Delhi HC judgment in Lt Foods Ltd v. Sunstar Overseas Ltd &Anr.

The Delhi HC, in Lt Foods Ltd v. Sunstar Overseas Ltd &Anr., decided on a bunch of interim applications filed by the parties in the cross-suits, seeking injunction against each other. The parties, in the instant case, claimed ownership rights over the mark “HERITAGE” used in respect of rice. While plaintiff claimed to be the user of the mark since 1997, the defendant claimed to be the user from 1985.The parties did not dispute that the marks used by them viz., “HERITAGE” by plaintiff (Registration no. 799246) and “INDIAN HERITAGE” & “INDIAN HERITAGE SELECT” (Registration no. 1149872) by defendants were deceptively similar.

Background

The plaintiff, in March 2009, came to know that the defendant exported rice under the mark “INDIAN HERITAGE”. The plaintiff, along with an interim application, filed the first suit (CS (OS) No. 612/2009) for permanent injunction restraining the infringement of trademark, passing off, rendition of accounts of profits/damages etc. against the defendants. The defendants filed a separate suit against the plaintiff (CS (OS) No. 639/2009) for permanent injunction restraining the infringement of trademark, passing off, rendition of profits etc. The plaintiff filed its second suit (CS(OS) No. 653/2009) wherein it made additional statements based on subsequent events. The plaintiff, in the aforesaid suit, argued that the invoices adduced by the defendant were dubious and fabricated and did not establish any substantial, continuous and genuine commercial use of the mark “INDIAN HERITAGE SELECT”. The instant judgment, discussed in this post, decided upon a bunch of interim applications filed by the parties in the above mentioned cross-suits, seeking injunctions against each other.

Judgment

Considering Section 28(3) of Trade Marks Act, 1999, the Court held that the suits filed by them against each other for infringement of trademark were not maintainable. [ Section 28(3): Where two or more persons are registered proprietors of trademarks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trademarks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trademarks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.] However, suit for passing off was held to be maintainable.

The Court, in this context, examined the evidence adduced by parties for determining the prior user of the mark in question. The Court appointed Local Commissioners to verify the copies of invoices presented before the Court by the plaintiff and the defendant. On perusing the evidence produced by the plaintiff (application for registration dated 20.04.1998 in class 30, statement of total annual sales during the period 1998 – 2009 & invoices during the period 1998 – 2009), the Court prima facie determined that the plaintiff was using the mark continuously since 1998.

The Court, however, dismissed the documents filed by defendants as “not genuine”. Considering the report of Local Commissioner which stated that the defendant did not use the mark “HERITAGE” in any of the exports as evidenced by the shipping bills and supporting documents made available by the customs department, it was held that the defendants argued their case based on documents which were prima facie forged and fabricated. The report of the Local Commissioner noted that the defendants interpolated the mark “HERITAGE SELECT”by replacing the words “SUPER” or “KITCHEN KING” marks in the invoices produced before the Court.

The judgment noted that there was not any clear and cogent evidence available on record to show use of mark prior to 11.11.2002 (date of application filed by defendant) by the defendant. It was noted that the defendant did not furnish sales figures for any financial year. It was also noted that the defendants did not produce and furnish the originals in spite of being given ample opportunities. The Court applied the principle of adverse presumption viz., the Court can draw an adverse presumption against the party if the party withholds a document or evidence knowing that the said document will operate to his disadvantage and held that Court would not assist a party whose case was founded on falsehood. The Court accordingly dismissed the interim applications filed by the defendant. The defendants, their licensees and franchisees were restrained from selling, exporting or dealing in rice under the impugned marks “INDIAN HERITAGE SELECT”/ “HERITAGE SELECT” or any other mark which might be deceptively similar to the mark “HERITAGE” of the plaintiff till the disposal of the suit. Further, the defendant was asked to deposit INR 50,000 with the Prime Minister’s Relief Fund for wasting the time of the Court.

Analysis

The conduct of defendant prima facie did give an impression that the case was built on forged and fabricated documents. It will be highly unfortunate (both legally and ethically) if it is conclusively determined in the final judgment. Further, the judgment is a warning to those who fail to adduce originals as and when they are required to be produced before the Court- especially in a suit for passing off as it is imperative to produce clear and cogent evidence in such a suit. Passing off protects a mark only if goodwill and reputation are effectively demonstrated. The burden is upon the aggrieved to gather survey evidence for demonstrating the possibility or existence of confusion.

The judgment also highlighted the law of adverse presumption by referring to the Supreme Court judgment in Pradip Buragohain v. Pranati Phukan (2010 (11) SCC 108): “We may in this regard refer to illustration (g) to Section 114 of the Evidence Act which permits the Court to draw an adverse presumption against the party in default to the effect that evidence which could be but is not produced would, if produced, have been unfavourable to the person who withholds it. The rule is contained in the well-known maxim: omniapraesumuntur contra spoliatorem. If a man wrongfully withholds evidence, every presumption to his disadvantage consistent with the facts admitted or proved will be adopted.”

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http://www.agarwalandco.com

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Source: http://spicyipindia.blogspot.in/2012/06/note-on-delhi-hc-judgment-in-lt-foods.html