No Acts & Articles mentioned in this case
FAO(OS)(COMM) 151/2023 and another connected matter Page 1 of 82
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 22 April 2025
Pronounced on: 1 July 2025
+ FAO(OS) (COMM) 151/2023 & CM APPL. 37334/2023
VIP INDUSTRIES LTD .....Appellant
Through: Mr Akhil Sibal, Sr. Adv. with
Mr. Nishad Nadkarni, Mr. Ankur Sangal,
Mr. Ankit Arvind, Mr. Aasif Navodia, Ms.
Khushboo Jhunjhunwala, Mr. Shaurya
Pandey, Ms. Rakshita Singh and Ms. Ridhie
Baja, Advs.
versus
CARLTON SHOES LTD & ANR. .....Respondents
Through: Mr. Sandeep Sethi, Sr. Adv.
with Mr. Peeyoosh Kalra, Mr. C.A. Brijesh,
Mr. Ishith Arora, Mr. Sumer Dev Seth and
Ms. Simranjot Kaur, Advs.
+ FAO(OS) (COMM) 152/2023 & CM APPL. 37351/2023
VIP INDUSTRIES LTD .....Appellant
Through: Mr Akhil Sibal, Sr. Adv. with
Mr. Nishad Nadkarni, Mr. Ankur Sangal,
Mr. Ankit Arvind, Mr. Aasif Navodia, Ms.
Khushboo Jhunjhunwala, Mr. Shaurya
Pandey, Ms. Rakshita Singh and Ms. Ridhie
Baja, Advs.
versus
CARLTON SHOES LTD & ANR. .....Respondents
Through: Mr. Sandeep Sethi, Sr. Adv.
with Mr. Peeyoosh Kalra, Mr. C.A. Brijesh,
Mr. Ishith Arora, Mr. Sumer Dev Seth and
Ms. Simranjot Kaur, Advs.
FAO(OS)(COMM) 151/2023 and another connected matter Page 2 of 82
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE AJAY DIGPAUL
% JUDGMENT
01.07.2025
C. HARI SHANKAR, J.
Facilitative Index to the Judgement
S. No. Subject Para Nos
1 Opening para 1
2 The lis 2 – 8
3 The impugned judgment in a nutshell 9 – 16
4 Rival stands before the learned Single Judge
5 Case set up by CSL in CS (Comm) 730/2019 17 – 23
6 Case set up by VIP in CS (Comm) 52/2020 24 – 28
7 The impugned judgment
8 A No case of infringement, as VIP and CSL are
both proprietors of registrations of the mark
CARLTON in Class 18
31 – 32
9 B No case of trans border reputation made out 33 – 36
10 C CSL has goodwill, and priority of user, in
India
37
11 D Ultimate Order 38
12 Rival Contentions of learned Counsel before us
13 Submissions of Mr Akhil Sibal, on behalf of VIP
14 A Priority of user 39 – 46
15 B Goodwill of VIP in CARLTON mark for
luggage
47
16 C Re. finding of goodwill in CARLTON mark
as used by CSL
48 – 52
17 D Re. CSL’s goodwill in use of the CARLTON
mark for footwear
53 – 54
18 E Re. finding of dishonest adoption of 55 – 57
FAO(OS)(COMM) 151/2023 and another connected matter Page 3 of 82
CARLTON mark by VIP
19 F Misrepresentation and dishonesty on CSL’s
part
58
20 G Delay 59
21 H Iniquitious consequence of impugned
judgment
60 – 61
22 Submissions of Mr. Sandeep Sethi on behalf of CSL
23 A Priority of registration and priority of use 62 – 65
24 B The concept of “goodwill” 66 – 67
25 C Re. VIP’s goodwill in the CARLTON mark
– No trans-border reputation shown
68 – 69
26 D Re. plea that CSL had no reputation or
goodwill in the CARLTON mark for travel
luggage
70 – 72
27 E Misrepresentation 73
28 F Balance of convenience 98 – 100
29 G Re. Relief granted by impugned judgment 75
30 H Re. Delay 76 – 77
31 Submissions of Mr Sibal by way of rejoinder 78 – 83
32 Analysis
33 A Re. Infringement 84 – 87
34 B Ingredients of passing off 88 – 94
35 C Trade mark rights are territorial 95 – 97
36 D The concept of goodwill for the purposes of
passing off – Has goodwill to be established
in the mark, or in the mark as used for
specific goods or services?
98 – 114
37 E Trans-border reputation 115 – 127
38 F Priority of user, and goodwill, established by
CSL
128 – 132
39 G Balance of Convenience 133 – 137
40 H Delay 138 – 139
41 Conclusion 140 - 141
1. These appeals arise out of a common judgment dated 17 July
2023, rendered by a learned Single Judge of this Court in CS (Comm)
730/2019
1
and CS (Comm) 52/2020
2
. As the cause title themselves
1
Carlton Shoes Ltd. v VIP Industries Ltd
FAO(OS)(COMM) 151/2023 and another connected matter Page 4 of 82
would indicate, these were cross suits, instituted against each other by
Carlton Shoes Ltd.
3
and VIP Industries Ltd
4
.
The lis
2. Once the air is cleared, the controversy has percolated down to
only one issue, which is whether goodwill, for the purposes of a
passing off action, is of a mark, or of a mark in respect of particular
goods or category of goods.
3. CS (Comm) 730/2019, instituted by CSL against VIP and CS
(Comm) 52/2020, instituted by VIP against CSL, were both seeking
permanent injunction, restraining the opposite party from using the
mark CARLTON, as a word mark or a device mark.
4. During the course of the arguments, Mr. Akhil Sibal, learned
Senior Counsel for VIP, submits that the restraint that his client seeks
against CSL is only against use of the mark CARLTON for luggage,
bags and similar goods. He has no objection to CSL using the mark
CARLTON for any other item.
5. As against this, CSL presses its claim for injunction against VIP
in respect of the use of the mark CARLTON for any goods in Class
18.
2
VIP Industries Ltd v Carlton Shoes Ltd.
3
“CSL” hereinafter
4
“VIP” hereinafter
FAO(OS)(COMM) 151/2023 and another connected matter Page 5 of 82
6. VIP and CSL filed, with their respective suits, applications
under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure,
1908
5
, seeking interim injunctions pending disposal of the suits. CSL
filed IA 18443/2019 in CS (Comm) 730/2019 and VIP filed IA
1369/2020 in CS (Comm) 52/2020.
7. By the impugned judgment, the learned Single Judge has
dismissed IA 1369/2020 filed by VIP and has allowed IA 18443/2019
filed by CSL in the following terms:
“66. For all the aforesaid reasons, this Court comes to a prima
facie conclusion that Carlton has made out a case for grant of
injunction against VIP. Accordingly, I.A. 18443/2019 in
CS(COMM) 730/2019 filed by Carlton is allowed to the extent of
restraining VIP, its assigns, affiliates, relatives, successors-in-
interest, licensees, franchisees, partners, representatives, servants,
distributors, employees, agents and all other persons from
marketing, selling or offering to sell bags and other allied goods
falling in class 18 under its trademarks CARLTON (word mark)
and and/or any other trade mark identical/ deceptively
similar to Carlton’s trademarks CARLTON/CARLTON
LONDON/ or any variants thereof singularly or in
conjunction with any other word or monogram/logo or label or in
any other manner, amounting to passing off. I.A. 1369/2020 in
CS(COMM) 52/2020 filed by VIP against Carlton is dismissed.
67. It is however directed that Carlton shall maintain accounts
of manufacture and sales of the impugned products under the
marks CARLTON/CARLTON LONDON/ and shall
file the same on affidavit on half-yearly basis in this Court.”
5
“CPC” hereinafter
FAO(OS)(COMM) 151/2023 and another connected matter Page 6 of 82
8. Aggrieved by the impugned judgment, VIP has, therefore,
instituted the present appeals. FAO (OS) (Comm) 151/2023
challenges the impugned judgment insofar as it dismisses VIP’s IA
and FAO (OS) (Comm) 152/2023 challenges the impugned judgment
insofar as allows CSL’s IA.
The Impugned Judgment in a nutshell
9. CSL and VIP both possess registrations of the mark
CARLTON, in Class 18, for various goods. CSL’s registration in
Class 18 is w.e.f. 6 May 1994, whereas VIP possesses two
registrations of the CARLTON mark in Class 18, w.e.f. 26 July 1995
(through its predecessor-in-interest CARLTON International PLC
6
)
and w.e.f. 21 April 2006, on its own account.
10. In their cross suits, seeking injunction against use of the mark
CARLTON, CSL and VIP pleaded infringement as well as passing
off.
11. The entire judgment of the learned Single Judge can be
condensed into three precise findings. They are that
(i) as VIP and CSL have both registrations of the
CARLTON mark in Class 18, neither can maintain an
infringement action against the other, in view of Section 28(3)
7
of the Trade Marks Act, 1999,
6
“CIPLC” hereinafter
7
(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly
resemble each other, the exclusive right to the use of any of those trade marks 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 trade
FAO(OS)(COMM) 151/2023 and another connected matter Page 7 of 82
(ii) insofar as passing off is concerned, VIP had not been able
to prove the existence of trans-border reputation of the
CARLTON mark in India prior to 2004, when VIP commenced
use of the CARLTON mark in India, so that the issue of passing
off had to be decided on the basis of the goodwill and reputation
of the respective marks of VIP and CSL after their use
commenced in India, and
(iii) CSL, on the other hand, had proved the existence of
goodwill of the CARLTON mark in India at least from 2003,
which was prior to the commencement of use of the CARLTON
mark by VIP in 2004.
12. Thus, the learned Single Judge has held that, in the absence of
proof of trans-border reputation of the CARLTON mark, as used by
VIP in India prior to 2004, priority of user in India of the CARLTON
mark is of CSL. The learned Single Judge has also held that CSL has
provided enough material to establish existence of sufficient goodwill
in India as would justify an action for passing off.
13. Predicated on these findings, the learned Single Judge has
proceeded to injunct VIP from using the CARLTON mark in respect
of goods covered by Class 18 and has rejected VIP’s application for
similar injunction against CARLTON.
14. One of the main planks of Mr. Akhil Sibal’s arguments, on
behalf of VIP, is that goodwill has to be of the brand of the mark as
marks 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.
FAO(OS)(COMM) 151/2023 and another connected matter Page 8 of 82
used in respect of particular goods. He submits that, even if CSL
possess enviable goodwill for the CARLTON mark prior to 2004, it
had never used the mark for bags. On the other hand, VIP has
admittedly been using the CARLTON mark for bags in India since
2004. In respect of bags, therefore, Mr. Sibal’s submissions has been
that it is VIP which possesses goodwill in the CARLTON mark rather
than CSL.
15. The impugned judgment, he submits, has resulted in a peculiar
consequence. It has permitted CSL, who has no goodwill whatsoever
for the CARLTON mark for travel luggage, to use the mark for travel
luggage and has injuncted VIP, which has over two decades of
goodwill for the CARLTON mark in respect of travel luggage, from
further using the mark for travel luggage whatsoever. Even the gross
illegality of such a consequence, as he would submit, makes out a case
for interference.
16. The issue before us is, therefore, limited and no detailed
allusion to facts would be necessary. However, a brief factual
overview, for statistical purposes, would be appropriate.
Rival Stands before the learned Single Judge
Case set up by CSL in CS (Comm) 730/2019
17. CSL contended, in its suit, that the mark “CARLTON” was
adopted by one Baljit Virk in 1992 in the UK, and was based on the
name of his son Carljit Virk. Baljit Virk incorporated the company
FAO(OS)(COMM) 151/2023 and another connected matter Page 9 of 82
Carlton Shoes Ltd. in 1992 in UK. In 1993, Carlton Overseas Pvt. Ltd.
was incorporated in India.
18. The trademark CARLTON was registered in India w.e.f. 6 May
1994 in Class 18 for “leather and imitations of leather and classes
animal skins hides trunks and travelling bags umbrellas parasols and
walking sticks whips harness and saddlery”
19. Admittedly, the mark CARLTON was in use in India since
1994. However, it is not in dispute that CSL did not use the
CARLTON mark for bags of any sort, even though travelling bags
were covered by the trademark registration held by it. The primary use
of the mark CARLTON by CSL was for shoes, footwear and the like .
20. On 10 October 2019, CSL received a legal notice from VIP,
which formed the ultimate provocation for filing CS (Comm)
730/2019. In the legal notice, VIP stated that it had come to learn that
CSL was planning to use the CARLTON mark for bags and other such
items. VIP claimed to have been using the mark CARLTON, for bags,
suit cases and other such goods since 2006. As such, VIP claimed that,
by planning to use the mark CARLTON for bags, CSL was seeking to
piggyback on the goodwill and reputation earned by VIP in respect of
the said mark. VIP also pointed out that it was the registered
proprietor of the CARLTON mark in Class 18, through its predecessor
CIPLC w.e.f. 26 July 1995 for “umbrellas and parasols, articles of
luggage, briefcases and attache cases, suitcases, bags, bags for
campers, bags for climbers, beach bags, game bags, handbags,
rucksacks, school bags, school satchels, shopping bags, handbags,
FAO(OS)(COMM) 151/2023 and another connected matter Page 10 of 82
haversacks, wallers, purses, pouches, sling bags for carrying infants,
tool bags, travelling bags, trunks and vanity cases (unfitted), articles of
leather and of imitation leather” and on its own account w.e.f. 21 April
2006 for “bags, suit cases, brief cases, carry-ons and travelling bags”.
As such, VIP had amassed considerable goodwill of the CARLTON
mark in respect of bags and similar goods, it is submitted, on which
CSL could not lawfully seek to capitalise. As such, CSL was called
upon to cease and desist from using the mark CARLTON in respect of
goods covered in Class 18, particularly for bags of any sort.
21. CSL responded to VIP’s cease and desist notice on 16 October
2019 and 25 November 2019. In its responses, CSL pointed out that it
was the registered proprietor of the CARLTON trademark in Class 18
w.e.f. 6 May 1994, which was much prior both to the registration of
the CARLTON mark in Class 18 in favour of VIP or even of its
predecessor and as well as of the date from which VIP claimed user of
the CARLTON mark.
22. CSL promptly followed up the response to the cease and desist
notice by CS (Comm) 730/2019, filed before this Court on 21
December 2019. In its suit, CSL contended that the use, by VIP, of the
mark CARLTON, infringed the registered CARLTON trade mark of
CSL and also amounted to an attempt by VIP to pass off its goods as
the goods of CSL. As such, CSL sought a decree of permanent
injunction, restraining VIP from using the CARTLTON mark in
respect of any goods whatsoever.
23. Along with its suit, CSL also filed IA 18443/2019 under Order
FAO(OS)(COMM) 151/2023 and another connected matter Page 11 of 82
XXXIX Rules 1 and 2 of the CPC, seeking interim injunction.
Case set up by VIP in CS(Comm) 52/2020
24. VIP claimed proprietorial rights over the CARLTON mark by
virtue of an Assignment Agreement dated 25 March 2004, whereby
the marks along with goodwill vesting therein, were assigned by
CIPLC in favour of VIP.
25. VIP pointed out, in its suit, that the origin of adoption of the
mark CARLTON dated back to 1980 when Raxvale Ltd.
8
, a company
incorporated in the UK, had adopted the mark DIPLOMAT
CARLTON, followed by adopted of the mark CARLTON in 1986. On
4 December 1989, the name of the company was changed from
Raxvale Ltd. to Carlton International Plc. The mark CARLTON was
registered in India in favour of CIPLC under Class 18 w.e.f. 26 July
1995 for “umbrellas and parasols, articles of luggage, briefcases and
attache cases, suitcases, bags, bags for campers, bags for climbers,
beach bags, game bags, handbags, rucksacks, school bags, school
satchels, shopping bags, handbags, haversacks, wallets, purses,
pouches, sling bags for carrying infants, tool bags, travelling bags,
trunks and vanity cases (unfitted), articles of leather and of imitation
leather”. VIP acquired the intellectual property rights in the
CARLTON mark from CIPLC vide Assignment Agreement dated 25
March 2004. Consequent thereupon, VIP also obtained registration of
the mark CARLTON in class 18 for the “bags, suit cases, briefcases,
carry-ons and travelling bags”, w.e.f. 21 April 2006.
8
“Raxvale” hereinafter
FAO(OS)(COMM) 151/2023 and another connected matter Page 12 of 82
26. VIP claimed user of the CARLTON mark, in respect of
luggage, travelling bags, hand bags and the like since 2006.
27. The goodwill of the mark CARLTON, insofar as it pertained to
luggage, therefore, dated back to 1980, when Raxvale commenced
using the mark in the UK. In India, VIP itself had commenced using
the mark CARLTON in respect of luggage, bags etc. since 24 May
2004. VIP had, therefore, to its credit, over 15 years of goodwill in
the mark CARLTON in respect of luggage, bags and similar goods, by
2019, when it came to learnt that CSL was also intending to use the
mark CARLTON for similar items. This, according to VIP, amounted
to capitalizing on the goodwill earned by VIP in the mark CARLTON
for luggage, bags etc. and also amounted to infringement of the
registration of the mark CARLTON in favour of VIP/its predecessor-
in-interest in Class 18, dating back to 26 July 1995. As such, alleging
infringement as well as passing off, VIP, by its suit, sought a decree of
permanent injunction, restraining CSL from using the CARLTON
mark for any goods covered by Class 18. As already noted, before us,
Mr. Sibal, learned Senior Counsel for VIP, has restricted the
injunction that his client seeks against CARLTON to bags, hand bags,
travel luggage and other similar goods, principally to travel luggage.
28. With its suit, VIP filed IA 1369/2020 under Order XXXIX
Rules 1 and 2 of the CPC, seeking an interim injunction.
FAO(OS)(COMM) 151/2023 and another connected matter Page 13 of 82
The impugned judgment
29. We may proceed, straightway, to the impugned judgment.
30. The findings of the learned Single Judge commence from para
28 of the impugned judgment.
A. No case of infringement, as VIP and CSL are both proprietors
of registrations of the mark CARLTON in Class 18
31. From paras 38 to 45, the learned Single Judge deals with the
rival contentions of CSL and VIP, against each other, alleging
infringement. The learned Single Judge holds, on the basis of Section
28(3) of the Trade Marks Act, that an action for infringement cannot
lie at the instance of one registered mark holder against another,
though each of them could maintain an infringement action against a
third, unregistered trade mark holder.
32. The rival claims of passing off, as levelled by VIP and CSL
against each other, therefore, according to the learned Single Judge,
were alone required to be decided.
B. No case of trans border reputation made out
33. The findings of the learned Single Judge, on this aspect, can
also be divided into two parts. As the learned Single Judge observes,
the plea of passing off, in a case such as this, has two faces. The
aspect of passing off has to be examined both with respect to the
FAO(OS)(COMM) 151/2023 and another connected matter Page 14 of 82
aspect of trans-border reputation of rival marks as well as goodwill
and reputation of the marks within India.
34. It is open to a party, who has been using a trade mark outside
India, either by itself or through its predecessor-in-interest, before
commencing use of the mark in India, to contend that even the use of
the mark outside India would contribute towards the goodwill that the
mark has earned over a period of time, on account of the trans-border
reputation of the mark in India. For this purpose, however, it would
be necessary for such a party to establish spillover of the reputation of
the mark, as used outside India, into the Indian territory. The
principles that apply in this regard have been thus culled out by one of
us (C. Hari Shankar, J.) sitting singly, in BPI Sports LLC v Saurabh
Gulati
9
:
“(i) The territoriality principle applies; not the universality
doctrine. Existence of goodwill and reputation has, therefore, to be
shown to exist in India. Universal or worldwide goodwill and
reputation, sans any evidence of territorial goodwill and reputation,
is not sufficient.
(ii) Mere reputation is not enough. The claimant/plaintiff must
show that it has significant goodwill.
(iii) The actual existence of an office of the plaintiff in the
country of the defendant is not necessary
(iv) However, the claimant must have customers within the
country of the defendant, as opposed to persons in the defendant's
country who are customers elsewhere. Thus, where the claimant's
business is carried on abroad, it is not enough for the claimant to
show that there are people in the defendant's country who happen
to be its customers when they are abroad.
(v) However, it would be enough if the claimant could show
that there were people in the defendant's country who, by booking
9
2023 SCC OnLine Del 2424
FAO(OS)(COMM) 151/2023 and another connected matter Page 15 of 82
with, or purchasing from an entity in the defendant's country,
obtained the right to receive the claimant's service abroad. The
person from whom such booking or purchase took place could be
the claimant, or its branch office, or someone acting for or on
behalf of the claimant.
(vi) The claimant must be present through its mark in the
territorial jurisdiction of the country of the defendant, though the
existence of a real market was not necessary.
(vii) Such presence could, for instance, be shown by extensive
advertisements which had been circulated and seen, or read, in the
country of the defendant.
(viii) Once the existence of transborder reputation and goodwill
was thus established, the claimant was not required, further, to
prove the existence of actual confusion. The likelihood of the
customer of average intelligence and imperfect recollection being
confused, by the use of the impugned mark of the defendant, that
the goods or services of the defendant were those of the claimant-
plaintiff, was sufficient.”
35. Adopting the said principles, and following the judgment of the
Supreme Court in Toyota Jidosha Kabushiki Kaisha v Prius Auto
Industries Ltd
10
, the learned Single Judge holds that “the existence of
goodwill and reputation has to be shown to exist in India and
worldwide or global goodwill and reputation, sans any evidence of
territorial goodwill and reputation, will be insufficient to succeed in a
claim of passing off and thus yardstick to judge the claim of passing
off will be “prior user” in India”.
36. Following the said observations, the learned Single Judge has
thus concluded in paras 55 and 56 of the impugned judgment:
“55. From a conjoint reading of the aforesaid judgments, the
singular principle that emerges for deciding the claim of passing
off will be to assess the existence of goodwill and reputation ‘in
India’. As a corollary, worldwide or global goodwill and reputation
10
(2018) 2 SCC 1
FAO(OS)(COMM) 151/2023 and another connected matter Page 16 of 82
will not suffice albeit actual or physical existence of brick and
mortar stores may not be necessary in the country. In other words,
Plaintiff would have to establish its presence within the jurisdiction
of Defendant’s country and this presence can be through
advertisements and promotion and not necessarily by real market
but with a rider that that the spillage is so considerable as to
confuse or deceive a customer of average intelligence and
imperfect recollection into believing that the goods or services of
the Defendant are those of the Plaintiff.
56. Tested on the anvil of the observations of the Supreme
Court in Toyota Jidosha Kabushiki Kaisha (supra) and the
aforementioned judgments, in order to succeed in the claim for
passing off, both VIP and Carlton in their respective rights would
have to establish their existence through their marks in India and
their goodwill and reputation abroad alone would not suffice,
applying the territoriality principle.”
C. CSL has goodwill, and priority of user, in India
37. As the learned Single Judge notes in the remaining paragraphs
of the impugned judgment, the only issue that remained to be
considered was the comparative goodwill of CSL and VIP in the
CARLTON mark in India. Regarding this, the learned Single Judge
has thus held in paras 56 to 65 of the impugned judgment:
“56. Tested on the anvil of the observations of the Supreme
Court in Toyota Jidosha Kabushiki Kaisha (supra) and the
aforementioned judgments, in order to succeed in the claim for
passing off, both VIP and Carlton in their respective rights would
have to establish their existence through their marks in India and
their goodwill and reputation abroad alone would not suffice,
applying the territoriality principle.
57. VIP has placed on record promotional and advertisement
material in support of its claim of transborder reputation of its
predecessor-in-title Carlton International PLC. As an illustration,
one of the said document is extracted hereunder, for ready
reference:-
FAO(OS)(COMM) 151/2023 and another connected matter Page 17 of 82
58. It is palpably clear that these documents shed no light on
whether the purported promotion material was extensively and
widely published and/or circulated in India and customers here had
seen and read them such that the goodwill and reputation of VIP’s
predecessor percolated and spilled into India, since universal or
worldwide goodwill and reputation, sans any evidence of territorial
goodwill and reputation, is no longer the yardstick. As held by the
Co-ordinate Bench, Plaintiff must have customers within the
country of the Defendant, as opposed to persons in the Defendant’s
country who are customers elsewhere. Thus, where Plaintiff’s
business is carried on abroad, it is not enough to show that there
are people in the Defendant’s country who happen to be its
customers when they are abroad. None of the promotional material
or articles placed on record by VIP even obliquely reflect VIP’s
predecessor’s existence in the Indian market till 2004, when VIP
acquired the trademarks and consequential rights and goodwill, by
way of an Assignment Agreement. Some documents, purportedly
advertisements/price lists, reflect their origin dating back to the
1980s and 1990s, but there is no supporting material to show their
awareness amongst customers in India. It must be kept in mind that
in that era, knowledge and awareness of brands was mostly through
travel of people off shores or through electronic/print media as the
online exposure was limited. No documents are found on record
which would evidence sales in India by VIP’s predecessor, in the
form of invoices, bills, delivery documents, photographs of stores
displaying the products, etc. under the trademark CARLTON. VIP
has laboured to piggyback on the advertisements and sales figures
of its umbrella brand VIP in a misdirected effort to generate
goodwill, however, that cannot aid VIP as the test here would be
goodwill and reputation generated under the trademark CARLTON
and not VIP.
59. Applying the aforesaid principles culled out by the Court in
BPI Sports LLC (supra), VIP is required to show prima facie at
this stage that it had customers/sales in India for its goods i.e. bags
and other allied goods falling under class 18 under the trademark
CARLTON, prior to Carlton, as opposed to customers outside the
territorial boundaries of India. It is not enough to show that people
in India were customers of Carlton International PLC, when they
travelled abroad, going by the recent judicial precedents on this
aspect. In a nutshell, VIP is required to prima facie demonstrate the
FAO(OS)(COMM) 151/2023 and another connected matter Page 18 of 82
presence of its mark within Indian boundaries, which, in my
opinion, it has failed to do, at this stage.
60. To substantiate its case, VIP has also placed reliance on
certain articles, advertisements and sales invoices of goods under
the mark CARLTON, post-acquisition of Carlton International
PLC by VIP. However, all that can be said at this stage is that none
of these documents evidence user of the mark CARLTON prior to
the user by Carlton. The earliest sales invoice placed on record by
VIP is dated 11.08.2006, followed by invoices dated 26.10.2006,
31.10.2006, 29.01.2007 and 30.01.2007 and thereafter from
05.11.2012 onwards. Significantly, invoices for the years 2006 and
2007 have no reference to CARLTON. To overcome this lacuna,
pointed out by Carlton during the course of hearing, VIP filed
additional documents vide Index dated 20.05.2022, containing a
list of invoices allegedly reflecting sale of bags and learned Senior
Counsel laboured hard to co-relate the sales, price lists and the
promotional brochures. As an illustration, invoice dated 22.12.2006
annexed at Page No. 1 of the Index dated 20.05.2022, reflects the
category of bag as ‘Airtec’ which finds mention in a price list
annexed at Page 3 and promotional brochures are at Pages 4 to 6.
However, despite this exercise and assuming the stand of VIP to be
correct on its face value that bags were sold under the said
invoices, no mileage can be drawn by VIP from these invoices,
since the earliest invoice even in the additional set of documents
dates back to 22.12.2006, which is well after the earliest sales of
Carlton in India, which according to Carlton goes back to the year
1992/1993. In a nutshell, the documents filed by VIP i.e.
promotional material, articles, sales/tax/import invoices etc. even
cumulatively, do not constitute sufficient spillover into India of the
transborder reputation, so as to defeat the claim of Carlton.
61. Passing off is a tort premised on deceit and involves an
element of confusion among and deception of a mythical customer
who chances on the Defendant’s mark and it goes without saying
that for this, Plaintiff’s reputation is an indispensable element.
Absence or negligible presence of VIP’s goods in question under
the trademark CARLTON in the Indian market space when Carlton
started to occupy the space, defeats VIP’s claim of passing off
against Carlton.
62. Carlton, on the other hand, is ‘first in the Indian market’ in
respect of bags and allied goods falling under class 18 sold under
the trademark CARLTON, territoriality principle having overtaken
the universality doctrine. In the Indian market, prima facie Carlton
has made out a case of prior user and enviable exposure of bags
under the mark CARLTON, which is demonstrable from the
following documents:-
FAO(OS)(COMM) 151/2023 and another connected matter Page 19 of 82
(a) Invoices of sales from the year 2003 from various
shops in different malls in Punjab, Haryana and Rajasthan
as also list of 24 outlets across Delhi, Gurgaon, Noida,
Chandigarh etc. where some sales invoices pertain to the
years 2003 to 2005.
(b) Certificate of Sales figures/revenues under the mark
CARLTON in India for the years 1993-2018.
(c) Articles extensively figuring on various high-profile
magazines and newspapers widely published and circulated
in India such as Cosmopolitan, Femina, Fashion Bloom,
Apparel, Society, Outlook, The Tribune, The Pioneer, HT
City, Business Standard, The Hindu etc. The earliest
promotional material for bags dates back to March, 2004.
(d) Presence on e-commerce platforms available in
India like Myntra, Flipkart, Amazon, etc.
(e) VAT registrations from the year 1993 onwards.
(f) Master data of production under the CARLTON
marks from the year 2003 onwards.
(g) Consumer complaints from the year 2016 onwards
showing actual confusion amongst consumers mistaking
VIP’s products for Carlton’s products.
63. Passing off is a common law remedy based on the ethos and
principles that goodwill in the business must be protected against
misrepresentation by third parties in the course of trade and in
several judgments, Courts have echoed that assertion of the right in
passing off is premised on the ground that no one has a right to
represent his goods or services as that of someone else and even if
misrepresentation is not fraudulent or deliberate but innocent,
Courts would come to the aid and grant injunction to protect the
goodwill. The essential characteristics/elements of the action of
passing off have been succinctly brought out by Lord Diplock in
Erven Warnink BV v J. Townend & Sons (Hull) Ltd
11
and it
would be apposite to refer to them hereunder:
“(1) a misrepresentation, (2) made by a trader in the course
of trade, (3) to prospective customers of his or ultimate
consumers of goods or services supplied by him, (4) which
is calculated to injure the business or goodwill of another
11
[1979] 2 All ER 927
FAO(OS)(COMM) 151/2023 and another connected matter Page 20 of 82
trader (in the sense that this is a reasonably foreseeable
consequence), and (5) which causes actual damage to a
business or goodwill of the trader by whom the action is
brought or in a quiatimet action will probably do so”
64. VIP has prima facie failed to establish spillover of
transborder reputation in India and/or prior user while Carlton is
first in the Indian market and has shown formidable goodwill and
reputation under the trademark CARLTON and its formative
marks. VIP stepped into the market under the mark CARLTON
well after Carlton and knowing the presence and existence of
Carlton in bags in India, adopted phonetically identical and
visually similar trademarks for similar goods, which needless to
say would lead to likelihood of confusion with an unwary
purchaser believing that the bags are sold by Carlton. In fact, in
this case, Carlton has also placed on record material to show that
VIP itself claims launch of its products under CARLTON in 2014
and complaints from customers from 2016 of actual confusion
alleging inferior quality, which though is a matter of trial but does
dent the case of VIP for passing off. No documents supporting
passing off by Carlton have been filed by VIP, per contra.
Therefore, Carlton has made out a prima facie case for grant of
injunction and irreparable loss shall be caused if VIP is not
restrained from selling similar goods under the trademark
CARLTON (word and device). Balance of convenience also lies in
favour of Carlton.
65. VIP relied on judgments on the proposition of ‘first in the
market principle/prior user’. In my view, judgments in S. Syed
Mohideen
12
, Milmet Oftho Industries
13
and Neon Laboratories
Limited
14
, aid the case of Carlton which has been successful in
establishing prior user by way of sales and various other
documents. VIP has also placed reliance on the judgments in Ansul
Industries
15
and Suzuki Motor
16
for dishonest adoption, but these
would also not help, as VIP has failed to make out a case of
dishonest adoption by Carlton. The remaining judgments are on
well settled proposition of law which can hardly be disputed but do
not further the case of VIP in the facts of the present case.”
12
S. Syed Mohideen v P. Sulochana Bai, (2016) 2 SCC 683
13
Milmet Oftho Industries v Allergan Inc., (2004) 12 SCC 624
14
Neon Laboratories Ltd v Medical Technologies Ltd, (2016) 2 SCC 672
15
Ansul Industries v Shiva Tobacco Co., 2007 SCC OnLine Del 74
16
Suzuki Motor v Suzuki (India) Ltd, 2019 SCC OnLine Del 9241
FAO(OS)(COMM) 151/2023 and another connected matter Page 21 of 82
D. Ultimate order
38. Following the above findings, the learned Single Judge has
allowed IA 18443/2019 and has dismissed IA 1369/2020, in the terms
already set out earlier in this judgment.
Rival Contentions of learned Counsel before this Court
Submissions of Mr. Akhil Sibal, on behalf of VIP
A. Priority of user
39. Mr. Sibal submits that the user of the mark CARLTON, to the
extent it is relevant for the present controversy, has to be with respect
to luggage, and not other goods, including footwear. He submits that
VIP’s use of the mark CARLTON, in respect of goods covered by
Class 18 commenced in the UK in the 1980s, much prior to the
commencement of user of the mark CARLTON by CSL in the UK in
1992.
40. Even in India, submits Mr. Sibal, the user of the mark
CARLTON, in respect of luggage, by VIP, is anterior in point of time
to the user of the mark by CSL. He submits that there is no evidence
of use of the mark CARLTON by CSL for luggage at least till 2013.
CSL has placed reliance on the following Flipkart listing of a suitcase,
bearing the CARLTON mark, to assert user of the mark since 2011:
FAO(OS)(COMM) 151/2023 and another connected matter Page 22 of 82
Mr. Sibal submits that, in fact, afore-reproduced Flipkart listing is not
reflect any year. The note “Imported and Sold in Year 2011”, as
contained above the image, is not part of the screenshot, but is a note
entered by CSL. There is, therefore, in fact nothing to indicate that the
above Flipkart listing is of 2011. The finding, of the learned Single
Judge, in the impugned order, to the effect that CSL has produced
evidence of use of the mark CARLTON for luggage in 2011 is,
therefore, incorrect.
41. Even the Master Data of CSL’s products, as filed by CSL itself
in its suit, containing 3524 entries, contains only one lone entry
relating to luggage, of 16 December 2010, of Chinese origin. He has
also drawn our attention to various articles in fashion and travel
magazines, filed by CSL with its suit, and points out that none of them
referred to use of the mark CARLTON for travel luggage. CSL has,
further, placed on record with its suit, invoices dating back to August
FAO(OS)(COMM) 151/2023 and another connected matter Page 23 of 82
2002, but there is no indicator that they refer to luggage.
42. Mr. Sibal has further drawn our attention to the following e-
mails placed on record by CSL, purportedly to show that CSL’s
customers had purchased CARLTON luggage manufactured by VIP
and had complained about its quality, and particularly emphasizes the
responses by CSL to the said emails:
“Support Mail <support@carltonlondon.com>
Feb 24, 2017 3.41 pm
To Amol
Hi Amol,
Thank you for your E-mail.
But you have contacted to Carlton London which is a Brand not
dealing with Travel accessories you much be looking for Carlton
Travel Bag/Carlton Luggage for the solution.
http:/store.carltontravelbags.com
Regards
Carlton London”
“Support Mail <support@carltonlondon.com>”
Wed March 1, 2017 4.54 pm
To Gunjan
Hi Gunjan,
Greetings from Carlton London !
Thank you for contacting Carlton support. We appreciate the
opportunity to assist you.
As per your query, we would like to tell you that we are Carlton
London which is a Footwear brand.
Kindly contact to Carlton Travel bags which is totally different
from us !
FAO(OS)(COMM) 151/2023 and another connected matter Page 24 of 82
http://carltontravelbags.com
Thanks,
Carlton London”
“Support Mail <support@carltonlondon.com>”
Mon June 12, 2017 10.07 am
To captain.brk739
Hi Ramakrishna,
Greetings from Carlton London.
Thank you for writing to Carlton London.
We would like to inform you that we are Carlton London A
footwear brand we don’t deal with travel bags.
You need to contact to Carlton Travel Bags for the same.
“Sujata Ghatneker <sujata. ghatnekar@gmail.com>
Thu, Aug 8 4.18 pm.”
To me
Hello,
I have purchased two suitcases from VIP LOUNGE MG Road,
Pune on 15/6/2019.
One of the large suitcase chain was broken from the (place which
is used to insert in the slot to lock) I was travelling to UK, because
of the lock was open from one side and easily could open chain
from one side as other side was locked someone slid hand inside
the bag and stole the gifts from the bag which were bought for my
friends bk in UK. So immediately I rang to the Pune shop from
where I purchased the bag and told them what has happened, they
advised me to repair the bag in UK but I did not wanted to as I
purchased in Pune, after reaching to Pune I gave them the bag for
replacement of the chain but I want to know if this has happened
once for new bag how can one trust it will not become again ?
I lost my few clothes and gifts, who is going to repay ?
Here after I will NEVER recommend anyone to buy Carlton
London bags.
FAO(OS)(COMM) 151/2023 and another connected matter Page 25 of 82
I am sending you the snapshot of bill.
Hoping to get back the reply.
Thanking you
Mrs Sujata.
Sent from my iPhone
“Support Mail <support@carltonlondon.com>”
Fri, Aug 9, 10.00 am
To Sujata
Hi Sujata,
Greeting from Carlton London.
Please contact Carlton Travel bags we don’t deal in Suitcase.
The responses, from CSL, to the above complaints, points out Mr.
Sibal, clearly indicated that CSL was not involved in the manufacture
of bags, luggage and the like under the mark CARLTON, which was
essentially a footwear brand. In fact, in its responses, CSL redirected
the complainants to VIP.
43. Thus, contends Mr. Sibal, CSL is not in the business of luggage,
using the CARLTON brand since 2011, as contended by it and as
found by the learned Single Judge. In fact, CSL did not commence use
of the mark CARLTON for luggage for 13 years after use of the same
mark for luggage, by VIP, had commenced. Even on the date of filing,
by VIP, of CS (Comm) 52/2020, CSL was not using the mark
CARLTON for luggage.
44. Even in its response, dated 25 November 2019, to the cease-
FAO(OS)(COMM) 151/2023 and another connected matter Page 26 of 82
and-desist notice dated 10 October 2019 issued by VIP, CSL did not
state that it was using the mark CARLTON for luggage.
45. Even while accepting, in the impugned judgment, user, by VIP,
of the CARLTON mark, for luggage, since 2006, the learned Single
Judge has referred to in article on the website mtholyoke.edu, in which
it is stated that Radhika Piramal, the managing director of VIP, had
“launched Carlton luggage, which is aimed at premium business
travellers, in 2014.” Mr. Sibal submits that this statement, as contained
in this article, is incorrect. He further submits that the learned Single
Judge ought not to have relied on the said article, which merely
figures on a third-party website. He points out that VIP has placed, on
record, invoices, certificates of Chartered Accountants, advertisements
and figures of the revenues earned by it and expended by it, which
indicate that it has expanded into the luggage business, under the
CARLTON brand, in 2006.
46. Thus, as VIP can claim use of the CARLTON mark for luggage
since 2004 and at least since 2006, and the user, by CSL, of the
CARLTON mark, for luggage, is in any case not before 2013, VIP
enjoys priority of use of the CARLTON mark, for luggage, in India.
B. Goodwill of VIP in CARLTON mark for luggage
47. Apropos VIP’s goodwill in the CARLTON mark for luggage,
Mr. Sibal refers to
(i) articles in major newspapers in India in 2004, which
widely reported the acquisition of the Carlton brand by VIP,
FAO(OS)(COMM) 151/2023 and another connected matter Page 27 of 82
(ii) invoices placed on record by VIP, dating back to 2006,
reflecting sale of Carlton travel luggage,
(iii) certified sales figures filed by VIP for its Carlton travel
luggage and
(iv) Annual Reports of VIP for the years 2003-2004, 2004-
2005 and 2005-2006, reflecting the used by VIP for the mark
CARLTON for private luggage in India.
Mr. Sibal submits that, in the impugned judgment, the learned Single
Judge has in any case proceeded on the premise that VIP has been able
to establish its use of the CARLTON mark for luggage since 2006.
C. Re. finding of goodwill in CARLTON mark as used by CSL
48. Mr. Sibal next addresses para 62 of the impugned judgment
which, in fact, is a self-contained paragraph, returning positive
findings in favour of CSL regarding accumulation of goodwill and
reputation in its CARLTON mark. The learned Single Judge has relied
on (i) sale invoices dating back to 2003 from different outlets in
Punjab, Haryana and Rajasthan, along with sales invoices for the years
2003 to 2005 across 24 outlets in Delhi, Gurgaon, Noida and
Chandigarh, (ii) certificates of sales figures/revenues, using the mark
CARLTON in India for the period 1993 to 2018, (iii) articles
extensively figuring on high-profile magazines and periodicals, with
the earliest promotional material for bags dating back to March 2004,
(iv) presence on e-commerce platforms, (v) VAT registrations from
1993, (vi) the Master Data of production under the CARLTON marks
from 2003 onwards and (vii) consumer complaints dating back to
2016, reflecting actual confusion among consumers as a result of the
FAO(OS)(COMM) 151/2023 and another connected matter Page 28 of 82
co-existing CARLTON marks. Mr. Sibal submits that this data
essentially pertains to sale of handbags and purses, which cannot be
treated as alike or cognate to luggage, in respect of which VIP is
claiming exclusivity for use of the CARLTON mark. He submits that
VIP does not deal in handbags or purses.
49. In fact, submits Mr. Sibal, CSL has not even pleaded that it was
the first user of the mark CARLTON for travel luggage in India. Nor
has it placed, on record, any sales figures reflecting use, by it, of the
mark CARLTON for travel luggage in India. The Master Data
showing sales, by CSL, of its products, contained 3524 entries, of
which only one entry, at S. No. 2047, referred to Carlton luggage, of
Chinese origin. Even this entry did not indicate sale of Carlton
luggage in India. The Flipkart listing, on which CSL placed reliance,
was undated.
50. Specifically adverting to the consumer complaints on with CSL
places reliance, Mr. Sibal submits that the learned Single Judge, while
relying on the complaints filed by CSL, has not taken stock of CSL’s
responses to the complaints, in which they categorically admitted that
they were not dealing in luggage under the CARLTON mark.
Moreover, submits Mr. Sibal, an allegation of passing off, in order to
sustain, would require evidence that consumers were purchasing VIP’s
goods, believing them to be CSL’s. The consumer complaints do not
evidence any such mistaken purchase. They, therefore, are of no
assistance in substantiating CSL’s allegation of passing off against
VIP.
FAO(OS)(COMM) 151/2023 and another connected matter Page 29 of 82
51. Besides, submits Mr. Sibal, handbags and purses could not be
regarded as allied or cognate to travel luggage. He relies, for this
purpose, on the tests to determine whether goods are allied or cognate,
as contained in para 51 to 53 of the judgment of this Court in FDC
Ltd v Docsuggest Healthcare Services Pvt Ltd
17
, which include the
nature of goods, the usage of the mark, the trade channels through
which the goods were sold, etc. He submits that ladies’ handbags and
purses are in the nature of fashion accessories, and could not be
treated as allied and cognate to travel luggage.
52. Even if it were to be presumed that ladies’ handbags and purses
were allied and cognate to travel luggage, Mr. Sibal submits that CSL
has not established the requisite goodwill in use, by it, of the
CARLTON mark for ladies’ handbags or purses, as is necessary to
make out a case of passing off. CSL has not provided any sales figures
relating to sales of CARLTON handbags or purses. The Central Sales
Tax registration dated 10 June 1993, placed on record by CSL, also
does not evidence use of the CARLTON mark for handbags or purses.
Mr. Sibal relies on para 8 of the plaint in CS (Comm) 730/2019 filed
by CSL, in which it has averred that it had sold 10,000 bags or
accessories. Such sale, over a period of 27 years, amounted to
approximately 370 bags or accessories annually. Besides, no breakup
of these sales had been provided. These sales could not, therefore, be
treated as representing the requisite goodwill of use, by CSL, of the
CARLTON mark for handbags or purses, as could sustain a case of
passing off, on the basis of which VIP could be injuncted from using
the CARLTON mark for luggage. A few sporadic invoices and old
17
2017 SCC OnLine Del 6381
FAO(OS)(COMM) 151/2023 and another connected matter Page 30 of 82
advertisements could not establish the requisite degree of goodwill.
D. Re. CSL’s goodwill in use of the CARLTON mark for footwear
53. Mr. Sibal submits that, at the highest, CSL had been able to
show, prima facie, prior user in India of the mark CARLTON only for
footwear, with miniscule use for handbags and purses. No priority of
use of the mark CARLTON, for luggage, had been shown by CSL.
54. Mr. Sibal submits that, to succeed in a case of passing off,
based on prior use of the concerned mark for goods which were
different from the goods in respect of which the defendant used the
mark, the degree of goodwill which was required to be established by
the plaintiff was much higher, and akin to the degree of goodwill
envisaged by Section 29(4)
18
of the Trade Marks Act. This would
require the plaintiff to show that the mark was akin to a household
name and had acquired such strong secondary significance that any
use of the said mark even for different goods resulted in passing off.
Mr. Sibal submits that a passing off action does not enforce the right
of the property in the trademark which is sought to be protected, but
the goodwill which attaches to the business conducted under such
trademark. In his words, “to extend the protection to business which
was never conducted under the said trademark and qua which no
18
(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person
using by way of permitted use, uses in the course of trade, a mark which—
(a) is identical with or similar to the registered trade mark; and
(b) is used in relation to goods or services which are not similar to those for which the trade
mark is registered; and
(c) the registered trade mark has a reputation in India and the use of the mark without due
cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the
registered trade mark.
FAO(OS)(COMM) 151/2023 and another connected matter Page 31 of 82
goodwill exists, requires an extremely high threshold of goodwill to
be met.” He relies, for this purpose, on
(i) paras 22 to 29 of the judgment of a learned Single Judge
of this Court in Beiersdorf A.G. v Ajay Sukhwani
19
, which,
according to him, holds that
(a) for establishing a case of passing off, the
goodwill/reputation has to be shown to exist in the
product/service in respect of which the mark is used, and
not merely in the mark alone,
(b) else, the standard of goodwill/reputation to be
shown to exist in the mark would be much higher and
(c) the plaintiffs would have to prove
misrepresentation by the defendant, even if innocent,
(ii) paras 28 and 53 to 60 of the judgment of a learned Single
Judge of this Court in Mittal Electronics v Sujata Home
Appliances (P) Ltd
20
, and
(iii) para 13 to 15 of the judgment of a learned Single Judge
of this Court in Mind Gym Ltd v Mindgym Kids Library Pvt
Ltd
21
.
E. Re. finding of dishonest adoption of CARLTON mark by VIP
55. Mr. Sibal next refers to the finding, of the learned Single Judge,
in para 64 of the impugned judgment, in which it is held that “VIP
stepped into the market under the mark CARLTON well after Carlton
and knowing the presence and existence of Carlton in banks in India,
19
2008 SCC OnLine Del 1226
20
2020 SCC OnLine Del 2658
FAO(OS)(COMM) 151/2023 and another connected matter Page 32 of 82
adopted phonetically identical and visually similar trademarks for
similar goods, which needless to say would lead to likelihood of
confusion with an unwary purchaser believing that the bags were sold
by Carlton.” He submits that the “bags in India”, to which the learned
Single Judge refers and in respect of which CSL was using the
CARLTON mark, were not luggage and, therefore, the goodwill
amassed by CSL in respect of the CARLTON mark was irrelevant for
the purposes of the present case, in which VIP is asserting its
entitlement to exclusive use of the CARLTON mark for luggage.
56. Inasmuch as Raxvale was the first and prior adopter of the
CARLTON mark worldwide, and VIP was the first and prior user of
the CARLTON mark for travel luggage in India, it could not be said
that there was any dishonest adoption, by VIP, of the CARLTON
mark. In this context, Mr. Sibal relies on paras 9 and 10 of the
judgment of the Supreme Court in Neon Laboratories v Medical
Technologies Ltd
22
.
57. Although interim injunction could be granted even in the case
of innocent misrepresentation by the defendants, Mr. Sibal submits
that, for that purpose, the degree of goodwill shown by the plaintiffs to
have been established in the mark was relevant. Mere confusion in the
market would be insufficient to justify injunction in such a case. Any
confusion, even if it existed, had to link itself to misrepresentation on
the part of the defendant.
21
2014 SCC OnLine Del 1240
22
(2016) 2 SCC 672
FAO(OS)(COMM) 151/2023 and another connected matter Page 33 of 82
F. Misrepresentation and dishonesty on CSL’s part
58. Mr. Sibal submits that, in fact, it is CSL which was resorting to
misrepresentation and dishonestly attempting to capitalize on VIPs
reputation. Having never used the CARLTON mark for luggage, CSL,
after VIP had acquired a reputation in that regard, was seeking to
expand its business into the area of travel luggage. In view of the prior
goodwill earned by VIP for use of its CARLTON mark for travel
luggage, this amounted to misrepresentation by CSL and satisfied the
test of passing off, as urged by VIP in its suit before the learned Single
Judge.
G. Delay
59. CSL, submits Mr. Sibal, would also be disentitled to any
injunctive relief on the ground of delay. In 2019/2020, when the cross-
suits were filed by CSL and VIP against each other, he points out that
CSL had yet to commence the use of the mark CARLTON for
luggage, whereas VIP had been using the mark CARLTON for travel
luggage since 2004. CSL was well aware of the said use and had sat
back and allowed VIP to continue to use the mark for 15 years, before
seeking to capitalize on VIPs reputation by itself venturing into the
travel luggage segment. This amounted to a dishonest attempt at
taking advantage of the already established goodwill of VIP in the
market. Mr. Sibal cites, in this context, para 19 of the judgment of this
Court in BDA Pvt Ltd v Paul P. John
23
.
FAO(OS)(COMM) 151/2023 and another connected matter Page 34 of 82
H. Iniquitous consequence of the impugned judgment
60. Mr. Sibal once again submits that the consequence of the
impugned judgment is that CSL, which has never used the CARLTON
mark for luggage, has now been permitted to use it, whereas VIP,
which has, to its credit, 15 years of usage and goodwill of the
CARLTON mark for luggage, has been injuncted from using it any
further.
61. Mr. Sibal concludes his submissions by relying on
(i) paras 9 and 16 of the judgment of the Supreme Court in
Wander Ltd v Antox India P Ltd
24
,
(ii) para 9 to 11 of the judgment of the Supreme Court in
Neon Laboratories Ltd, and
(iii) para 72 to 78, 80 and 82 of the judgment of one of us (C.
Hari Shankar J), sitting singly, in Khadi and Village Industries
Commission v Girdhar Industries
25
.
Submissions of Mr. Sandeep Sethi, on behalf of CSL
A. Priority of registration and priority of use
62. Mr. Sethi submitted, at the outset, that CSL enjoyed, over VIP,
priority both of registration and of use of the CARLTON mark. Thus,
he points out that CSL was the registered proprietor of the CARLTON
mark in Class 18 since 1994, and was commercially exploiting the
23
2008 SCC OnLine Del 799
24
1990 Supp SCC 727
FAO(OS)(COMM) 151/2023 and another connected matter Page 35 of 82
mark since 2003, whereas VIP claimed user of the CARLTON mark
in India since 2004, possessed a registration of the mark, in Class 18,
of 1995 and had filed its earliest invoice, representing use of the mark,
of 2015.
63. Mr. Sethi relies, in this context, on the article in the Mount
Holyoke Journal, which records that Radhika Piramal, the managing
director of VIP, was launching Carlton luggage in India only in 2014.
As such, he submits that VIP’s claim of user, by it, of the CARLTON
mark for luggage in 2004, was false. He also relies, in this context, on
the Annual Reports of VIP for the years 2010-2011 and 2011-2012,
which were sought to be placed on record by way of CM 55611/2023,
and which contain the following recitals:
From the Annual Report for 2010-2011
“C. SEGMENT/PRODUCT WISE PERFORMANCE
LUGGAGE
Your Company has segmented the market and clearly defined the
role for each of its 6 brands in the category. CARLTON has been
introduced through soft launch in November 2010 across premium
distribution channel. Initial response has been very encouraging.
Its positioning as international stylish premium brand from
England has been well received.”
From the Annual Report for 2011-2012
“After soft launch in November 2010, your Company rolled out
complete collection of Carlton brand in India in April 2011. The
brand has been supported with various marketing activities mainly
press campaigns, airport branding and Jet airline baggage tags.
Your Company has also opened two Carlton Monobrand stores in
premium locations in Delhi which helped showcase the brand in
the right ambience. The response in these stores has been very
encouraging and more stores are planned for the current year in the
25
2023 SCC OnLine Del 8446
FAO(OS)(COMM) 151/2023 and another connected matter Page 36 of 82
cities of Mumbai and Bangalore.”
Thus, submits Mr. Sethi, VIP can certainly not claim use of the
CARTON mark, even for luggage, since 2004. We may note, here,
that CM Appl 55611/2023 was allowed by this Court by order dated
30 October 2023.
64. Mr. Sethi further submits that VIP was seeking to prove 2006
user, by it, of the mark CARLTON for luggage on the basis of certain
invoices, none of which makes any reference to the brand CARLTON.
This fact has been correctly noted by the learned Single Judge. In
order to substantiate their claim, VIP was seeking to rely on its
Brochure and Price list, to contend that “AIRTEC”, which was the
brand reflected on the invoices, was a sub-brand of CARLTON.
65. As against this, CSL had placed on record the following sales
figures, for the years 1993-1994 to 2017-2018:
INDIAN SALE FIGURES/REVENUES IN RESPECT OF THE
SALES FOR CARLTON OVERSEAS PVT LTD, INDIA FROM
THE YEARS 1993-2018
Years Sale Figures (in INR)
1993-1994 162,84,730
1994-1995 251,20,421
1995-1996 353,56,904
1996-1997 468,36,223
1997-1998 492,06,288
1998-1999 961,20,379
1999-2000 1138,36,464
2000-2001 1470,23,240
2001-2002 1566,27,502
2002-2003 1345,86,233
2003-2004 2069,76,934
2004-2005 1777,03,453
FAO(OS)(COMM) 151/2023 and another connected matter Page 37 of 82
2005-2006 1999,92,274
2006-2007 2187,25,082
2007-2008 2621,09,222
2008-2009 2952,89,976
2009-2010 3128,35,502
2010-2011 290S,42,743
2011-2012 2754,67,570
2012-2013 4087,72,218
2013-2014 5348,94,015
2014-2015 7403,37,002
2015-2016 8517,23,651
2016-2017 7976,90,892
2017-2018 6753,87,202
The learned Single Judge has, therefore, correctly held that CSL had
succeeded in establishing existence of goodwill, in its favour, of the
CARLTON mark. In this context, Mr. Sethi also draws attention to the
following screenshot, from CSL’s website:
Mr. Sethi further submits that the data placed on record by CSL
indicated that it had 333 stores worldwide, and was operating across
FAO(OS)(COMM) 151/2023 and another connected matter Page 38 of 82
more than 30 online portals. He has drawn our attention to various
articles, referring to CSL, of which some pertain to the use of the
CARLTON mark for bags. One such article is from the 26 February
2004 edition of The Hindu, and reads thus:
“CARLTON LONDON has introduced Coordinated Bags and
Shoes. The range includes a wide array of ornate sandals with
studded straps, the court shoes in pencil and block heels and formal
sandals with high pencil heels. It has also launched bags
coordinated with each of its footwear. The collection comes in
novel styles, to suit the ever-changing fashion moods. The shoes
and bags are available at prices between Rs.595 and 3995 at its
exclusive outlets in Metropolitan Mall, Google and Centrestage
Mall, Noida.”
B. The concept of “goodwill”
66. Mr. Sethi submits that the concept of goodwill, as postulated by
Mr. Sibal, is flawed. He submits that goodwill relates to the reputation
of a business entity, and may have nothing to do with either the goods
manufactured or the services provided by the business. Goodwill may
even arise from corporate social responsibility compliances.
67. Moreover, submits Mr. Sethi, a case of passing off, in order to
sustain, does not require establishment of reputation or goodwill of a
great degree. The mere existence of reputation is sufficient. The
judgment of the Supreme Court in Laxmikant V. Patel v Chetanbhai
Shah
26
, he points out, involved a small shop. Goodwill, therefore,
attaches to the mark and indicates that the mark is a source identifier
of its user.
FAO(OS)(COMM) 151/2023 and another connected matter Page 39 of 82
C. Re. VIP’s goodwill in the CARLTON mark – No trans-border
reputation shown
68. VIP, points out Mr. Sethi, was claiming to have purchased its
rights for use of the CARLTON mark from CIPLC. The learned
Single Judge has specifically held, in the impugned judgment, that no
trans-border reputation of the CARLTON mark, as used either by
Raxvale or by CIPLC, had been established. VIP has not chosen to
challenge this finding.
69. On the aspect of trans-border reputation, Mr. Sethi submits that
the learned Single Judge has correctly relied upon the judgment of the
Supreme Court in Toyota.
D. Re. plea that CSL had no reputation or goodwill in the
CARLTON mark for travel luggage
70. Mr. Sethi further submits that, in its cease and desist notice
issued to CSL, VIP had admitted that bags were allied and cognate to
luggage. The opening sentence in Para 5 of its cease and desist notice
dated 10 October 2019 read thus:
“Recently, our Client has come across your product bearing
identical/similar mark ‘CARLTON’ and marks consisting of
CARLTON (“Impugned Mark”) which is being used in relation to
bags and other allied goods falling in Class XVIII which are
identical/similar to the Client’s Goods (“Impugned Goods”).”
Mr. Sethi submits that, therefore, Mr. Sibal cannot be heard to
contend, now, that handbags or purses were not allied or cognate to
travel luggage.
26
(2002) 3 SCC 65
FAO(OS)(COMM) 151/2023 and another connected matter Page 40 of 82
71. Insofar as the goodwill and reputation earned by it, for use of
the CARLTON mark for bags were concerned, Mr. Sethi submits that
CSL had placed on record invoices and Government documents in the
form of VAT registrations, Sales Tax registrations and Central Excise
registrations. The VAT registration was of 10 June 1993, CST
Assessment Order was of 3 June 1996, Sales Tax registration was of 9
April 1997 and Central Excise registration was of 19 May 1997. CSL
had also produced invoices dating back to 2003 as well as the Flipkart
listing of luggage manufactured by CSL, bearing the CARLTON
mark, of 2011.
72. CSL had also placed on record proof of actual customer
confusion in the form of complaints addressed to it. The genuineness
and veracity of these complaints was not questioned by VIP. Apropos
Mr. Sibal’s contention that these complaints did not evidence
confusion at the stage of purchase of the products, and merely
indicated that the customers may have contacted the wrong person, he
submits that even this would suffice to make out a case of confusion
by use of identical marks. These complaints, as addressed by
consumers, also evidenced brand dilution, by the use, by VIP, of the
CARLTON mark for luggage.
E. Misrepresentation
73. In order to prove misrepresentation, Mr. Sethi submits that it
was enough for CSL to show that VIP was improperly using the
CARLTON mark, with respect to which CSL enjoyed priority of user.
FAO(OS)(COMM) 151/2023 and another connected matter Page 41 of 82
It was not required for CSL to prove actual misrepresentation on the
part of VIP. The very fact that, owing to use of the CARLTON mark
by VIP, CSL suffered brand dilution, was itself sufficient to entitle
CSL to damages.
F. Balance of convenience
74. Apropos balance of convenience, Mr. Sethi submits that the
balance of convenience was clearly in favour of grant of injunction to
CSL, rather than denial thereof. He submits that Carlton was CSL’s
corporate name, and was its only brand. As against this, CARLTON,
in the case of VIP, was merely a sub-brand of “VIP”, which was its
flagship brand. Moreover, “Carlton” did not form part of the corporate
name of VIP. The Annual Report of VIP indicated that it was using
six other trademarks. The degree of damage, therefore, was much
more in the case of CSL, than of VIP.
G. Re. Relief granted by the impugned judgment
75. Mr. Sethi submits that no legitimate grievance can be raised
against the impugned judgment, which grants interlocutory injunction
consequent on the finding that (i) CSL was the prior user of the
CARLTON mark, (ii) CSL was the prior registrant of the CARLTON
mark, (iii) VIP, when it started using the mark CARLTON for
luggage, was aware of the pre-existing user of the same mark by CSL
and (iv) there was no evidence of trans-border reputation. These
considerations, he submits, are sufficient to justify grant of injunction.
FAO(OS)(COMM) 151/2023 and another connected matter Page 42 of 82
H. Re. Delay
76. Mr. Sethi further submits that the plea of delay could not be a
ground to challenge the grant of injunction by the learned Single
Judge and cites, in this context, para 16 of the judgment of the
Supreme Court in Heinz Italia v Dabur India Ltd
27
.
77. In support of his submissions, Mr. Sethi places reliance on
(i) para 31.1, 31.2 and 36 of Syed Mohideen,
(ii) paras 8 to 12 of Laxmikant V. Patel,
(iii) para 31 of Satyam Infoway Ltd v Siffynet Solutions Pvt
Ltd
28
,
(iv) paras 26, 28 and 33 of Toyota and
(v) paras 81 and 92 of T.V. Venugopal v Ushodaya
Enterprises Ltd
29
.
Submissions of Mr. Sibal by way of rejoinder
78. Arguing in rejoinder, Mr. Sibal submits that all documents of
user, placed on record by CSL and relied upon by the learned Single
Judge, pertain to handbags or purses, and not luggage. He reiterates
his contention that handbags and purses are fashion accessories, and
cannot be analogised to luggage. He further points out, once again,
that there is no finding, in the impugned judgment, that handbags and
purses are allied and cognate to travel luggage. In fact, the responses,
by CSL, to the alleged consumer complaints received by it, clearly
27
(2007) 6 SCC 1
28
(2004) 6 SCC 145
29
(2011) 4 SCC 85
FAO(OS)(COMM) 151/2023 and another connected matter Page 43 of 82
stated that CSL was not involved in the business of luggage. No
evidence of actual sale of any luggage in India has been produced by
CSL.
79. Regarding user, Mr. Sibal relies on VIP’s Annual Reports for
the year 2003-2004 to 2005-2006, which he sought to place on record
by way of CM 8462/2004 (which was allowed vide order dated 17
January 2025). He refers to the following recitals in the said Annual
Reports:
From the 2003-2004 Annual Report
“Working Capital
Company’s continued efforts in improving working capital
management coupled with mobilisation of low-cost debt as
resulted in substantial savings in interest cost. Higher profits and
reduction in working capital has translated into steady cash flows
which have been used to partly fund the acquisition of well-known
international luggage brand ‘CARLTON’ and certain other assets.
This Brand is expected to be the future growth driver particularly
for exports.”
From the 2004-2005 Annual Report
“EXPORTS
The Exports for the year at ₹ 36.54 crores were higher by 145.07%
over the previous year (₹ 14.91 Crores). the setting up of wholly-
owned subsidiary Carlton Travel Goods Ltd in UK and acquisition
of well-known luggage brand CARLTON has helped the Company
in accelerating the exports particularly in the European Union and
other International markets.”
Mr. Sibal submits that, in view of Section 56
30
of the Trade Marks
30
56. Use of trade mark for export trade and use when form of trade connection changes. –
(1) The application in India of trade mark to goods to be exported from India or in relation to
services for use outside India and any other act done in India in relation to goods to be so exported
or services so rendered outside India which, if done in relation to goods to be sold or services
FAO(OS)(COMM) 151/2023 and another connected matter Page 44 of 82
Act, use of the CARTON mark for luggage which was to be exported
would also constitute “use” of the mark for the purposes of the Trade
Marks Act. The 2005-2006 Annual Report of VIP also states, under
the head “HIGHLIGHTS”, that “the Carlton Brand was launched in
India in June 2006 in high-quality showrooms”. In the “Products At A
Glance” caption in the said Annual Report, CARLTON is indicated as
an entirely separate brand of VIP, apart from the “VIP” brand itself.
80. Answering the doubt that Mr. Sethi has sought to cast on the
2006 user claim of VIP for the CARTON mark for luggage, Mr. Sibal
points out that the invoice dated 22 December 2006 refers to the
“AIRTEC” brand, which was merely a sub-brand of CARLTON. He
has referred, in this context, to VIP’s Price List, which reflects
AIRTEC as a sub- brand of Carlton and also shows a piece of luggage
containing both the marks.
81. Mr. Sibal, therefore, reiterates his submission that, in respect of
luggage, VIP enjoys priority of user of the CARLTON brand, with
effect from 2006. Relying on paras 22 to 28 of the judgment of a
Division Bench of this Court in Intex Technologies (India) Ltd v AZ
Tech (India)
31
, Mr. Sibal submits that, to succeed in its claim of
passing off against VIP, CSL would have had to show goodwill
existing in handbags at the time when VIP started using the
CARLTON mark for luggage. He also relied, in this context, on
(i) paras 13 and 23 of the judgment of the Division Bench of
provided or otherwise traded in within India would constitute use of trade mark therein, shall be
deemed to constitute use of the trade mark in relation to those goods or services for any purpose for
which such use is material under this Act or any other law.
31
239 (2017) DLT 99 (DB)
FAO(OS)(COMM) 151/2023 and another connected matter Page 45 of 82
this Court in Turning Point v Turning Point Institute Pvt Ltd
32
and
(ii) paras 20 and 27 of the judgment of the learned Single
Judge of this Court in Lowenbrau AG v Jagpin Breweries
Ltd
33
.
82. On the aspect of confusion, Mr. Sibal submits that mere
confusion is not enough to sustain a claim of passing off, and that the
confusion must be the outcome of misrepresentation by the defendant.
He relies, for this purpose, on the judgment of the Chancery Division
of the UK in HFC Bank plc v Midland Bank plc
34
and paras 70 and
73 of the decision of the House of Lords in Reckitt & Colman
Products Ltd v Borden Inc.
35
In the present case, submits Mr. Sibal,
it cannot be stated, in any event, that any confusion had resulted on
account of misrepresentation by VIP, as it had been using the mark
CARLTON, as a prior user for luggage the world over.
83. Moreover, submits Mr. Sibal, no confusion had been shown to
have existed at the point-of-sale of the goods, as a consequence of the
use, by VIP, of the mark CARLTON for luggage. CSL was required
to show initial interest confusion. The emails, on which CSL relied,
only showed confusion having arisen at a later stage owing to the
commonality of the names of the products. In support of the
submission, Mr. Sibal relies on the decision of the Chancery Division
of the UK High Court in Philip Warren & Son Ltd v Lidl Great
32
2018 SCC OnLine Del 10257
33
157 (2009) DLT 791
34
[2000] FSR 176
35
[1990] RPC 341
FAO(OS)(COMM) 151/2023 and another connected matter Page 46 of 82
Britain Ltd
36
.
Analysis
A. Re. infringement
84. Both sides have proceeded on the premise that, as the mark
CARLTON, whether as a word mark or a device mark, is registered in
favour of CSL as well as VIP under the Trade Marks Act, neither
CSL, nor VIP, could maintain a case of infringement against the other.
This finding of the learned Single Judge has not, therefore, been
questioned by either side.
85. In any event, the finding is clearly in sync with Section 28(3) of
the Trade Marks Act, which proscribes a registered holder of
trademark from claiming exclusivity, in respect of the mark, against
any other person who may also be a registered holder of the same, or
of a deceptively similar, trademark, while preserving the rights of
each such registered trademark holder to claim exclusivity, for use of
the mark, against any third person who is not a registered holder of the
same, or of a deceptively similar, trademark.
86. Moreover, Section 30(2)(e)
37
of the Trade Marks Act
specifically excludes, from the ambit of “infringement”, the use of a
trademark by its registered proprietor, by virtue of the registration so
36
[2021] EWHC 1097 (Ch)
37
(2) A registered trade mark is not infringed where—
*****
(e) the use of a registered trade mark, being one of two or more trade marks registered under
this Act which are identical or nearly resemble each other, in exercise of the right to the use of that
trade mark given by registration under this Act.
FAO(OS)(COMM) 151/2023 and another connected matter Page 47 of 82
held, and protects such use from any injunctive attempt by any third
party.
87. There cannot, therefore, be an action for injunction, on the
ground of infringement, against the registered proprietor of a
trademark. The learned Single Judge has, therefore, correctly rejected
the rival claims of infringement, and we affirm and uphold the said
decision.
B. Ingredients of passing off
88. As the learned Single Judge has correctly held, therefore, it is
only to be seen whether either side could successfully maintain a case,
against the other, or passing off. If it can, it is entitled to an injunction
against the use, by the other, of the CARLTON mark, as sought. If it
cannot, neither side would be entitled to an injunction, and both suits
must fail. At the present stage, of course, as we are concerned only
with the applications for interlocutory injunction, both applications
would have to be dismissed.
89. The learned Single Judge has, in the impugned judgment, held,
however, that, while VIP cannot successfully maintain a case of
passing off, against CSL, CSL can. Following this conclusion, the
learned Single Judge has granted interlocutory injunction in favour of
CSL, and against VIP, from use of the mark CARLTON, for goods
covered by Class 18.
FAO(OS)(COMM) 151/2023 and another connected matter Page 48 of 82
90. To assess the correctness of the said decision, one must first
understand the exact ingredients of passing off, as a common law tort.
91. Over six decades ago, the Supreme Court had, in its decision in
Kaviraj Pandit Durga Dutt Sharma v Navaratna Pharmaceutical
Laboratories
38
– which has, over time, acquired the status of locus
classicus on the issue – identified the distinct ingredients of the
statutory tort of infringement and the common-law tort of passing off,
thus:
“28. The other ground of objection that the findings are
inconsistent really proceeds on an error in appreciating the basic
differences between the causes of action and right to relief in suits
for passing off and for infringement of a registered trade mark and
in equating the essentials of a passing off action with those in
respect of an action complaining of an infringement of a registered
trade mark. We have already pointed out that the suit by the
respondent complained both of an invasion of a statutory right
under Section 21 in respect of a registered trade mark and also of a
passing off by the use of the same mark. The finding in favour of
the appellant to which the learned counsel drew our attention was
based upon dissimilarity of the packing in which the goods of the
two parties were vended, the difference in the physical appearance
of the two packets by reason of the variation in the colour and
other features and their general get-up together with the
circumstance that the name and address of the manufactory of the
appellant was prominently displayed on his packets and these
features were all set out for negativing the respondent's claim that
the appellant had passed off his goods as those of the respondent.
These matters which are of the essence of the cause of action for
relief on the ground of passing off play but a limited role in an
action for infringement of a registered trade mark by the registered
proprietor who has a statutory right to that mark and who has a
statutory remedy for the event of the use by another of that mark or
a colourable imitation thereof. While an action for passing off is a
Common Law remedy being in substance an action for deceit, that
is, a passing off by a person of his own goods as those of another,
that is not the gist of an action for infringement. The action for
infringement is a statutory remedy conferred on the registered
proprietor of a registered trade mark for the vindication of the
exclusive right to the use of the trade mark in relation to those
38
AIR 1965 SC 980
FAO(OS)(COMM) 151/2023 and another connected matter Page 49 of 82
goods” (Vide Section 21 of the Act). The use by the defendant of
the trade mark of the plaintiff is not essential in an action for
passing off, but is the sine qua non in the case of an action for
infringement. No doubt, where the evidence in respect of passing
off consists merely of the colourable use of a registered trade mark,
the essential features of both the actions might coincide in the
sense that what would be a colourable imitation of a trade mark in
a passing off action would also be such in an action for
infringement of the same trade mark. But there the correspondence
between the two ceases. In an action for infringement, the plaintiff
must, no doubt, make out that the use of the defendant's mark is
likely to deceive, but where the similarity between the plaintiff's
and the defendant's mark is so close either visually, phonetically or
otherwise and the court reaches the conclusion that there is an
imitation, no further evidence is required to establish that the
plaintiff's rights are violated. Expressed in another way, if the
essential features of the trade mark of the plaintiff have been
adopted by the defendant, the fact that the get-up, packing and
other writing or marks on the goods or on the packets in which he
offers his goods for sale show marked differences, or indicate
clearly a trade origin different from that of the registered proprietor
of the mark would be immaterial; whereas in the case of passing
off, the defendant may escape liability if he can show that the
added matter is sufficient to distinguish his goods from those of the
plaintiff.”
(Emphasis supplied)
92. The Supreme Court has, in the following paras from its
comparatively recent decision in Brihan Karan Sugar Syndicate (P)
Ltd v Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana
39
,
explained the principle of passing off:
“12. There is a finding recorded by the High Court in the
impugned judgment that the labels used on the bottle of country
liquor sold by the appellant and the labels on the bottle of country
liquor sold by the respondent are similar. At this stage, we may
note the legal position regarding the factual details which are
required to be proved in a passing off action. Firstly, we may refer
to a decision of this Court in Satyam Infoway Ltd. v Siffynet
Solutions (P) Ltd. Paras 13 to 15 of the said decision read thus:
“13. The next question is, would the principles of trade
39
(2024) 2 SCC 577
FAO(OS)(COMM) 151/2023 and another connected matter Page 50 of 82
mark law and in particular those relating to passing off
apply? 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 trade mark 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 trader who is able to
establish prior user 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.
14. The second element that must be established by a
plaintiff in a passing off action is misrepresentation by the
defendant to the public. The word “misrepresentation” does
not mean that the plaintiff has to prove any mala fide
intention on the part of the defendant. Of course, if the
misrepresentation is intentional, it might lead to an
inference that the reputation of the plaintiff is such that it is
worth the defendant's while to cash in on it. An innocent
misrepresentation would be relevant only on the question of
the ultimate relief which would be granted to the
plaintiff Cadbury-Schweppes (Pty) Ltd. v PUB Squash Co.
(Pty) Ltd.
40
, Erven Warnink Besloten Vennootschap v J.
Townend & Sons (Hull) Ltd.
41
. 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”.
15. The third element of a passing off action is loss or
the likelihood of it.”
(emphasis supplied)
13. Thus, the volume of sale and the extent of advertisement
40
(1981) 1 WLR 193
41
(1979) 3 WLR 68
FAO(OS)(COMM) 151/2023 and another connected matter Page 51 of 82
made by the appellant of the product in question will be a relevant
consideration for deciding whether the appellant had acquired a
reputation or goodwill.
14. At this stage, we may also refer to the decision of this
Court in Toyota Jidosha Kabushiki Kaisha. In this decision, this
Court approved its earlier view in S. Syed Mohideen v P.
Sulochana Bai that the passing off action which is premised on the
rights of the prime user generating goodwill, shall remain
unaffected by any registration provided in the Act. In fact, this
Court quoted with approval, the view taken by the House of Lords
in Reckitt & Colman Products. The said decision lays down triple
tests. One of the tests laid down by the House of Lords was that the
plaintiff in a passing off action has to prove that he had acquired a
reputation or goodwill connected with the goods. Thereafter, in
para 40 of Toyota, this Court held that if goodwill or reputation in
a particular jurisdiction is not established by the plaintiff, no other
issue really would need any further examination to determine the
extent of the plaintiff's right in the action of passing off.”
(Italics in original; underscoring supplied)
93. In the annals of passing off jurisprudence, and the relief to be
granted where passing off is found to exist, the judgment of the
Supreme Court in Laxmikant V. Patel remains an important
watermark. We may reproduce, to advantage, the following passages
from the said decision:
“10. A person may sell his goods or deliver his services such as
in case of a profession under a trading name or style. With the
lapse of time such business or services associated with a person
acquire a reputation or goodwill which becomes a property which
is protected by courts. A competitor initiating sale of goods or
services in the same name or by imitating that name results in
injury to the business of one who has the property in that name.
The law does not permit any one to carry on his business in such a
way as would persuade the customers or clients in believing that
the goods or services belonging to someone else are his or are
associated therewith. It does not matter whether the latter person
does so fraudulently or otherwise. The reasons are two. Firstly,
honesty and fair play are, and ought to be, the basic policies in the
world of business. Secondly, when a person adopts or intends to
adopt a name in connection with his business or services which
already belongs to someone else it results in confusion and has
propensity of diverting the customers and clients of someone else
FAO(OS)(COMM) 151/2023 and another connected matter Page 52 of 82
to himself and thereby resulting in injury.
11. Salmond & Heuston in Law of Torts (20th Edn., at p. 395)
call this form of injury as “injurious falsehood” and observe the
same having been “awkwardly termed” as “passing-off” and state:
“The legal and economic basis of this tort is to provide
protection for the right of property which exists not in a
particular name, mark or style but in an established
business, commercial or professional reputation or
goodwill. So to sell merchandise or carry on business under
such a name, mark, description, or otherwise in such a
manner as to mislead the public into believing that the
merchandise or business is that of another person is a
wrong actionable at the suit of that other person. This form
of injury is commonly, though awkwardly, termed that
of passing-off one's goods or business as the goods or
business of another and is the most important example of
the wrong of injurious falsehood. The gist of the conception
of passing-off is that the goods are in effect telling a
falsehood about themselves, are saying something about
themselves which is calculated to mislead. The law on this
matter is designed to protect traders against that form of
unfair competition which consists in acquiring for oneself,
by means of false or misleading devices, the benefit of the
reputation already achieved by rival traders.”
12. In Oertli v Bowman
42
the gist of passing-off action was
defined by stating that it was essential to the success of any claim
to passing-off based on the use of given mark or get-up that the
plaintiff should be able to show that the disputed mark or get-up
has become by user in the country distinctive of the plaintiff's
goods so that the use in relation to any goods of the kind dealt in
by the plaintiff of that mark or get-up will be understood by the
trade and the public in that country as meaning that the goods are
the plaintiff's goods. It is in the nature of acquisition of a quasi-
proprietary right to the exclusive use of the mark or get-up in
relation to goods of that kind because of the plaintiff having used
or made it known that the mark or get-up has relation to his goods.
Such right is invaded by anyone using the same or some
deceptively similar mark, get-up or name in relation to goods not
of plaintiff. The three elements of passing-off action are the
reputation of goods, possibility of deception and likelihood of
damages to the plaintiff. In our opinion, the same principle, which
applies to trade mark, is applicable to trade name.
42
1957 RPC 388 (CA)
FAO(OS)(COMM) 151/2023 and another connected matter Page 53 of 82
13. In an action for passing-off it is usual, rather essential, to
seek an injunction, temporary or ad interim. The principles for the
grant of such injunction are the same as in the case of any other
action against injury complained of. The plaintiff must prove
a prima facie case, availability of balance of convenience in his
favour and his suffering an irreparable injury in the absence of
grant of injunction. According to Kerly
43
(ibid, para 16.16)
passing-off cases are often cases of deliberate and intentional
misrepresentation, but it is well settled that fraud is not a necessary
element of the right of action, and the absence of an intention to
deceive is not a defence, though proof of fraudulent intention may
materially assist a plaintiff in establishing probability of deception.
Christopher Wadlow in Law of Passing-Off (1995 Edn., at p. 3.06)
states that the plaintiff does not have to prove actual damage in
order to succeed in an action for passing-off. Likelihood of damage
is sufficient. The same learned author states that the defendant's
state of mind is wholly irrelevant to the existence of the cause of
action for passing-off (ibid, paras 4.20 and 7.15). As to how the
injunction granted by the court would shape depends on the facts
and circumstances of each case. Where a defendant has imitated or
adopted the plaintiff's distinctive trade mark or business name, the
order may be an absolute injunction that he would not use or carry
on business under that name (Kerly, ibid, para 16.97).
14. In the present case the plaintiff claims to have been running
his business in the name and style of Muktajivan Colour Lab and
Studio since 1982. He has produced material enabling a finding
being arrived at in that regard. However, the trial court has found
him using Muktajivan as part of his business name at least since
1995. The plaintiff is expanding his business and exploiting the
reputation and goodwill associated with Muktajivan in the business
of colour lab and photo by expanding the business through his wife
and brother-in-law. On or about the date of the institution of the
suit the defendant was about to commence or had just commenced
an identical business by adopting the word Muktajivan as a part of
his business name although till then his business was being run in
the name and style of Gokul Studio. The intention of the defendant
to make use of the business name of the plaintiff so as to divert his
business or customers to himself is apparent. It is not the case of
the defendant that he was not aware of the word Muktajivan being
the property of the plaintiff or the plaintiff running his business in
that name, though such a plea could only have indicated the
innocence of the defendant and yet no difference would have
resulted in the matter of grant of relief to the plaintiff because the
likelihood of injury to the plaintiff was writ large. It is difficult to
subscribe to the logic adopted by the trial court, as also the High
43
Kerly On The Law of Trade Marks and Trade Names, 12
th
Edn
FAO(OS)(COMM) 151/2023 and another connected matter Page 54 of 82
Court, behind reasoning that the defendants’ business was situated
at a distance of 4 or 5 km from the plaintiff’s business and
therefore the plaintiff could not have sought for an injunction. In a
city a difference of 4 or 5 km does not matter much. In the event of
the plaintiff having acquired a goodwill as to the quality of
services being rendered by him, a resident of Ahmedabad city
would not mind travelling a distance of a few kilometres for the
purpose of availing a better quality of services. Once a case of
passing-off is made out the practice is generally to grant a prompt
ex parte injunction followed by appointment of Local
Commissioner, if necessary. In our opinion the trial court was fully
justified in granting the ex parte injunction to the plaintiff based on
the material made available by him to the court. The trial court fell
in error in vacating the injunction and similar error has crept in the
order of the High Court. The reasons assigned by the trial court as
also by the High Court for refusing the relief of injunction to the
plaintiff are wholly unsustainable.
*****
17. We are conscious of the law that this Court would not
ordinarily interfere with the exercise of discretion in the matter of
grant of temporary injunction by the High Court and the trial court
and substitute its own discretion therefor except where the
discretion has been shown to have been exercised arbitrarily or
capriciously or perversely or where the order of the courts under
scrutiny ignores the settled principles of law regulating grant or
refusal of interlocutory injunction. An appeal against exercise of
discretion is said to be an appeal on principle. The appellate court
will not reassess the material and seek to reach a conclusion
different from the one reached by the court below solely on the
ground that if it had considered the matter at the trial stage it
would have come to a contrary conclusion. If the discretion has
been exercised by the trial court reasonably and in a judicial
manner the fact that the appellate court would have taken a
different view may not justify interference with the trial court’s
exercise of discretion (see Wander Ltd. v Antox India (P)
Ltd. and N.R. Dongre v Whirlpool Corpn.
44
). However, the
present one is a case falling within the well-accepted exceptions.
Neither the trial court nor the High Court have kept in view and
applied their mind to the relevant settled principles of law
governing the grant or refusal of interlocutory injunction in trade
mark and trade name disputes. A refusal to grant an injunction in
spite of the availability of facts, which are prima facie established
by overwhelming evidence and material available on record
justifying the grant thereof, occasion a failure of justice and such
44
(1996) 5 SCC 714
FAO(OS)(COMM) 151/2023 and another connected matter Page 55 of 82
injury to the plaintiff as would not be capable of being undone at a
later stage. The discretion exercised by the trial court and the High
Court against the plaintiff, is neither reasonable nor judicious. The
grant of interlocutory injunction to the plaintiff could not have
been refused, therefore, it becomes obligatory on the part of this
Court to interfere.”
(Emphasis supplied)
94. Following the judgments of the Supreme Court in Wockhardt
Ltd v Torrent Pharmaceuticals Ltd
45
, Satyam Infoway and Cadila
Health Care Ltd v Cadila Pharmaceuticals Ltd
46
, this Court,
speaking through one of us (C. Hari Shankar J.), had identified the
following ingredients of passing off, in FDC Ltd v Faraway Foods
(P) Ltd
47
:
“(i) Passing off, though an action based on deceit, does not
require the establishment of fraud as a necessary element to sustain
the action. Imitation or adoption, by the defendant, of the plaintiff's
trade mark, in such manner as to cause confusion or deception in
the mind of prospective customers, is sufficient.
(ii) The principles for grant of injunction, in passing off
actions, are the same as those which govern the grant of
injunctions in other cases i.e. the existence of a prima facie case,
the balance of convenience, and the likelihood of irreparable loss
in issuing to the plaintiff, were injunction not to be granted.
(iii) Proof of actual damage is not necessary, to establish
passing off. However, proof of Misrepresentation is necessary,
even if intent to misrepresent is not approved. The question of
intent may, nevertheless, be relevant, when it comes to the ultimate
relief to be granted to the plaintiff.
(iv) Passing off may be alleged by a claimant who owns
sufficient proprietary interest in the goodwill associated with the
product, which is really likely to be damaged by the alleged
misrepresentation.
(v) Grant of injunction, in cases where passing off is found to
45
(2018) 18 SCC 346
46
(2001) 5 SCC 73
47
2021 SCC OnLine Del 1539
FAO(OS)(COMM) 151/2023 and another connected matter Page 56 of 82
exist, is intended to serve two purposes, the first being preservation
of the reputation of the plaintiff, and the second, safeguarding of
the public against goods which are passed off as those of the
plaintiff.
(vi) The ingredients/indicia of the tort of passing off are the
following:
(a) There must be sale, by the defendant, of
goods/services in a manner which is likely to deceive the
public into thinking that the goods/services are those of the
plaintiff.
(b) The plaintiff is not required to prove long user to
prove established reputation. The existence, or otherwise,
of reputation, would depend upon the volume of the
plaintiff's sales and the extent of its advertisement.
(c) The plaintiff is required to establish:
(i) Misrepresentation by the defendant to the
public, though not necessarily mala fide;
(ii) Likelihood of confusion in the minds of the
public (the public being the potential
customers/users of the product) that the goods of the
defendant are those of the plaintiff, applying the test
of a person of “imperfect recollection and ordinary
memory.”
(iii) Loss, or likelihood of loss.
(iv) Goodwill of the plaintiff, as a prior user.
Elsewhere, the five elements of passing off have been
identified as: (a) misrepresentation; (b) made by the trader
in the course of trade; (c) to prospective customers or
ultimate consumers of the 0goods or services supplied by
him; (d) calculated to injure the business or goodwill of
another (i.e. that such injury is reasonably foreseeable); and
(e) actual damage, or the possibility of actual damage, to
the business or goodwill of the plaintiff.
*****
(x) Passing off differs from infringement. Passing off is based
on the goodwill that the trader has in his name, whereas
infringement is based on the trader's proprietary right in the name,
FAO(OS)(COMM) 151/2023 and another connected matter Page 57 of 82
registered in his favour. Passing off is an action for deceit,
involving passing off the goods of one person as those of another,
whereas an action for infringement is a statutory remedy conferred
on the registered proprietor of a registered trade mark for
vindication of its exclusive right to use the trade mark in relation to
the goods in respect of which registration has been granted. Use of
the trade mark by the defendant is not necessary for infringement,
but it is a sine qua non for passing off. Once sufficient similarity,
as is likely to deceive, is shown, infringement stands established.
Passing off, however, may be resisted on the ground of added
material, such as packing, procurement through different trade
channels, etc. which would distinguish the goods of the defendant
from those of the plaintiff and belie the possibility of confusion or
deception.”
C. Trade mark rights are territorial
95. The right to protect and preserve intellectual property in a
trademark is exclusively territorial. The right to protection against
infringement flows from Section 28 (1)
48
of the Trade Marks Act, and
Section 2 (2)
49
of the Trade Marks Act extends its jurisdiction only do
the whole of India. Laxmikant V. Patel extends the territoriality
principle to passing off actions as well, by citing, approvingly, the
48
28. Rights conferred by registration. –
(1) Subject to the other provisions of this Act, the registration of a trade mark shall, if valid,
give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in
relation to the goods or services in respect of which the trade mark is registered and to obtain relief
in respect of infringement of the trade mark in the manner provided by this Act.
49
2. Definitions and interpretation-
(2) In this Act, unless the context otherwise requires, any reference—
(a) to trade mark‖ shall include reference to collective mark or certification trade
mark;
(b) to the use of a mark shall be construed as a reference to the use of printed or
other visual representation of the mark;
(c) to the use of a mark-
(i) in relation to goods, shall be construed as a reference to the use of the
mark upon, or in any physical or in any other relation whatsoever, to such
goods;
(ii) in relation to services, shall be construed as a reference to the use of
the mark as or as part of any statement about the availability, provision or
performance of such services;
(d) to the Registrar shall be construed as including a reference to any officer when
discharging the functions of the Registrar in pursuance of sub-section (2) of section 3;
(e) to the Trade Marks Registry shall be construed as including a reference to any office
of the Trade Marks Registry.
FAO(OS)(COMM) 151/2023 and another connected matter Page 58 of 82
decision in Oertli, which holds that “it was essential to the success of
any claim to passing-off based on the use of given mark or get-up that
the plaintiff should be able to show that the disputed mark or get-up
has become by user in the country distinctive of the plaintiff's goods
so that the use in relation to any goods of the kind dealt in by the
plaintiff of that mark or get-up will be understood by the trade and the
public in that country as meaning that the goods are the plaintiff's
goods”. The three elements of the tort of passing off are well
recognised as misrepresentation by the defendant, injury to the
plaintiff as a result of such misrepresentation, and the entitlement, of
the plaintiff, to damages, as a consequence. The injury suffered by the
Plaintiff, which gives rise to a cause of action in passing off, to seek
injunction and claimed damages, must be suffered within the territory
of India. A plaintiff cannot, therefore, seek relief on the ground that he
has suffered injury, as a result of the tortious acts of the defendant,
outside India. This principle also stands set out in the various indicia
of passing off, identified by this Court in its decision in FDC.
96. The learned Single Judge has, therefore, correctly held that, to
sustain a plea of passing off, against the defendant, the plaintiff must
establish existence of goodwill and reputation in India, and the
dilution or erosion of that goodwill or reputation by the tortious acts
of the defendant. Territorial existence of goodwill and reputation has,
therefore, to be established. The judgement of the Supreme Court in
Toyota has finally cemented this legal position.
97. Here, again, we may note that Mr. Sibal does not dispute this
FAO(OS)(COMM) 151/2023 and another connected matter Page 59 of 82
legal position.
D. The concept of goodwill for the purposes of passing off – Has
goodwill to be established in the mark, or in the mark as used for
specific goods or services?
98. This, in a sense, is the main issue which arises for
consideration in the present case. Mr. Sibal’s main contention has
been that, with respect to its use for luggage, or travel luggage, the
goodwill enjoyed by VIP in the CARLTON mark was of over 15
years’ vintage even on the date of filing of CS (Comm) 730/2019 by
CSL, which had never used the CARLTON mark or luggage till then.
He submits that the goodwill earned by CSL in the CARLTON mark,
by then, was only with respect to its use for footwear, and the
goodwill earned by CSL by such use would not entitled to maintain an
action for passing off, against VIP, seeking an injunction against the
use of the mark CARLTON by VIP for travel luggage, even though
there were some stray sales, by CSL, of CARLTON purses and
handbags – which, according to Mr. Sibal, were entirely insufficient
to result in any goodwill, particularly within India – purses and
handbags cannot be treated as articles which are allied or cognate or
similar to travel luggage. Goodwill, if any, earned by CSL by use of
the CARLTON mark for purses and handbags could also, therefore,
not entitled it to allege passing off, by VIP, owing to the use of the
mark CARLTON by VIP for travel luggage or seek an injunction
against such use.
99. Mr. Sibal clarifies that the proposition that he seeks to expound
FAO(OS)(COMM) 151/2023 and another connected matter Page 60 of 82
is more nuanced than this. He submits that, where a mark may have
independently earned a reputation, over time, which is so substantial
as to result in independent goodwill, having developed in the mark by
itself, resulting in the mark acquiring a “secondary meaning”, then,
irrespective of the goods or services for which it is used, it may be
possible for a plaintiff to claim that the mark itself has goodwill, de
hors the goods or services in respect of which the mark is used. For
this, however, the goodwill must be so substantial as to independently
apply to the mark – as, for example, the goodwill which exists in the
marks Mont Blanc, or Mercedes. Mr. Sibal submits that, with respect
to goodwill as the basis for a passing off action, there are conceivably
three levels of goodwill. Where the goods or services in respect of
which the rival marks are used are identical, a lowest threshold of
goodwill would suffice to make out an action for passing off. Where
the goods or services are not identical, but are similar, i.e., allied or
cognate, the degree of goodwill which the plaintiff would have to
establish as existing would be greater. Where, however, the rival
marks are used for goods or services which are neither identical, nor
allied or cognate, the Plaintiff can succeed in an action for passing off
only if the degree of goodwill that the Plaintiff mark commands is
analogous to the degree of goodwill envisaged by Section 29 (4)
50
of
the Trade Marks Act. In other words, in such a case, the degree of
goodwill that the mark has, over time, commanded, must be such as to
50
(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person
using by way of permitted use, uses in the course of trade, a mark which—
(a) is identical with or similar to the registered trade mark; and
(b) is used in relation to goods or services which are not similar to those for which the trade
mark is registered; and
(c) the registered trade mark has a reputation in India and the use of the mark
without due cause takes unfair advantage of or is detrimental to, the distinctive character or
repute of the registered trade mark.
FAO(OS)(COMM) 151/2023 and another connected matter Page 61 of 82
lend it a secondary meaning or significance in the minds of the
consuming public. To substantiate his submissions, Mr. Sibal as
placed reliance on the decisions in Beiersdorf and Mittal Electronics.
100. Before adverting to the judicial authorities cited by Mr. Sibal,
we proceed to test his submission that, where the rival marks are used
for goods or services which are neither identical, nor allied or cognate,
an action for passing off and sustain only if the degree of goodwill, to
buy the Plaintiff mark is akin to that envisaged by Section 29(4) of the
Trade Marks Act.
101. The submission, though ingenious, is, in our opinion,
fundamentally flawed, and cannot commend itself to acceptance.
102. The most basic error that this submission suffers from, is in its
overlooking the fact that Section 29 of the Trade Marks Act deals with
infringement, whereas we are concerned with a case of passing off.
This distinction is not merely a distinction of semantics. The
difference arises from the fact that an action for infringement is only
peripherally concerned with goodwill or reputation, and has
everything to do with confusion, whereas the first and most important
requirement, to be satisfied, for an action of passing off to sustain, is
establishment of goodwill and reputation. The mere fact of
registration of a trademark would entitle the registered proprietor to
maintain an action for infringement against any person who uses an
identical or a deceptively similar trademark. To maintain an action for
infringement, the plaintiff is not required to establish the existence, in
the trademark, of any goodwill whatsoever. Mere existence of a
FAO(OS)(COMM) 151/2023 and another connected matter Page 62 of 82
registration in respect of the mark entitles the proprietor of the mark
relief against infringement. The single fact of registration, therefore,
entitles the proprietor of the registered trademark, if the ingredients of
one or more of the sub-sections of Section 29 applies, to maintain an
action for infringement. He does not have to prove any goodwill in the
trademark. Section 29 (4) is merely one particular specie in the
infringement genus, which applies in a case where the defendant, by
unfair use of the trade mark, seeks to capitalize on the reputation that
the plaintiff’s mark has garnered over time. It does not prioritize
goodwill over likelihood of confusion, in a case of alleged
infringement.
103. Thus far on first principles. Even otherwise, it is not open to
Court to apply, by judicial fiat, to a case of passing off, the statutory
indicia which exclusively apply, under Section 29(4), to a specific
category of infringement.
104. Addressing, now, Mr. Sibal’s primary contention that the
goodwill of reputation that the plaintiff has to establish, in order to
succeed in an action for passing off against the defendant is not
merely goodwill of reputation in the plaintiff’s mark, but goodwill or
reputation in the Plaintiff mark as applied to specific goods or
services, we find that the submission is contrary to the understanding
of the principle of goodwill, for passing off, as enunciated by the
Supreme Court.
105. In Laxmikant V Patel, the Supreme Court clearly explained the
concept of “goodwill”, for the purposes of a passing off action, thus:
FAO(OS)(COMM) 151/2023 and another connected matter Page 63 of 82
“8. It is common in trade and business for a trader or a
businessman to adopt a name and/or mark under which he would
carry on his trade or business. According to Kerly (Law of Trade
Marks and Trade Names, 12
th
Edn., para 16.49), the name under
which a business trades will almost always be a trade mark (or if
the business provides services, a service mark, or both).
Independently of questions of trade or service mark, however, the
name of a business (a trading business or any other) will normally
have attached to it a goodwill that the courts will protect. An
action for passing-off will then lie wherever the defendant
company’s name, or its intended name, is calculated to deceive,
and so to divert business from the plaintiff, or to occasion a
confusion between the two businesses. If this is not made out there
is no case.”
(Emphasis supplied)
The emphasised words, in the above passage from Laxmiikant V.
Patel, leave no manner of doubt that the concept of “goodwill”, for
the purposes of passing off, is in the name under which the business is
carried out. The name, or the mark, therefore, carries, with it,
goodwill.
106. The Chancery Division of the High Court of UK, in Fortune &
Manson plc v Fortnam Ltd
51
, spoke thus, on the aspect of passing off
and goodwill:
“(2) Passing off is a wrong or tort against property. There is no
property in a mere name or face. It has to be shown that the
complaining plaintiff has property in the form of goodwill which
consists of a reputation either in a name under which it trades by
providing goods or services to the public or in a getup or
appearance which is distinctive of goods supplied by the plaintiff
and that such goodwill be imperilled or damaged by the activities
of the defendant. That is the essential nature of the tort of passing
off.”
(Emphasis supplied)
107. The error in Mr. Sibal’s submission is in failing to note that,
FAO(OS)(COMM) 151/2023 and another connected matter Page 64 of 82
even if the goodwill ultimately attaches to the goods or services in
respect of which the mark is used, that goodwill is attributable, not to
the goods or services, but to the mark or name under which the goods
or services are provided. The following passage, from Kerly’s Law of
Trade Marks and Trade Names, which identifies the first ingredient of
a passing off action was, in this context, approvingly cited by the
Supreme Court in Ramdev Food Products (P) Ltd v Arvindbhai
Rambhai Patel
52
:
“Firstly, he must establish a goodwill or reputation attached to the
goods or services which he supplies in the minds of the purchasing
public by association with the identifying ‘get-up’ (whether it
consists simply of a brand name or a trade description, or the
individual features of labelling or packaging) under which his
particular goods or services are offered to the public, such that the
get-up is recognised by the public as distinctive, specifically of the
plaintiff's goods or services.”
(Emphasis supplied)
108. Syed Mohideen postulates the principle in the following words:
“31.1. Traditionally, passing off in common law is considered to
be a right for protection of goodwill in the business against
misrepresentation caused in the course of trade and for prevention
of resultant damage on account of the said misrepresentation. The
three ingredients of passing off are goodwill, misrepresentation and
damage. These ingredients are considered to be classical trinity
under the law of passing off as per the speech of Lord Oliver laid
down in Reckitt & Colman Products Ltd. v Borden Inc. which is
more popularly known as “Jif Lemon” case wherein Lord Oliver
reduced the five guidelines laid out by Lord Diplock Erven
Warnink Besloten Vennootschap v J. Townend & Sons (Hull)
Ltd., to three elements : (1) goodwill owned by a trader, (2)
misrepresentation, and (3) damage to goodwill. Thus, the passing
off action is essentially an action in deceit where the common law
rule is that no person is entitled to carry on his or her business on
pretext that the said business is of that of another. This Court has
51
1994 FSR 438
52
(2006) 8 SCC 726
FAO(OS)(COMM) 151/2023 and another connected matter Page 65 of 82
given its imprimatur to the above principle in Laxmikant V.
Patel v Chetanbhai Shah.
31.2. The applicability of the said principle can be seen as to
which proprietor has generated the goodwill by way of use of the
mark/name in the business. The use of the mark/carrying on
business under the name confers the rights in favour of the person
and generates goodwill in the market. Accordingly, the latter user
of the mark/name or in the business cannot misrepresent his
business as that of business of the prior right holder. That is the
reason why essentially the prior user is considered to be superior
than that of any other rights. Consequently, the examination of
rights in common law which are based on goodwill,
misrepresentation and damage are independent to that of registered
rights. The mere fact that both prior user and subsequent user are
registered proprietors are irrelevant for the purposes of examining
who generated the goodwill first in the market and whether the
latter user is causing misrepresentation in the course of trade and
damaging the goodwill and reputation of the prior right
holder/former user. That is the additional reasoning that the
statutory rights must pave the way for common law rights of
passing off.”
(Emphasis supplied)
109. In T.V. Venugopal, the Supreme Court upheld the claim of
passing off, observing, in this regard, thus:
“(a) The respondent Company's mark “Eenadu” has acquired
extraordinary reputation and goodwill in the State of Andhra
Pradesh. The respondent Company's products and services are
correlated, identified and associated with the word “Eenadu” in the
entire State of Andhra Pradesh. “Eenadu” literally means the
products or services provided by the respondent Company in the
State of Andhra Pradesh. In this background the appellant cannot
be referred or termed as an honest concurrent user of the mark
“Eenadu”.”
Here, again, the goodwill which had been acquired, and on the basis
of which the Supreme Court held the allegation of passing off to be
sustainable, was in the mark “Eenadu” per se. It is not as though the
mark “Eenadu” had acquired goodwill only when used for the goods
and services of the respondent (before the Supreme Court). The goods
FAO(OS)(COMM) 151/2023 and another connected matter Page 66 of 82
and services provided by the respondent were invariably correlated
and identified with the mark “Eenadu”, owing to the goodwill which
the mark had acquired over a period of time.
110. In fact, Mr. Sibal was more or less compelled to accept this
legal position but sought, with his usual dexterity, to distinguish it as
restricted to certain cases. The attempt, in our considered opinion, is
misguided. It is a well-known fact that, with the passage of time, one
mark may be used for a variety of goods or services. Under the same
Mercedes Benz mark, today, one may purchase anything from
automobiles to perfumes. Mont Blanc, which started as a mark used
for writing instruments, is used, today, for watches, accessories such
as wallets and purses and perfumery, among others. It would be facile,
therefore, to suggest that the reputation that the market carries is only
when used with a particular category of goods or services.
111. It is this query, when posed by the Court to him, which
provoked Mr. Sibal to venture a theory that there are degrees of
goodwill, and the character of the goodwill would be dependent on the
degree of goodwill which applies in a particular case. According to
him this, marks such as Mercedes-Benz or Mont Blanc, have acquired
such a high degree of goodwill, that the goodwill resides in the mark
independent of the goods or services in connection with which it is
used. Marks which have not acquired that degree of goodwill,
according to him, may themselves be of two categories. The
defendant’s mark may be identical to the plaintiff’s, in which case,
too, the plaintiff would have to establish goodwill, but to a lesser
degree, owing to the identity of the marks. Where the marks are not
FAO(OS)(COMM) 151/2023 and another connected matter Page 67 of 82
identical, however, the plaintiff would have to establish the existence
of pre-eminent goodwill in the mark when used in conjunction with
particular goods or services.
112. With great respect to Mr. Sibal, we find no legal basis for this
submission. While, as judges, it is always a pleasure to develop the
law, the law cannot be allowed to develop in directions which are
opposed to the law as it exists today. The development of the law
cannot be labyrinthine. We cannot distinguish between goodwill as
applicable to “reputed” marks, as compared to goodwill as applicable
to less reputed marks, for the purposes of passing off. The law does
not recognise, or envisage, such distinct categories of goodwill.
Goodwill either exists, or it does not exist. The ingredients which are
required to be established, in order for a Court to arrive at a finding
that the name or mark carries the requisite goodwill in the minds of
the public, are well established. There is, needless to say, no strait-
jacket formula in this regard, and the issue of whether, in a particular
case, the requisite degree of goodwill does, or does not, exist, must
necessarily depend on the facts and circumstances of that case. In all
cases, however, the goodwill that is required to be established is in
the mark, or name, no doubt when used in connection with the goods
or services which the plaintiff provides. This principle applies, as
much to marks such as Mercedes-Benz or Mont Blanc, as to
“humbler” marks.
113. As Mr. Sethi correctly pointed out, Laxmikant V. Patel was
concerned with the use of the mark “Muktajivan” when used for a
modest colour studio, having no more than a reputation in the area, or
FAO(OS)(COMM) 151/2023 and another connected matter Page 68 of 82
the city, in which it was located. Nonetheless, the Supreme Court
protected the mark against passing off.
114. We, therefore, cannot accept Mr. Sibal’s submission that, for a
passing off action, the goodwill that is required to be proved is in the
name or mark when used in connection with particular goods or
services. Though, in every case, the name or mark would undoubtedly
be used for providing goods are rendering services, the goodwill has
to reside in the name or mark per se. So long as the plaintiff’s name or
mark carries goodwill, it is entitled to protection against passing off,
and against every other person using the same, or a deceptively
similar name, or mark, as would result in the consuming public
regarding the goods or services provided by such other person as
those provided by the plaintiff.
E. Trans-border reputation
115. Insofar as the aspect of trans-border reputation is concerned,
Mr. Sibal did not seriously question the correctness of the legal
principles employed by the learned Single Judge in that regard. His
submission is that, in employing the principles to the facts of the
present case, the learned Single Judge has erred.
116. The principle of trans-border reputation, in a passing off action,
now stands authoritatively delineated by the following passages from
Toyota, on which the learned Single Judge has correctly placed
reliance:
FAO(OS)(COMM) 151/2023 and another connected matter Page 69 of 82
“29. The view of the courts in UK can be found in the decision
of the UK Supreme Court in Starbucks (HK) Ltd. v British Sky
Broadcasting Group
53
, wherein Lord Neuberger observed as
follows:
‘52. As to what amounts to a sufficient business to
amount to goodwill, it seems clear that mere reputation is
not enough.… The claimant must show that it has a
significant goodwill, in the form of customers, in the
jurisdiction, but it is not necessary that the claimant
actually has an establishment or office in this country. In
order to establish goodwill, the claimant must have
customers within the jurisdiction, as opposed to people in
the jurisdiction who happen to be customers elsewhere.
Thus, where the claimant's business is carried on abroad, it
is not enough for a claimant to show that there are people
in this jurisdiction who happen to be its customers when
they are abroad. However, it could be enough if the
claimant could show that there were people in this
jurisdiction who, by booking with, or purchasing from, an
entity in this country, obtained the right to receive the
claimant's service abroad. And, in such a case, the entity
need not be a part or branch of the claimant: it can be
someone acting for or on behalf of the claimant.’
30. It seems that in Starbucks (HK) Ltd. v British Sky
Broadcasting Group , the Apex Court of UK had really refined
and reiterated an earlier view in Athletes' Foot Mktg. Associates
Inc. v Cobra Sports Ltd.
54
to the following effect:
‘… no trader can complain of passing off as against him in
any territory … in which he has no customers, nobody who
is in trade relation with him. This will normally shortly be
expressed by stating that he does not carry on any trade in
that particular country … but the inwardness of it will be
that he has no customers in that country….’
31. A passing reference to a similar view of the Federal Court
of Australia in Taco Bell v Taco Co. of Australia [Taco
Bell v Taco Co. of Australia
55
,may also be made.
32. Prof. Cristopher Wadlow's view on the subject appears to
be that the test of whether a foreign claimant may succeed in a
passing-off action is whether his business has a goodwill in a
particular jurisdiction, which criterion is broader than the
53
(2015) 1 WLR 2628
54
1980 RPC 343
55
(1981) 60 FLR 60 (Aust)
FAO(OS)(COMM) 151/2023 and another connected matter Page 70 of 82
‘obsolete’ test of whether a claimant has a business/place of
business in that jurisdiction. If there are customers for the
claimant's products in that jurisdiction, then the claimant stands in
the same position as a domestic trader.
33. The overwhelming judicial and academic opinion all over
the globe, therefore, seems to be in favour of the territoriality
principle. We do not see why the same should not apply to this
country.
34. To give effect to the territoriality principle, the courts must
necessarily have to determine if there has been a spillover of the
reputation and goodwill of the mark used by the claimant who has
brought the passing-off action. In the course of such determination
it may be necessary to seek and ascertain the existence of not
necessarily a real market but the presence of the claimant through
its mark within a particular territorial jurisdiction in a more subtle
form which can best be manifested by the following illustrations,
though they arise from decisions of courts which may not be final
in that particular jurisdiction.
35. In LA Société Anonyme Des Anciens Établissements
Panhard Et Levassor v Panhard Levassor Motor Co. Ltd.
56
, the
plaintiffs were French car manufacturers who had consciously
decided to not launch their cars in England (apprehending patent
infringement). Nevertheless, some individuals had got them
imported to England. It was seen that England was one of the
plaintiff's markets and thus, in this case, permanent injunction was
granted. Similarly, in Grant v Levitt
57
, a Liverpool business
concern trading as the Globe Furnishing Company, obtained an
injunction against the use of the same name in Dublin as it was
observed that advertisements by the plaintiff had reached Ireland
and there were Irish customers.
36. C&A Modes v C&A (Waterford) Ltd.
58
was a case where
the plaintiffs operated a chain of clothes stores throughout the UK
and even in Northern Ireland but not in the Republic of Ireland
where the defendants were trading. The court held that:
‘a very substantial and regular custom from the Republic of
Ireland was enjoyed by this store. Up to that time an
excursion train travelled each Thursday from Dublin to
Belfast, and so great was the influx of customers from the
Republic as a result of that excursion that the store
ordinarily employed extra part-time staff on Thursday on
56
(1901) 2 Ch 513
57
(1901) 18 RPC 361
58
1976 IR 198 (Irish)
FAO(OS)(COMM) 151/2023 and another connected matter Page 71 of 82
the same basis as it did on Saturday which were normally
the busiest shopping days.’
The said view has since been upheld by the Irish Supreme Court.
37. Whether the second principle evolved under the trinity test
i.e. triple identity test laid down in Reckitt & Colman Products
Ltd. v Borden Inc. would stand established on the test of
likelihood of confusion or real/actual confusion is another question
that seems to have arisen in the present case as the Division Bench
of the High Court has taken the view that the first test i.e.
likelihood of confusion is required to be satisfied only in quia timet
actions and actual confusion will have to be proved when the suit
or claim is being adjudicated finally as by then a considerable
period of time following the initiation of the action of passing off
might have elapsed. Once the claimant who has brought the action
of passing off establishes his goodwill in the jurisdiction in which
he claims that the defendants are trying to pass off their goods
under the brand name of the claimant's goods, the burden of
establishing actual confusion as distinguished from possibility
thereof ought not to be fastened on the claimant. The possibility or
likelihood of confusion is capable of being demonstrated with
reference to the particulars of the mark or marks, as may be, and
the circumstances surrounding the manner of sale/marketing of the
goods by the defendants and such other relevant facts. Proof of
actual confusion, on the other hand, would require the claimant to
bring before the court evidence which may not be easily
forthcoming and directly available to the claimant. In a given
situation, there may be no complaints made to the claimant that
goods marketed by the defendants under the impugned mark had
been inadvertently purchased as that of the plaintiff claimant. The
onus of bringing such proof, as an invariable requirement, would
be to cast on the claimant an onerous burden which may not be
justified. Commercial and business morality which is the
foundation of the law of passing off should not be allowed to be
defeated by imposing such a requirement. In such a situation,
likelihood of confusion would be a surer and better test of proving
an action of passing off by the defendants. Such a test would also
be consistent with commercial and business morality which the
law of passing off seeks to achieve. In the last resort, therefore, it is
preponderance of probabilities that must be left to judge the
claim.”
117. We have already reproduced, supra, the tests of passing off
which we have found to emerge from a cohesive reading of the
various authorities on the point, in the decision of this Court in FDC.
FAO(OS)(COMM) 151/2023 and another connected matter Page 72 of 82
Without reiterating the said principles, it is clear that, where a plaintiff
is seeking to establish goodwill, in the territory in which it alleges the
tort of passing off to have been committed, on the basis of a mark or
name which is otherwise used outside that territory, it has to show
actual percolation of reputation and goodwill in that mark or name
into the territory in which it alleges passing off to have taken place.
While it may not be necessary for the plaintiff to have an office in that
particular territory or country, it must have customers within such
territory. Those customers must purchase the goods of the plaintiff, or
avail the services of the plaintiff, rendered under such mark or name,
when situated within that territory. It is not enough to show that such
customers, when they proceeded abroad, were customers of the
plaintiff. Thus, the plaintiff must be “present through its mark in the
territorial jurisdiction” of the country of the defendant, even if the
existence of a “real market” in that country is not necessary. This
“presence” may be merely by reputation also, as in a situation in
which the mark or name is extensively advertised in that country.
118. The concept is actually elementary, when one keeps in mind the
basic principle of passing off. Passing off takes place when a
defendant, by using the mark or name of the plaintiff, seeks to pass of
his goods, or services as the goods, or services, of the plaintiff. The
issue of trans-border reputation arises where the plaintiff is situated
outside the territorial jurisdiction in which the defendant is located.
Even in such a case, if the reputation and goodwill which is
commanded by the plaintiff’s mark is of such a degree that it has
percolated into the territory of the defendant, and is “well-known” in
that territory, the defendant is still seeking to capitalise on the
FAO(OS)(COMM) 151/2023 and another connected matter Page 73 of 82
reputation of the mark or name. This is because, if consumers within
the defendant’s territory are consciously aware of the reputation of the
mark or name in question, even though it is exclusively, or even
essentially, used outside the territory, they may presume, when such
mark or name is used by the defendant, that the plaintiff has now
established a presence in that territory. When dealing with India, for
example, many reputed brands, and names, which earlier had no
presence in India, though they commanded a global reputation, have
now established a presence within India.
119. One may, for example, consider a mark such as Burger King.
Till a decade or so ago, Burger King had no presence in India. Even
so, it had a global reputation, and many consumers in India, who were
fond of burgers, were aware of the existence of the Burger King
franchise. If, therefore, some adventurous entrepreneur, in India,
decided to set up a Burger King outlet, before Burger King officially
established a presence in this country, it might have amounted to
passing off, given the fact that Burger King had a global reputation,
and that reputation had percolated into India, through promotional
material, literature, advertisements, and the like, even if there was no
physical Burger King outlet within this country. Of course, if Burger
King were to bring a passing off action against such entrepreneur, the
onus would be on Burger King to prove that its global reputation had
percolated into India so that it could be said to enjoy trans-border
reputation within this country.
120. We, therefore, entirely agree with the learned Single Judge that
“the existence of goodwill and reputation has to be shown to exist in
FAO(OS)(COMM) 151/2023 and another connected matter Page 74 of 82
India and worldwide or global goodwill and reputation, sans any
evidence of territorial goodwill and reputation, will be insufficient to
succeed in a claim of passing off and thus yardstick to judge the claim
of passing off will be “prior user” in India”. Of course, mere priority
of user in India may not be sufficient to sustain a claim of passing off
unless the plaintiff ascertaining the claim is able to establish that such
prior user has resulted in accumulation of goodwill and reputation in
the mark that it seeks to assert.
121. These principles, as we have already noted, have not been
questioned by Mr. Sibal.
122. Having returned the aforenoted findings on law, the impugned
judgment proceeds to apply these principles to the facts. The learned
Single Judge has, in this context, held that
(i) neither CSL, nor VIP, was able to make out a case of
trans-border reputation, prior to the commencement of the use,
by them, of the CARLTON mark in India, and
(ii) within India, CSL had priority of user, of the CARLTON
mark, and
(iii) CSL had been able to prove, prima facie, existence of
sufficient goodwill and reputation as would justify injuncting
VIP from use of the CARLTON mark in respect of goods
covered by Class 18.
123. These are pure findings of fact, and are fundamentally
discretionary in nature. The scope of interference, with such findings,
in appeal, has to be circumscribed by the following exordium,
FAO(OS)(COMM) 151/2023 and another connected matter Page 75 of 82
contained in the judgment of the Supreme Court in Wander:
“14. The appeals before the Division Bench were against the
exercise of discretion by the Single Judge. In such appeals, the
appellate court will not interfere with the exercise of discretion of
the court of first instance and substitute its own discretion except
where the discretion has been shown to have been exercised
arbitrarily, or capriciously or perversely or where the court had
ignored the settled principles of law regulating grant or refusal of
interlocutory injunctions. An appeal against exercise of discretion
is said to be an appeal on principle. Appellate court will not
reassess the material and seek to reach a conclusion different from
the one reached by the court below if the one reached by that court
was reasonably possible on the material. The appellate court would
normally not be justified in interfering with the exercise of
discretion under appeal solely on the ground that if it had
considered the matter at the trial stage it would have come to a
contrary conclusion. If the discretion has been exercised by the
trial court reasonably and in a judicial manner the fact that the
appellate court would have taken a different view may not justify
interference with the trial court's exercise of discretion. After
referring to these principles Gajendragadkar, J. in Printers
(Mysore) Private Ltd. v. Pothan Joseph
59
:
“... These principles are well established, but as has been
observed by Viscount Simon in Charles Osenton &
Co. v. Jhanaton
60
‘...the law as to the reversal by a court
of appeal of an order made by a judge below in the exercise
of his discretion is well established, and any difficulty that
arises is due only to the application of well settled
principles in an individual case’.”
We would not, therefore, interfere with the exercise of subjective
discretion, by the learned Single Judge, on issues of fact, unless the
exercise is capricious, perverse, or such as no reasonable man would
undertake on the facts before him.
124. VIP alone is in appeal before us. CSL has not challenged the
impugned judgment, or preferred any cross-objection in VIP’s appeal.
As such, we are required to consider the findings of the learned Single
59
AIR 1960 SC 1156
60
1942 AC 130
FAO(OS)(COMM) 151/2023 and another connected matter Page 76 of 82
Judge, only insofar as they are adverse to VIP.
125. The learned Single Judge holds in paras 57 to 61 (reproduced in
para 37 supra) of the impugned judgment, that VIP has not been able
to make out a case of sufficient trans-border reputation, prior to the
commencement of the use, by it, in India, of the CARLTON mark. In
so holding, the learned Single Judge notes that
(i) there was nothing to indicate that the promotional
material, relied upon by VIP, was extensively and widely
published or circulated in India, so as to result in spillover of
the goodwill and reputation of the CARLTON mark, as used by
CIPLC, into India,
(ii) prior to the use, by VIP, of the CARLTON mark for
travel luggage in 2006, there was no material to indicate that
any goods bearing the CARLTON mark, manufactured by VIP
or CIPLC, had a customer base in India,
(iii) nor was there any indication that CIPLC or, prior thereto,
Raxvale, had any presence in India or in the Indian market,
(iv) VIP had referred to certain advertisements and price lists
dating back to the 1980s and 1990s, but there was no material to
show that customers in India were aware of these
advertisements or price lists, and
(v) there were no documents to evidence sales, in India, by
CIPLC or Raxvale, of goods bearing the mark CARLTON, such
as invoices, bills, delivery documents or photographs of stores.
The learned Single Judge observes that the earliest sales invoice
placed on record by VIP, is dated 11 August 2006. She also notes that
the invoices of 2006 and 2007 make no observation or reference to
FAO(OS)(COMM) 151/2023 and another connected matter Page 77 of 82
CARLTON. Even if VIP’s stand that the AIRTEC Mark was a sub-
brand of CARLTON, was to be accepted, it would indicate goodwill
only as of 22 December 2006. Inasmuch as the use, by CSL, of the
CARLTON mark was of 1992-1993 vintage, the learned Single Judge
holds that there was no evidence, led by VIP, to show accumulation of
any trans-border reputation or goodwill, in the CARLTON mark, prior
to 1992-1993. Thus, she concludes, “absence or negligible presence
of VIPs goods in question under the trademark CARLTON in the
Indian market space when Carlton started to occupy the space, defeats
VIPs claim of passing off against Carlton.”
126. We have already set out Mr. Sibal’s submissions hereinbefore,
and we do not find any submission which would serve to dent these
findings of the learned Single Judge in the impugned judgment.
127. There is, therefore, no factual or legal irregularity or illegality in
the finding of the learned Single Judge, in the impugned judgment,
that, prior to 2004, the CARLTON mark, for any goods, as used by
VIP, did not have any reputation or goodwill in India. No case of
trans-border reputation having been earned by the mark, prior thereto,
was forthcoming.
F. Priority of user, and goodwill, established by CSL
128. As against this, the impugned judgment holds, in para 62
(reproduced in para 37), that CSL had placed material on record to
indicate accumulation of goodwill of the CARLTON mark, as used by
it in India, prior to the commencement of user of the CARLTON mark
FAO(OS)(COMM) 151/2023 and another connected matter Page 78 of 82
by VIP in 2006. The learned Single Judge refers, in this context, to
(i) sale invoices of the years 2003 to 2005 along with the list
of 24 outlets of CSL, across Delhi, Gurgaon, Noida and
Chandigarh,
(ii) certificates of sales figures of the revenue earned by use,
by CSL, of the CARLTON mark in India during the period
1993 to 2018,
(iii) articles extensively figuring in high-profile magazines
and newspapers widely published and circulated in India such
as Cosmopolitan, Femina, Fashion Bloom, Apparel, Society,
Outlook, The Tribune, The Pioneer, HT City, Business
Standard, The Hindu, etc, dating back to March 2004,
(iv) presence on various e-commerce platforms,
(v) VAT registrations dating back to 1993, and
(vi) Master data of production under the CARLTON marks
by CSL from 2003.
129. In response thereto, Mr. Sibal submits that the material, to
which the impugned judgment alludes in para 62, reference the use of
the CARLTON mark, by CSL, for footwear or, at the best, handbags
and purses, which were not allied, cognate or similar to travel luggage.
The submission would apply, equally, to the Master data, in which
Mr. Sibal submits that there is a sole entry pertaining to luggage,
which, too, is of Chinese origin and is of 2010.
130. In view of our finding, earlier in this judgment, that the
goodwill that is required to be established in order to sustain a claim
of passing off is goodwill in the mark, and not goodwill in the mark as
FAO(OS)(COMM) 151/2023 and another connected matter Page 79 of 82
used for any particular goods or services, the submission of Mr. Sibal
must, of necessity, fail. Even if CSL had established goodwill, in
respect of the CARLTON mark, for footwear, that by itself would
suffice to maintain a plea for injunction against VIP using the
CARLTON mark, even if it was for travel luggage.
131. We, moreover, are not in agreement with Mr. Sibal that
handbags and purses are not allied and cognate, or similar goods, vis-
à-vis travel luggage. There is no real basis for this submission, except
Mr. Sibal’s insistence that handbags and purses are fashion
accessories. To our mind, handbags and purses are also receptacles in
which persons carry items for use by them, though on a much smaller
scale than travel luggage. Not everyone, it is obvious, uses a handbag
as a fashion accessory, nor are all handbags, for that matter, capable
of, or even meant for, such use. At least at a prima facie stage,
keeping in mind the circumspection which the judgment of the
Supreme Court in Wander requires us to maintain while sitting in
appeal, we certainly cannot set aside the judgment of the learned
Single Judge by accepting Mr. Sibal’s contention that handbags and
purses are not allied and cognate to luggage. Even on merits, the
submission appears to be highly debatable.
132. The finding of CSL having proved the existence of goodwill
and reputation of the CARLTON mark, as used by it for more than 13
years prior to the commencement of user of the CARLTON mark by
VIP for travel luggage, therefore, does not brook interference.
G. Balance of convenience
FAO(OS)(COMM) 151/2023 and another connected matter Page 80 of 82
133. The learned Single Judge has also examined whether the
balance of convenience lies, in the present case. She notes that
CARLTON is the house mark of CSL, and is the only mark used by it.
As against this, VIP has at least six marks other than CARLTON,
which it uses. Keeping in mind the reputation that the CARLTON
mark, as used by CSL, has earned since 1993 even in India, the
learned Single Judge holds that the balance of convenience was in
favour of grant of injunction, to CSL, against VIP, restraining VIP
from using the CARLTON mark for goods which fall in Class 18,
pending disposal of the suit.
134. On facts, these findings are not disputed by Mr. Sibal. His
contention is that the balance of convenience was in favour of VIP,
rather than CSL, as VIP had, to its credit, 13 years’ accumulated
goodwill and reputation, from 2006 to 2019, before the cross-suits
were filed by VIP and CSL against each other. Mr. Sibal repeatedly
emphasised that the incongruous consequence of the impugned
judgment is that CSL, which never used the CARLTON mark for
luggage, has now been permitted to do so, while VIP, which was
using the mark for 13 years, for travel luggage, even prior to
institution of the suit by CSL, has been restrained from further doing
so.
135. Insofar as the last submission of Mr. Sibal is concerned, the
restraint that the learned Single Judge has placed on Mr. Sibal is but a
legal consequence of her finding that VIP is guilty of passing off its
product as the product of CSL, by using an identical CARLTON
mark. Though Mr. Sibal submits that the use was innocent, as CSL
FAO(OS)(COMM) 151/2023 and another connected matter Page 81 of 82
was never using the CARLTON mark for travel luggage, we are not
inclined to interfere with the opinion, expressed by the learned Single
Judge in the impugned judgment, that it was not. We are in agreement
with the learned Single Judge that it would be hard to believe that VIP
was unaware of the prior existence of the CARLTON mark, in India,
as used by CSL since 1993. The CARLTON mark in fact stands
registered, under the Trade Marks Act, for Class 18 goods, in favour
of CSL, since 1986. CARLTON is not a word of ordinary usage, or
one which would readily come to the mind of a manufacturer of travel
luggage. If, therefore, the learned Single Judge has come to a
conscious and subjective finding that the adoption of the CARLTON
mark, by VIP, for travel luggage in 2006, was not innocent but
deliberate, we do not find that any case to interfere with that finding,
within the peripheries of the appellate jurisdiction which vests in us,
exists.
136. While, therefore, adopting the CARLTON mark for travel
luggage, VIP undertook, upon itself, the risk of suffering an injunction
at a later point of time. It cannot, therefore, complain, now that an
injunction has been granted.
137. We, therefore, are unable to accept Mr. Sibal’s submission that
the balance of convenience, insofar as grant of injunction is
concerned, was not in favour of CSL. We sustain the findings of the
learned Single Judge in that regard.
H. Delay
FAO(OS)(COMM) 151/2023 and another connected matter Page 82 of 82
138. Mr. Sibal has also pleaded delay, on CSL’s part, in instituting
its suit. This issue stands answered, against VIP, by para 16 of the
judgment of the Supreme Court in Heinz Italia, on which Mr. Sethi
correctly placed reliance:
“16. … In Corn Products
61
it was observed that the principle of
similarity could not to be very rigidly applied and that if it could be
prima facie shown that there was a dishonest intention on the part
of the defendant in passing off goods, an injunction should
ordinarily follow and the mere delay in bringing the matter to court
was not a ground to defeat the case of the plaintiff. It bears
reiteration that the word “Glucon-D” and its packaging had been
used by Glaxo since 1940 whereas the word “Glucose-D” had been
used for the first time in the year 1989.”
139. The plea of delay in institution of the suit by CSL, as advanced
by Mr. Sibal is also, therefore, rejected.
Conclusion
140. No case is, therefore, made out for interference with the
impugned judgment of the learned Single Judge, which is affirmed in
its entirety.
141. The appeals are dismissed.
C. HARI SHANKAR, J.
AJAY DIGPAUL, J.
JULY 1, 2025/ar/dsn
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61
Corn Products Refining Co. v Shangrila Food Products Ltd, AIR 1960 SC 142
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