users) that the goods or services offered by the defendant are the goods or the services of the plaintiff. In assessing the likelihood of such confusion, the Courts must allow for the "imperfect recollection of a person of ordinary memory."

The third element of a passing off action is loss or the likelihood of it."

13. Considering the above facts and circumstances, it is a fit case to grant interim relief till the disposal of the suit. Consequently, the defendant is restrained from manufacturing, selling, offering for sale, advertising directly or indirectly dealing in impugned goods included in class-34 bearing the impugned artistic word RAILY or any other artistic work, as may be identical with or

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deceptively or confusingly similar to the plaintiff's artistic work RALLY. The defendant, however, is permitted to dispose of all offending goods bearing the mark RAILY including the packing materials, labels, advertising material etc. within one month. 14. The application stands disposed of in the above terms. 15. Observations in the order shall have no impact on merits of the case. CS(COMM) 126/2017 & IA 2168/17 (u/S 65A & 65B Evidence Act) 1. With the consent of the parties the matter is referred to the Delhi High Court Mediation & Conciliation Centre to explore the possibility of amicable settlement. 2. Parties are directed to appear before the Delhi High Court Mediation & Conciliation Centre on 22nd September, 2017. 3. List the matter before Court on 26th October, 2017.