$~OS-16 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: CS(COMM) 223/2018. Mr.Ranjan Narula, Adv.

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1 $~OS-16 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: CS(COMM) 223/2018 INTEL CORPORATION Through... Plaintiff Mr.Ranjan Narula, Adv. versus HARPREET SINGH & ORS... Defendant Through Mr.V.N.Koura and Mr.Nikhil Mundeja, Advs. CORAM: HON'BLE MR. JUSTICE JAYANT NATH JAYANT NATH, J. (Oral) IA No.3293/ This application is filed by the defendants under Order VII Rule 11 CPC for rejection of the plaint. The plaintiff has filed the present suit seeking a decree of injunction to restrain the defendants, their directors etc. from using the name Intel Constructions Private Limited as their trade name or using the name/mark INTEL as their trademark, trade name, address, website address etc. Other connected reliefs are also sought. 2. As per the plaint the plaintiff states that it is the world s largest semiconductor chip maker and the plaintiff and its subsidiaries are engaged in the business of developing advanced integrated digital technology platforms for the computing and communication industries. The plaintiff s products include microprocessors chipsets, motherboards, flash memory, wired and wireless connectivity products etc. The details of the plaintiff s CS(COMM) 223/2018 Page 1

2 functioning/operation worldwide have been stated in Para 1 of the plaint. It has been further stated that the mark INTEL/formed part of the corporate name and a mark for its product since 1968, the year it was incorporated. Intel Logo was adopted in In India the plaintiff has formally established its operation in 1988 with opening of its branch in Bangalore. However, products have been exported to India since It is also pleaded that the plaintiff uses its INTEL mark on products beyond computers also. This brand is being used in many consumer electronic products including set-top boxes, media centres, digital audio and video devices and household appliances such as microwave ovens. Other items including products like T- shirts, polo shirts etc. have also been sold with the said brand. Details of the sales, advertisement, promotional expenses etc. have been given in the plaint in paragraph 13. In paragraph 16 of the plaint, the details of registration of the INTEL word mark in various classes have been stated. 3. In the plaint it is further pleaded that the defendants are engaged in the construction business and are trading under the name of Intel Constructions Private Limited. It is stated that around December 2009 the plaintiff during the course of search into the record of Registrar of Companies (ROC) record came across the defendants company. It is believed by the plaintiff that the defendant company has been incorporated to benefit from the reputation and strength of the INTEL mark. It has also been stated that presently the defendant company currently exists on paper but it can be activated to enlarge their scope of operation, leveraging the strength of INTEL mark. It is pleaded that the plaintiff is aggrieved by such continued use of its well known trade name/ trade mark by the defendant. It is pleaded that the defendants adoption and use of the INTEL mark as trade CS(COMM) 223/2018 Page 2

3 name amounts to wilful infringement of the plaintiff s registration for the mark INTEL in particular registration Nos , , within the meaning of section 29(4) and (5) of the Trademarks Act, It is further stated that the defendants have adopted the trade name INTEL to benefit from the plaintiff s envious reputation. Hence, it is pleaded that the defendants have been engaged in passing off their business as that of the plaintiff s business. 4. The present application filed by the defendant for rejection of the plaint. It is a short application, the relevant part of which reads as follows:- 1.The Applicant Defendants submit that the Plaint is liable to be rejected for the following amongst other reasons: (i) The Suit prays for a permanent injunction against the Defendants, for an order for delivery up of all printed matter bearing the names "Intel Constructions Pvt. Ltd.", and for damages of Rs. 20,00,000/-(Rupees Twenty Lacs only) on account of alleged unlawful use of the trade name Intel. (ii) The Suit has been filed under Section 29 of the Trade Marks Act, 1999 alleging infringement and passing off by the Defendant No. 3 of the Plaintiff s mark "Intel" without disclosing any incident of infringement or passing off/market deception. (iii) Para 20 of the Plaint states inter alia as follows: "...The Plaintiff submits that Defendant company currently exists on paper however they can at any time activate and enlarge their scope of operation leveraging the strength of INTEL mark." (iv) Ex-facie, therefore, the Plaint does not disclose the existence of any cause of action accruing in favour of the Plaintiff and against the Defendant No. 3 (much less against any other defendant(s) who is/ are neither necessary nor proper parties to the suit) for infringement or passing off. CS(COMM) 223/2018 Page 3

4 (v) The suit is also hopelessly barred by limitation if the registration of the Defendant No.3 Company on 6 th October, 1987 under the name of "Intel Constructions Pvt. Ltd." is deemed to constitute the cause of action for the Suit. 5. Hence, essentially two pleas have been raised. Firstly, that the suit is barred by limitation as the defendant No.3 company was registered on under the name Intel Construction Private Limited which was the date when the cause of action accrued in favour of the plaintiff. Secondly, it is pleaded that the plaint does not disclose any cause of action accruing in favour of the plaintiff. 6. I have heard learned counsel for the parties. Learned counsel for the defendant/applicant has repeated that the suit is barred by limitation. He has also relied upon section 35 of the Trade Marks Act 1999 to contend that in view of the said provisions the user of its name by the defendant No.3 company as its own name cannot in any manner give rise to any cause of action in favour of the plaintiff. It is further pleaded that under the Companies Act there exists a procedure to challenge the name. The plaintiff should have followed the procedure but has wrongly chosen to file the present suit. It has also been pleaded that the user of the Trade Mark in the present case is for entirely different service. The plaintiffs admittedly are dealing with computers, computer products, computer parts. The defendant has no presence in the said field and is in the field of construction. It is stated that section 29 of the Trade Marks Act would also have no application to the facts of the case and hence the plaint fails to disclose any cause of action. 7. Learned counsel for the plaintiff has relied upon the judgment of the CS(COMM) 223/2018 Page 4

5 Supreme Court in M/s.Bengal Waterproof Limited vs. M/s.Bombay Waterproof Manufacturing Company and Another, AIR 1997 SC 1398 to contend that in a suit for infringement of trademark the cause of action is a recurring cause of action and the question of limitation would not arise. He has also relied upon the judgments of this Court in Mars Incorporated vs. Kumar Krishna 2003 (26) PTC (DeL) Mukerjee adn Ors.,2003(26) PTC 60 (Del.) and Bloomberg Finance LP vs. Prafull Saklecha & Ors, 207 (2014) DLT 35 to contend that in the facts of the present case the plaint discloses a cause of action. 8. Relevant part of Order VII Rule 11 CPC read as follows:- 11. Rejection of plaint.- The plaint shall be rejected in the following cases:- (a) where it does not disclose a cause of action; (b) where the relief claimed is undervalued, and the plaintiff, on being required by the court to correct the valuation within a time to be fixed by the court, fails to do so; (c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the court to supply the requisite stamp paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law; 9. A plaint is liable to be rejected under Order 7 Rule 11 CPC only if on a reading of the plaint it fails to disclose a cause of action or it is barred by law. In the present case both the above pleas have been raised. 10. As far as bar of limitation is concerned, it has been pleaded that the plaint is barred by limitation as the cause of action arose in 1987 when the CS(COMM) 223/2018 Page 5

6 defendant No.3 company was registered. 11. The Supreme Court in M/s.Bengal Waterproof Limited vs. M/s.Bombay Waterproof Manufacturing Company and Another (supra) held as follows:- 12. The aforesaid averments in the plaint clearly show that the present suit is not based on the same cause of action on which the earlier suit was based. The cause of action for filing this present second suit is the continuous and recurring infringement of plaintiffs trade mark by the defendants continuously till the filing of the present second suit. We asked the learned Counsel for the defendants as to whether pending the suit and at present also the defendants are trading in the offending goods, namely, bearing the mark 'DACKBACK' and he informed us that defendants even at present are carrying on this business. Therefore, pending the second suit all throughout and during the pendency of these proceedings the defendants have carried on the business of trading in the commodity waterproof raincoats 'DACKBACK'. It is obvious that thus the alleged infringement of plaintiffs trade mark 'DUCK BACK' and the alleged passing off action on the part of the defendants in selling their goods by passing off their goods as if they were plaintiffs goods has continued all throughout uninterrupted and in a recurring manner. It is obvious that such infringement of a registered trade mark carried on from time to time would give a recurring cause of action to the holder of the trade mark to make a grievance about the same and similarly such impugned off actions also would give a recurring cause of action to the plaintiff to make a grievance about the same and to seek appropriate relief from the court. It is now well settled that an action for passing off is a common law remedy being an action in substance of deceit under the Law of Torts. Wherever and whenever fresh deceitful act is committed the person deceived would naturally have a fresh cause of action in his favour. Thus every time when a person passes off his goods as those of another he commits the act of such deceit. Similarly whenever and CS(COMM) 223/2018 Page 6

7 wherever a person commits breach of a registered trade mark of another he commits a recurring act of breach or infringement of such trade mark giving a recurring and fresh cause of action at each time of such infringement to the party aggrieved. It is difficult to agree how in such a case when in historical past earlier suit was disposed of as technically not maintainable in absence of proper reliefs, for all times to come in future defendant of such a suit should be armed with a licence to go on committing fresh acts of infringement and passing off with impunity without being subjected to any legal action against such future acts. We posed a question to the learned Counsel for the defendants as to whether after the disposal of the earlier suit if the defendants had suspended their business activities and after a few years had resumed the same and had started selling their goods under the trade mark 'DACKBACK' by passing them off, the plaintiff could have been prohibited and prevented by the bar of Order 2 Rule 2 Sub-rule (3) from filing a fresh suit in future when such future infringement or passing off took place. He rightly and fairly stated that such a suit would not be barred. But his only grievance was that whatever was the infringement or passing off alleged against the defendants in 1980 had, according to the plaintiff, continued uninterrupted and, therefore, in substance the cause of action in both the suits was identical. It is difficult to agree. In cases of continuous causes of action or recurring causes of action bar of Order 2 Rule 2 Sub-rule (3) cannot be invoked. In this connection it is profitable to have a look at Section 22 of the Limitation Act, It lays down that 'in the case of a continuing breach of contract or in the case of a continuing tort, a fresh period of limitation begins to run at every moment of the time during which the breach or the tort, as the case may be, continues. As act of passing off is an act of deceit and tort every time when such tortious act or deceit is committed by the defendant the plaintiff gets a fresh cause of action to come to the court by appropriate proceedings. Similarly infringement of a registered trade mark would also be a continuing wrong so long as infringement continues. therefore, whether the earlier infringement has CS(COMM) 223/2018 Page 7

8 continued or a new infringement has taken place cause of action for filing a fresh suit would obviously arise in favour of the plaintiff who is aggrieved by such fresh infringements of trade mark or fresh passing off actions alleged against the defendant. Consequently, in our view even on merits the learned Trial Judge as well as the learned Single Judge were obviously in error in taking the view that the second suit of the plaintiff in the present case was barred by Order 2 Rule 2 Subrule (3), CPC. 12. Hence, infringement of a registered trademark carried on from time to time would give rise to a recurring cause of action to the holder of the trademark to have a grievance about the same. Every person who passes off his goods as those of another commits such act of deceit. Accordingly, in view of section 22 of the Limitation Act the continuing action would give rise to a fresh period of limitation. On a reading of plaint it cannot be said that the suit is barred by limitation. 13. As far as the contention of the defendant that no cause of action has arisen in favour of the plaintiff is concerned this court in Mars Incorporated vs. Kumar Krishna Mukerjee and Ors., (supra) was dealing with a case with somewhat similar facts and stated as follows:- 12. The first and foremost requirement of action against the threatened infringement of the trademark is that the person facing threat must have a right which is purported to be infringed. Second, the threat of infringement or invasion should be substantial and material in extent. In that eventuality, the question will again arise whether a person who has not suffered any damage in respect of trade either though competition or through deceptive or confusing similarities of the trademark adopted by the defendant either in the same trade or goods or in any other manner that may have the consequence of causing damage or diluting the trademark of CS(COMM) 223/2018 Page 8

9 the plaintiff or creating confusion as to the source and origin of goods of the defendants has any right to challenge the act of the defendants. 13. There is no difficulty in injunction the defendant from infringing the trademark of the plaintiff if the latter is found to have either infringed the trademark of the plaintiff directly or by way of passing off. For instance Section 28 of the Trade and Merchandise Marks Act, 1958, protects the rights against infringement of a trademark of registered proprietor of the trademark with relation to the goods in respect of which the trademark is registered and to obtain the relief in respect of infringement of the trademark. Similarly, Section 29 also protects the right of a person who is even not a registered proprietor of the trade mark or a registered user thereof if his trademark has been in prior, uninterrupted and long use if the infringing trademark is identical or deceptively similar in relation to any goods. In that case the aggrieved person has to establish the reputation and goodwill of the trademark. Such a protection is known as an action against passing off. 14. Here we are confronted with a situation where neither the infringer has used the infringed trade mark in relation to any goods in respect of which the plaintiff's trade mark is registered nor has the defendant committed offence of passing off. The defendants have merely adopted the trade mark of the plaintiff as a part of Corporate name and trading style. Admittedly defendant is a company on paper only. It has neither started nor carried out any business nor have they filed annual returns or other mandatory documents I am of the view that as in the case of infringement of registered trade mark or passing off action, the intention and object of infringer is mainly to trade or cash upon widespread and invaluable goodwill and reputation established over the years at huge cost by the plaintiff and in the process there occurs a dilution of the trade mark if goods manufactured and sold by infringer happen to be of poor quality, the underline CS(COMM) 223/2018 Page 9

10 intention of a person who proposes to adopt either same or deceptively or confusingly similar trade mark or even the Corporate name is to encash and become unjustly rich by trading upon the goodwill and reputation of the plaintiff Be that as it may, a party who is under threat of infringement or passing off of its trade name cannot be left remediless or in lurch merely for the reasons that the said threat have not materialised causing damage or loss either in trade or reputation or goodwill. Whether a party is entitled to injunction to restrain the threatened infringement upon its trade name, there have been varying views. One view is that injunctive relief may be obtained even before defendant actually opens for business, if the threatened act of defendant is imminent and impending as one does not have to await consummation of the threatened injury to obtain preventive relief (Cleveland Opera Co.V. Cleveland Civic Opera Ass'n, 22 Ohio App. 5 Ohio L. Abs.297. Other view is that before injunction may properly be issued the complaining party must show infringement of its trade mark rights as the right of a proprietor of registered trade mark to protect its mark is confined or limited to the goods specified in registration certificate. According to this view, unless and until the actual damage has been caused or there is likelihood of damage because of confusion or mistake as to the source or origin of the goods on account of deceptively similar mark. Xxx 21. To expect the aggrieved party to wait and watch for the opening of business or manufacturing or sale or goods under the apprehended infringement of trade mark is too much. A stitch in time always saves nine and that is what is the essence of Quia Timet Action. With the onset of information technology in modern times, registration of a website which is popularly knows as domain name, a party owning a website CS(COMM) 223/2018 Page 10

11 has a right to protect the same if any person registers the website with a name which is inherently deceptive. In such cases either party is directed to change the name of the site or handover to its owner. On the same pattern and pedestal is the threatened or apprehended invasion of the trade mark or Corporate name. 14. Hence merely because the plea raised in the plaint is that for the present the defendant exists on paper, cannot mean or imply that the plaintiff cannot approach this Court for relief. The plaintiff is not to wait till the defendant activates its operation. Threatened invasion of the rights of the plaintiff would give rise to a cause of action in favour of the Plaintiff. Hence, there is no merit in the plea that the plaint does not disclose a cause of action. 15. I will now deal with the contention of learned counsel for the defendant that the present suit does not lie as the defendant is bona fide using its own name for its business. Reliance is placed on Section 35 of the Trade Mark Act. 16. Section 35 of the Trade Mark Act reads as follows:- 35. Saving for use of name, address or description of goods or services. Nothing in this Act shall entitle the proprietor or a registered user of a registered trade mark to interfere with any bona fide use by a person of his own name or that of his place of business, or of the name, or of the name of the place of business, of any of his predecessors in business, or the use by any person of any bona fide description of the character or quality of his goods or services. 17. In Bloomberg Finance LP vs. Prafull Saklecha & Ors. (supra) this court explained section 29 and 29(5) of the Trade Mark Act held as follows:- 34. Therefore, under Section 29(1), (2) and (3) for infringement CS(COMM) 223/2018 Page 11

12 to result (i) the impugned mark has to be either similar to or identical with the registered mark and (ii) the goods or services for which the impugned mark is sued has to also either be identical with or similar to the goods or services for which registration has been granted. The scenario is different as regards Section 29(4) of the TM Act For infringement to result under Section 29(4), the following conditions are required to be fulfilled: (i) the person using the impugned mark is neither a registered proprietor in relation to the goods and services for which the mark is registered nor is using it by way of permitted use (ii) the impugned mark must be used in the course of trade (ii) the impugned mark has to be either similar to or identical with the registered mark (iii) the impugned mark is used for goods or services different from those for which registration has been granted; (iv) the registered trade mark has a reputation in India; (iv) the use of the impugned mark is without due cause, and takes unfair advantage of or is detrimental to, (a) the distinctive character of the registered trade mark; or (b) the reputation of the registered trade mark. 40. Turning to Section 29(5) of the TM Act 1999, it is seen that it relates to a situation where (i) the infringer uses the registered trademark "as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern" and (ii) the business concern or trade is in the same goods or services in respect of which the trade mark is registered. If the owner/proprietor of the registered trade mark is able to show that both the above elements exist then an injunction restraining order the infringer should straightway follow. This is in the nature of a per se or a 'no-fault' provision which offers a higher degree of protection where both the above elements are shown to exist. For the purpose of Section 29(5) of the TM Act 1999, there is no requirement to show that the mark has a distinctive character or that any confusion is likely to result from the use by the infringer of the registered mark as part of its trade name or name of the CS(COMM) 223/2018 Page 12

13 business concern. 18. I may note that counsel for plaintiff has drawn my attention to the plaint where it is specifically stated that the trademark INTEL is also registered under class 37 to deal with construction services, i.e. the same field is which the defendant is operating. Hence, it cannot be claimed by the defendant that their registered trademark is for a different service. The reliance of learned counsel for the defendant on Section 35 of the Trade Mark Acts is misplaced in view of the provisions of Section 29(5) of the Trade Marks Act. A person who uses the registered trade mark as its trade name or part of his business concern dealing in goods and services in respect of which the trade mark is registered is said to infringe the trademark. 19. It is not for this court to dwell deep into the contention of the defendant, at this stage. At this stage, I am only concerned with as to whether the plaint discloses a cause of action which is to be adjudicated upon by this court. The defence of the defendant is not to be taken into account while adjudicating an application under Order 7 Rule 11 CPC. 20. Reference may be had to the judgment to the case of Mayar (H.K.) Ltd & Ors v. Owners & Parties, Vessel M.V. Fortune Express & Ors, AIR 2006 SC 1828; wherein the Supreme Court held as follows: 11. It is apparent that the plaint cannot be rejected on the basis of the allegations made by the defendant in his written statement or in an application for rejection of the plaint. The Court has to read the entire plaint as a whole to find out whether it discloses a cause of action and if it does, then the plaint cannot be rejected by the Court exercising the powers under Order VII, Rule 11 of the Code. Essentially, whether the plaint discloses a cause of action, is a question of fact which has to be gathered on the basis of the averments made in the plaint CS(COMM) 223/2018 Page 13

14 in its entirety taking those averments to be correct. A cause of action is a bundle of facts which are required to be proved for obtaining relief and for the said purpose, the material facts are required to be stated but not the evidence except in certain cases where the pleadings relied on are in regard to misrepresentation, fraud, wilful default, undue influence or of the same nature. So long as the plaint discloses some cause of action which requires determination by the court, mere fact that in the opinion of the Judge the plaintiff may not succeed cannot be a ground for rejection of the plaint. Similar are the observations of the Hon ble Supreme Court in the case of Vigneswara Coop. Housing Society Ltd. V. K. Balachandramouli & Ors, (2005) 13 SCC 506. Reference may also be had to the judgement of this court in the case of Tilak Raj Bhagat vs. Ranjit Kaur, 159 (2009) DLT 470 wherein it was held as follows:- 6. It may be worthwhile to mention here that while considering an application under Order 7 Rule 11 CPC, the Court has to look at the averments made in the plaint by taking the same as correct on its face value as also the documents filed in support thereof. Neither defence of the defendant nor averments made in the application have to be given any weightage. Plaint has to be read as a whole together with the documents filed by the plaintiff. 21. There is no merit in the present application and the same is dismissed. IA No.12013/2014 List for arguments on FEBRUARY 07, 2018/n JAYANT NATH, J CS(COMM) 223/2018 Page 14