w w w . L a w y e r S e r v i c e s . i n



M/s. Flowil International Lighting (Holding) B.V. (Netherlands) & Another v/s M/S Digital Gadgets & Others

    CS (OS) No. 1391 of 2010

    Decided On, 14 March 2014

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE RAJIV SAHAI ENDLAW

    For the Plaintiffs: Pratibha M. Singh, Sudeep Chatterjee, Ashwin Kumar, Advocates. For the Defendants: Nitin Bhatia, Rajiv Virmani, Sr. Adv. with Sarojh Nagaraj, Sai Krishna Rajagopal, Sneha Jain, Arjun Ranganathan, Advs. for proposed Mrinal Bharti, Adv. for proposed Abhinav Vashisht, Sr. Advocate with Anuj Malhotra, Gaurav Kothari, Suruchi Rungta for proposed Dr. Saif Mahmood, Advocates.



Judgment Text

IA No.12589/2012 (of the plaintiff u/O1 Rule 10 r/w Order 39 Rules 1&2 CPC).

1. The two plaintiffs instituted the present suit, initially against eight defendants, for permanent injunction restraining infringement of registered trademark ‘SYLVANIA’and for restraining the defendants from passing off their goods as that of the plaintiffs and for the ancillary relief of rendition of accounts, pleading:-

(i) that the plaintiffs possess rights in the trademark ‘SYLVANIA’;

(ii) that the plaintiffs learnt of the defendant no.3 The Hong Kong and Shanghai Banking Corporation Limited (HSBC) offering to its customers a Net Book PC bearing the brand name ‘SYLVANIA’;

(iii) that on enquiry it was learnt that the defendant no.1 Digital Gadgets was offering the said products, claiming itself to be a licensee of defendant no.2 Osram Sylvania Inc.;

(iv) that the defendant no.2 Osram Sylvania Inc. does not have any rights to use the mark ‘SYLVANIA’in any manner whatsoever in any country other than USA, Canada, Mexico and Puerto Rico;

(v) that besides the defendant no.3 HSBC, the defendants no.4 to 7 i.e. M/s India Times. Com, M/s Rediff.com India Limited, M/s TolMol India and M/s Compact International were also offering sale of aforesaid products under the brand ‘SYLVANIA’;

(vi) that the defendant no.1 M/s Digital Gadgets and defendant no.2 Osram Sylvania Inc. were offering for sale their computer Net Books bearing brand name ‘SYLVANIA’ on the websites of defendants no.4 to 7;

(vii) that the defendant no.8 M/s Panam Corporation was importing the said products under the brand ‘SYLVANIA’in India;

(viii) that none of the defendants had any permission, authorization, consent or license from the plaintiffs to use in any manner the mark ‘SYLVANIA’in the territories worldwide including India; only the defendant no.2 Osram Sylvania Inc. has limited right to use / license the mark ‘SYLVANIA’ in USA, Canada, Mexico & Puerto Rico.

2. Vide ad interim order dated 14th July, 2010 in this suit, the defendants no.1&2 were restrained from using the mark ‘SYLVANIA’in any manner whatsoever and the defendants no.3 to 8 were restrained from advertising or promoting the ‘SYLVANIA’ brand particularly for Net Book PCs either through promotional mails or through their websites.

3. Subsequently, the defendants no.9&10 i.e. M/s Siemens Industry Inc. and M/s Osram GmbH were added as defendants to the suit, pleading that they were the principal companies of defendant no.2 Osram Sylvania Inc.

4. Thereafter, on application of plaintiffs, M/s Honda Siel Cars India Ltd. and M/s Honda Motor Co. Ltd. were also added as defendants no.11&12, on the averment of the plaintiffs that were fitting automobile lamps under the brand name ‘SYLVANIA’in the Honda Accord Cars being sold by them.

5. The plaintiffs have filed this application inter alia for impleadment of Amazon.com, Homeshop 18.com, eBay India Private Limited, Naaptol.com and Wespro Digital Pvt. Ltd., pleading that the said proposed defendants are the retail websites accessible in India and the ‘SYLVANIAbranded products can be purchased by Indian customers by logging on to the said websites and that such a sale by the said proposed defendants of ‘SYLVANIA’branded products through their website is impermissible as India is the exclusive territory wherein the plaintiffs are the owners of the mark ‘SYLVANIA’ and none of the said proposed defendants have obtained consent or license or authorization from the plaintiffs to sell ‘SYLVANIAbranded products; with respect to the proposed defendants Wespro Digital Pvt. Ltd., it is stated that the products purchased by the attorneys of the plaintiffs through www.naaptol.com were being sold in India by the said Wespro Digital Pvt. Ltd. The plaintiffs thus contend that the aforesaid proposed defendants are necessary and proper parties to the suit.

6. On 17th July, 2012 notice of this application was issued to the defendants. On 21st September, 2012, notice of the application was also ordered to be issued to the proposed defendants.

7. On 6th March, 2013, the counsel for the proposed defendant Amazon.com contended that the application of the plaintiffs for impleadment of Amazon.com is contrary to the dicta of the Division Bench of this Court in Kapil Wadhwa Vs. Samsung Electronics Co. Ltd. (2013) 53 PTC 112. However, on request of the counsel for the plaintiffs, the hearing was adjourned.

8. Replies have been filed on behalf of the proposed defendants Amazon.com and Naaptol.com to the application. The counsel for the plaintiffs and the counsels for the proposed defendants Homeshop 18.com, eBay India Private Limited, Naaptol.com and Wespro Digital Pvt. Ltd. have been heard on the said application. The counsel for the plaintiffs and the counsel for eBay India Private Limited have also filed written synopsis of their submissions.

9. It is the contention of the counsels for the said proposed defendants that their respective websites merely provide an online platform to enable the vendors to display for sale their respective goods and allow the purchasers of the said goods to make the transaction of sale through the said website/portal. They further argue that they are an 'intermediary' within the meaning of Section 2(w) of the Information Technology Act, 2000 and are under Section 79 of the said Act not liable for any for any third party information posted by them and their liability, as per the Information Technology (Intermediaries Guidelines) Rules 2011 is only to, upon objection being taken, remove the objectionable information and not allow the same to be posted on their respective website/portals in future. It is yet further argued that it is not possible for them to prevent any objectionable information being posted on their websites, in as much as they cannot control the same and are only required to, on receipt of objection, take action within 36 hours. They further contend that upon objection being taken by the plaintiffs to the products bearing mark/name ‘SYLVANIAbeing posted for sale on their respective portals/website, they have immediately, in accordance with law, asked the vendors who had posted the said information to remove the same and the vendors have so removed the information. It is further argued that upon the failure of the vendors to remove the said information, the said proposed defendants, as per clarification dated 18th March, 2013 issued by the Department of Electronics and Information Technology, Government of India, are required to within one months time, remove the information objected. They thus state, that they will abide by the said procedure and having made the said statement, are neither a necessary nor a proper party to the suit. The counsel for proposed defendant Wespro Digital Pvt. Ltd. has also stated that in addition to posting information of the vendors on their portal Naaptol.com, the said Wespro Digital Pvt. Ltd. was also engaged in the business of sale of goods but has upon receipt of objection from the plaintiffs, stopped such sale on its own also and is no longer dealing in the said products.

10. Notwithstanding the aforesaid stand of the counsels for the said proposed defendants, the counsel for the plaintiffs contends that the role of the said proposed defendants is not as an intermediary and they were engaged in effecting sales themselves. It was further argued that the question, whether the said proposed defendants are merely intermediary or were affecting sale of the products infringing the trademark of the plaintiffs themselves, can be decided only after the said proposed defendants are impleaded as defendants and file their written statement.

11. Though arguments were heard long back on 15th May, 2013 and the pronouncement of order thereon went on the back burner, owing to change of Roster and applications from time to time being filed in the suit and though the counsel for the plaintiffs has on subsequent dates also argued that instead of pronouncing orders, arguments be heard afresh along with the arguments of others also sought to be impleaded but my written notes of arguments as well as the written synopsis, have not allowed the matter to become stale and I thus proceed to pronounce order on the arguments heard.

12. I may however record, that on 15th May, 2013, arguments of the senior counsel for the defendant no.5 Rediff.com India Limited were also heard; but since, the defendant no.5 seeks rejection of the plaint qua it, and while reserving order, this distinction was not carved out, it is deemed appropriate to defer orders on the same as of now.

13. The argument of the counsel for the plaintiffs is that since the proposed defendants also, by selling/offering for sale products under the mark ‘SYLVANIA, have infringed the rights of the plaintiffs, they are a necessary and a proper party to the present suit. It is also contended that the statement of the said defendants through their counsels, of having stopped sale of such products and / or to the effect that they will not sell such products in future, though may take care of the relief in so far as sought of permanent injunction, does not take care of the relief also claimed in the plaint, of rendition of accounts and damages.

14. I may notice, that the plaintiffs, during the pendency of this application for impleadment, filed IA No.17623/2012 stating that during the pendency of the proceedings, the plaintiffs and the defendant no.2 Osram Sylvania Inc., defendant no.9 Siemens Industry Inc., defendant no.10 Osram GmbH, defendant no.11 Honda Siel Cars India Ltd., defendant no.12 Honda Motor Co. Ltd. and proposed defendant no.13 Osram Sylvania Products Inc. (now known as Osram Sylvania Inc. i.e. the same as defendant no.2) have arrived at an amicable settlement of all pending disputes and differences subject matter of the suit on the terms contained in the Settlement Agreement dated 14th September, 2012 and in view thereof the plaintiffs withdraw the suit against the said defendants and also waive off their entire claim against the said defendants. The said application was allowed on 21st September, 2012 and the suit of the plaintiffs against the said defendants dismissed as withdrawn.

15. The position which thus emerges is, that the cause of action on which the suit was filed, of the defendant no.2 Osram Sylvania Inc. and its Group Companies Siemens Industry Inc. (defendant no.9), Osram GmbH (defendant no.10) and Osram Sylvania Products Inc. (proposed defendant no.13), in violation of their license agreement which permitted them to use the mark ‘SYLVANIAonly in the countries of USA, Canada, Mexico and Puerto Rico, were on / through the websites of defendants no.4 to 7 and the proposed defendants aforesaid selling the products with the mark ‘SYLVANIAin India, has disappeared.

16. The plaintiffs are however still wanting to flog the suit against the defendants no.4 to 7 and the proposed defendants aforesaid on / through whose portals/website the goods of defendant no.2 Osram Sylvania Inc. with the mark ‘SYLVANIA’were / are being sold. It is not the case of the plaintiffs that any of the defendants no.4 to 7 or the proposed defendants aforesaid are themselves manufacturing the goods with the mark ‘SYLVANIA’. The allegations against the defendants no.4 to 7 and the proposed defendants aforesaid are only of selling or allowing sale of the goods of defendant no.2 Osram Sylvania Inc. with the mark ‘SYLVANIA’.

17. The plaintiffs have not filed the Settlement Agreement signed by them with the defendants against whom the suit has been withdrawn and have claimed confidentiality with respect thereto. The plaintiffs, in IA No.17623/2012 supra have not pleaded that the plaintiffs have received any compensation from the defendant no.2 Osram Sylvania Inc. and its Group Companies Siemens Industry Inc., Osram GmbH and Osram Sylvania Products Inc. who had launched the products bearing the mark ‘SYLVANIA’in India and which were being marketed/sold by / through the websites / portals of defendants no.4 to 7 and the proposed defendants aforesaid. The plaintiffs, after the cause of action on which the suit was filed has disappeared, cannot be permitted to continue the suit and to, after unconditionally withdrawing the suit against the manufacturer of goods with infringing mark, keep the same alive against the defendants no.4 to 7 and the proposed defendants aforesaid who were/are merely selling or allowing the sale, on their respective websites of the said goods.

18. I may further notice that the plaintiffs have since also filed I.A. No.16505/2013 for impleadment of M/s Curtis International Ltd. as a defendant, pleading that M/s Osram Sylvania Inc. has intimated the plaintiffs that it had licenced the said M/s Curtis International Lt

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d. to offer for sale SYLVANIA branded products within its territory of USA, Canada, Mexico and Puerto Rico and not outside the said territory but the said M/s Curtis International Ltd. was illegally getting the products under the mark SYLVANIA manufactured in China and supplying the same to various websites for sale outside the territory of Osram Sylvania Inc. The said application is still pending consideration and thus I refrain from making any observations with respect thereto and have mentioned the same only to complete the picture. It is however not deemed necessary to defer pronouncement of orders on arguments heard prior to filing of IA No.16505/2013, as the subsequent event of filing of IA No.16505/2013 cannot change the factual situation existing on the date of hearing. 19. In this view of the matter, need is not felt to pronounce on the arguments urged and noted above. 20. IA No.12589/2012 thus, in so far as seeks the impleadment of Homeshop 18.Com, eBay India Private Ltd., Naaptol.com and Wespro Digital Pvt. Ltd. is dismissed. The said proposed defendants shall however remain bound by the statements/undertakings of their Advocates as aforesaid recorded. The application for impleadment having been dismissed for reasons aforesaid, it is made clear that the plaintiffs shall be entitled to, if have a separate and distinct cause of action against the said proposed defendants, to institute separate proceedings against them thereon.
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