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DELHI HIGH COURT SOLVES THE CONUNDRUM OF TWO “SUJATAS”

Introduction

The Hon'ble Delhi High Court modified its injunction order against the defendants in the case of Mittal Electronics v. Sujata Home Appliances on the ground of concealment of material facts and other merits. The initial order had restrained the defendants from using the mark of 'Star SUJATA' and 'SUJATA' for any of their products by the way of an ex-parte ad-interim injunction. The present order, however, accorded the defendants the permission to use the mark 'SUJATA' for manufacturing and selling of the water filters, water purifiers, and RO Systems, whilst upholding the injunction order intact against the usage of the mark for any other products.

The court through this order revisits the classic legal principle of the doctrine of clean hands in trademark law whilst analysing the apex court's ruling in Nandhini Deluxe v. Karnataka Co-operative Milk Producers Federation Ltd. regarding the perennial confusion on the subject of the trademark proprietor's right to enjoy the monopoly over the entire class of its products.

In this piece, the author will look into the major legal principles that have been relied upon by the court to modify its ex-parte injunction and will also throw light upon certain areas that the court could have looked into to curb the incidents of problematic usage of the ex-parte interim injunction which often cause severe ramifications to the defendants.

Background

The plaintiffs (Mittal Electronics) contended that the trademark 'SUJATA' was originally adopted by them in the year 1980 when they had expanded their business to electrical goods and home appliances. They claimed to have ownership of the registered mark in classes 7, 8,9,11, and 35. According to the plaint, the company came to know about the defendant's (SUJATA Home Appliances Ltd.) usage of the mark 'SUJATA' for Geysers when their technician was called upon to repair one and consequently realised that the appliance was not manufactured by his company.

When the suit came before the High Court for hearing, the defendants were prohibited from using the trademark for the manufacturing, purchasing, or selling of any of their products. The court established in this order that the plaintiff was fulfilling all the three conditions precedent for a valid interim injunction i.e. the existence of a prima facie case, a potential consequence of an irreparable loss in the scenario of no ex-parte ad-interim injunction, and a balance of convenience in the favour of the plaintiffs. It was when the defendants filed a fresh suit with the prayer of a modification in the injunction that the court's attention was drawn towards other material facts that were suppressed by the plaintiffs. It was in light of these facts that the following legal principles were discussed in-depth and accordingly analysed by the court.

The Judicial Decision

The injunction granted against the defendants was modified by the court in this order and the applicability of the Doctrine of “Clean Hands” was duly recognized. It was discussed throughout the judgement how the plaintiff, during the initial trial had concealed the material fact that the defendants were in prior possession of the mark "SUJATA" for the particular appliances of water filters, water purifiers, and RO system. The Court thoroughly relied on the Supreme Court ruling of the Nandhini case to establish that a proprietor of a trademark does not have a monopoly over the entire class of the product.

Critiquing the Judicial Analysis of the Court

A. Exhibiting the Importance of the Doctrine of Clean Hands

The plaintiff had suppressed certain material facts to get an ex-parte ad-interim injunction in their favour. The court whilst looking into these concealed facts expounded the 'clean hands' doctrine. Clean hands is an equitable defence originating from the rule of law according to which a person coming to the court for a grant of relief is under a solemn obligation to be themselves free of any mala fide conduct. It is a form of equitable relief and a plaintiff as per equity is presupposed to reveal all the material facts that are related to the case.

The plaintiffs in the present case hid the material fact that Rajesh Kumar Bansal (defendant no. 1) was the proprietor of the "SUJATA" mark for water purifiers, water filters, RO system. The Court on this point relied on the case of Kishore Samrite vs. State of Uttar Pradesh & Ors. to propound that it was the litigant's duty to make sure that he approached the courts without "unclean hands" and initiated the proceeding with full disclosure of the facts and without any intention to deceive or mislead the courts. The present case tends to remind us that stating the whole case, fully and fairly to the court is the absolute obligation of the litigant and breaking the judicial faith would result in them losing the court's discretion in their favour. This means that the plaintiff would not be entitled to discretionary relief when such a suit is filed. The court reinforced the settled principle of Charanjit Thukral & Ors. v. Deepak Thukral & Ors. and harmonised the maxim "hath committed iniquity shall not have equity"[1]in its judgement

The Doctrine of “Clean Hands” prevents a litigant from enforcing his intellectual property rights if he himself stands guilty of misconduct in respect of that particular right. For instance, in Trademark Law the concealment of material fact regarding the knowledge about the defendant’s mark would be considered as acquiescence in the court of law. Thus, this doctrine eventually becomes an affirmative defence for the defendants against trademark infringement as it can be contended that proprietor’s acquiescence amounts to permission (bona fide) for the usage of the similar mark.

B. The Determination of the Trademark Proprietor's Right to enjoy Monopoly over the Entire Class of Goods

The present case not only drew attention to the common law principle of equity but also threw the spotlight on the landmark Nandhini Deluxe case that provided closure on the subject of co-existence of similar trademarks within the same class of products. The Delhi High Court upheld this ruling and re-established the principle that the proprietor of a trademark could not enjoy a monopoly over the entire class of goods and, particularly, when he is not using the said trademark in respect of those certain goods that are falling under the same class. The principle laid down in the Vishnudas Trading v. Vazir Sultan Tobacco Co. which was followed in the Nandhini Ruling was also elaborately discussed in detail in the present case. The case had held that according to the purpose envisaged by the Trademarks Act and the concurrent rules it was evident that registration of a mark was not absolute and its ambit could be limited by confining the registration to the specific articles that were concerning the proprietor. In the present case, the disputed mark 'SUJATA' is used by the plaintiff who is a user of the mark for goods like mixers, blenders, etc. while the defendants use it for the water filters, water purifiers, and RO.

Although the respective goods of both the parties fall broadly in the category of home appliances, the court differentiated between them as they are used for different purposes. The court here has applied the test of the 'similarity of goods' laid down in the case of FDC Limited v. Docsuggest Healthcare Services Pvt. Ltd. & Ors. wherein it was established that two sets of goods or services of the same class could be differentiated from each other on the grounds of "their nature, their intended purpose, their method of use and whether they are in competition with each other or are complementary."

This case hence curtailed the right to use a trademark for selling, manufacturing, or purchase purposes of proprietors who were often in the production of varying products by determining that they did not enjoy a monopoly over the entire class of the products that they have registered. This judicial interpretation is an important intra-trade defence that can be relied upon by the small-scale businesses who focus on the production of only certain goods of that class. Intra-trade defence is an affirmative defence and a huge relief to the trademark owners that had similar trademarks to already registered marks for dissimilar goods that were falling under the same class. This defence comes under the exceptions of honest concurrent use and/or of other circumstances that allows the usage of the same or deceptively similar registered mark under the sub-section (3) of Section 12 of the Trademarks Act. It ensures that the proprietors of the earlier registered mark do not enjoy the mischief of trafficking in trademark whereby the trademark is primarily dealt with the notion that it is a commodity in its own right and not for the purpose of identification in which the proprietor of the mark is interested.

Conclusion

The case of Mittal Electronics v. Sujata Home Appliances appropriately modified the injunction against the defendants for the specific appliances of water filters, water purifiers, or RO system. The judicial spotlight was thrown on the "Clean Hands Doctrine" which is an extremely necessary component of equity that has been traditionally embedded in our legal culture. The importance of the Nandhini ruling is reflected through the lens of the court's judicial analysis as they assert that the intra-class trademark defence would always be a vivid segment of the Indian Trademark Law.

This judgement, however, fails to look into the measures that should be undertaken to keep in check the litigant's action of concealing material facts that resulted in an interim injunction against the defendants. The plaintiff company should be held liable for the loss that ensued to the other party because of the cessation of production, selling, and purchasing of the appliances that were enforced on them by the way of the ex-parte injunction order. The Court could have relied on Ramrameshwari Devi v. Nirmala Devi wherein the apex court had clearly expressed that if an injunction was granted to a party based on false pleadings then the courts were entitled to impose cost on such litigants. One must realise that coming to the court with 'unclean hands' is a gross violation of the absolute obligation of refraining oneself from initiating the proceedings without fully disclosing the facts and a mere reprimand is not enough to keep such unsavoury practices in check.


[1] Maxim of law that means that any person individual, or corporate that comes up to the court for adjudications should be in a position free of fraud and misconduct.


Title Image Source: Shaaralore


This article has been written by Ilina Peehu. Ilina is a third year law student at Gujarat National Law University, Gandhinagar.