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Netsweeper Inc., Rep. by its authorised signatory, N. Krishnan, Canada v/s Netsweeper Technologies Private Limited, Chennai & Others

    Civil Suit (Comm.Div) No. 334 of 2018
    Decided On, 08 June 2022
    At, High Court of Judicature at Madras
    By, THE HONOURABLE MR. JUSTICE SENTHILKUMAR RAMAMOORTHY
    For the Plaintiff: Arun C. Mohan, Asstd. by S. Aravindan, M/s. Fox Mandal & Associates, Advocates. For the Defendants: No Appearance.


Judgment Text
(Prayer: Civil Suit is filed under Order VII Rule 1 of the Code of Civil Procedure, 1908 r/w Order 4 Rule 1A of the Original Side Rules and Section 134 (1)(C) of the Trademarks Act, 1999 praying that (a) the Defendant Nos.1 to 6 be ordered and directed jointly or severally to pay to the Plaintiff, a sum of INR 1,00,00,000/- (Indian Rupees one crore only) as damages for passing off its products of software or service as and for the Plaintiff's products or software of services by wrongfully associating themselves with the Plaintiff and / or its affiliates;

(b) Permanent injunction restraining the Defendants, its / their men, servants, agents, successors in business retailers, legal representatives, assigns or any other person claiming through or under them, from in any manner, whatsoever, using or otherwise dealing with the trademark / trade name NETSWEEPER owned by the Plaintiff and / or any identical or deceptively similar trademark / tradename to that of NETSWEEPER in any manner whatsoever;

(c) Permanent injunction restraining the Defendant Nos.1 to 6 its / their men, servants, agents, successors in business retailers, legal representatives, assigns or any other person claiming through or under them, from in any manner, using, selling, licensing, or offering services, advertising or otherwise dealing with the trademark / tradename NETSWEEPER owned by the Plaintiff and / or any identical or deceptively similar trademark / tradename to that of NETSWEEPER and thereby passing off their products or software or programs or services as and for the products or software or services of the Plaintiff in any manner whatsoever;

(d) Permanent injunction restraining the Defendants, its / their men, servants, agents, successors in business retailers, legal representatives, assigns or any other person claiming through or under them, from in any manner or through any other entity, contacting the customers of the Plaintiff for providing services by wrongfully associating themselves with the Plaintiff / or its affiliates;

(e) The Defendants be directed and ordered to surrender to the Plaintiff for destruction, the name boards, invoice / bills, prints, letter beads, business cards, advertising materials and any other materials in the Defendant's possession, which bears the trademark / tradename NETSWEEPER of the Plaintiff.

(f) The Defendant Nos.1, 2 and 3 be directed to pay the outstanding invoice payable to the Plaintiff towards the fee for the software license availed by the first Defendant for the period from April,2017 to December, 2017 vide invoice No.2111 dated 31.12.2017 for a sum of Canadian Dollars (CAD)51753.01 and for the period from January,2018 to March, 2018 vide invoice No.2121 dated 31.03.2018 for a sum of Canadian Dollars (CAD)42604.04, totalling to Canadian Dollars (CAD) 94357.09 together with interest at 18% per annum until the date of payment of the entire amount.

(g) A preliminary decree be passed in favour of the Plaintiff directing the Defendant Nos. 1 to 6 to render account of all revenues whether in liquid form or as assets by diverting the revenues by use of the identical and / deceptively similar trademark / tradename NETSWEEPER and / or passing off and (ii) a final decree be passed in favour of the Plaintiff for the entire amount of revenues including assets purchased out of the revenue thus found to have been made by the Defendant Nos.1 to 6 after the latter have rendered accounts;

(h) The Defendants 1 to 3 be ordered and directed to pay to the Government of India, including but not limited to, a sum of Rs.43,48,631(Rupees Forty Three Lakhs, Forty Eight Thousand, Six hundred and thirty only) with additional interest and penalty towards the service tax debts owed to the Government of India by the first Defendant and for costs of the suit.)

1. The suit was filed for permanent injunctions to restrain the Defendants from infringing the Plaintiff's corporate name 'NETSWEEPER' and from passing off the Defendants' products as that of the Plaintiff's. The Plaintiff has also prayed for damages in a sum of Rs.1,00,00,000/-.

2. In spite of service of summons on all the six Defendants, Defendants 4 to 6 did not enter appearance. Therefore, Defendants 4 to 6 were set ex parte on 26.06.2019. As far as Defendants 1 to 3 are concerned, their right to file written statement was forfeited on 24.08.2020 and they were, subsequently, set ex parte on 10.09.2020. Pursuant thereto, the Plaintiff adduced ex parte evidence through N.Krishnan, an employee of the Plaintiff, who was examined as P.W.1. 31 documents were exhibited as Ex.P1 to Ex.P31 through P.W.1.

3. The Plaintiff states that it is a company incorporated in the year 1999 under the laws of Ontario, Canada, and engaged in the business of Internet content filtering and web threat management. According to the Plaintiff, the trademark 'NETSWEEPER' was registered by the Plaintiff under classes 9 and 42 in Canada and USA in the year 2003 and 2006, respectively. The trade mark was subsequently renewed on 14.02.2017 and 18.11.2016, respectively. Further, the Plaintiff states that it is in the process of applying for registration of the said trade mark in India.

4. The suit was filed after discovering that the 4th Defendant had incorporated a company under the corporate name 'NETSWEEPER' on 13.07.2017 with the same objects as the first Defendant, which previously had a licence to use the corporate name 'NETSWEEPER'. The Plaintiff asserts that the above act amounts to passing off of the Plaintiff's goodwill and reputation. The incorporation certificate, Memorandum and Articles of Association of the Defendants 1 and 4 were exhibited as Exs.P1, P2, P6 and P7 to corroborate the said contention. The Plaintiff has exhibited several communications and invoices to prove that the licence was terminated and regarding the amounts outstanding from the first Defendant to the Plaintiff. The Plaintiff has also exhibited the employment contracts of the 2nd and 3rd Defendants with the Plaintiff as Ex.P4 and Ex.P5 and their respective termination letters as Ex.P19 and Ex.P20.

5. On examining the plaint, proof affidavit and Exs.P9 to P11, the Plaintiff has established that it is the registered proprietor of the Trademark in Canada and USA under classes 9 and 42. Even though it has not registered the trade mark in India, the common law remedy of passing off is available to the Plaintiff under Section 134(1)(c) of the Trademarks Act, 1999. Consequently, the Plaintiff is entitled to succeed as regards prayers (c) to (f), (h) and (j). As the Plaintiff has failed to a

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dduce evidence on the loss of profit incurred because of the incorporation of the 4th Defendant, prayer (a) relating to damages is denied. Since the mark 'NETSWEEPER' is not a registered trade mark in India, prayer (b) is denied. As regards prayer (g), in the absence of accounts from the defendant, the profits and the court fee thereon cannot be ascertained and paid. Therefore, prayer (g) is rejected. 6. Accordingly, Civil Suit (Comm.Div) No.334 of 2018 is decreed in terms of prayers (c) to (f), (h) and (j) of paragraph 22 of the plaint. The Defendants are also directed to pay the Plaintiff a sum of Rs.3,00,000/- (Rupees three lakhs only) as costs, which includes court fees of about Rs.1,59,000/-, lawyer's fees and other costs.
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