1. This appeal has arisen out of an action for passing off instituted by the respondents against the appellants to restrain them from using the name of Philips or any similar mark on watches, clocks and the like so as to pass off their goods as those of the plaintiffs.
2. The respondents No. 1 is a limited company incorporated under the laws of the Netherlands and having its registered office at Emmasingel, 29, Eindhoven, Holland, and respondent No. 2 is its subsidiary limited company incorporated in India. The company in India is in the manufacturing of a wide range of electrical gods including al kinds of lighting products, radios, electronics tubes, semi conducting devices and industrial component articles, materials, electroacoustical and cinematographic recording and reproducing apparatus, domestic refrigerators and deep freezers, cryogenic equipment, photographic and optical apparatus, instruments, sound recording, reproducing and simplifying equipment, electronic microscopes, electrotechnical, scientific welding, measuring, weighing, medical, electro-medical and X-ray apparatus and equipment both for medical and industrial applications electric house-hold appliances and machines, apparatus and equipment for telecommunication and for intercommunication, automatic and line telephony apparatus and equipment, dark room timers, multiple electric clocks and timers.
3. The defendants, a partnership firm are carrying, on business in the sale of watches, clocks, time-pieces and accessories thereof under the trade mark 'Philips' since 1954. They are also doing business under the name and style of Musical Trading Company.
4. The case set up by the plaintiffs is that they have built up a vast amount of goodwill by the sale and advertisement of their goods in India.
5. The trade mark 'Philips' has become a household word and has acquired an enviable reputation in Indian and throughout the world and is associated by the public and traders with the goods of the plaintiffs. The defendants being aware of the reputation and goodwill attached to the Trade Mark 'Philips' in order to trade upon their reputation dishonestly adopted the said trade mark for their watches and clocks. It was further asserted that the defendants who were selling watches and clocks under the trademark 'Philips' were also selling radios, gramophone records side by side and that they could knot have any other purpose in adopting the trade mark 'Philips' but to pass off their goods as those of the plaintiffs.
6. The defendants controverted the claim and pleaded that they have been using the trade mark 'Philips' for watches, clocks, time-pieces and accessories thereof bona fide for several years since the year 1954 whereas the plaintiffs had never marketed any Philips watches in India. They, therefore, claimed that they have built up a considerable goodwill in the trade mark of Philips for their watches and clocks and the plaintiffs had no right to the exclusive use of the said trade mark or to restrain them from using it for their watches and clocks.
7. On the pleadings of the parties, the following issues were framed by the trial Court :--
1. Whether the plaintiffs are duly incorporated companies and this suit has been validly instituted for and on behalf of those companies by person or persons duly authorised in that behalf?
2. Whether in India the plaintiffs have been selling their goods detailed in para 4 of the plaint with the trade name 'Philips' on those goods? If so, since when?
3. Whether the plaintiffs have acquired any goodwill for the sale of the goods referred to in issue No. 2 and the trade mark 'Philips' has acquired a reputation which is associated by the public and the traders with the goods of the plaintiffs?
4. Whether the defendants has deliberately and dishonestly adopted the trade mark 'Philips' for watches, clocks, radios, gramophone records etc. to pass off those as the goods of the plaintiffs, is so, since when to what effect?
5. Whether the defendants started selling its goods under the trade mark 'Philips' in 1954 and since then the defendant is selling its goods under that mark? If so, what effect?
6. Whether the defendants has acquired any goodwill for the trade mark ';Philips' on the goods referred to above?
7. Whether the plaintiffs have suffered any damage because of the marketing of the goods referred to above by the defendant under the trade mark 'Philips'? If so, how much damage have the plaintiffs so suffered ?
8. Whether the plaintiffs are entitled to recover from the defendant any amount on account of damages, if any, suffered by the plaintiffs? If so, how much amount are the plaintiff entitled to so recover?
9. Whether and if so to what relief or reliefs are the plaintiffs entitled and on what terms if any
Issue No. 1 was conceded by the defendants. Issues Nos. 2 to 4 were answered in favour of the plaintiffs and Issues Nos. 5 and 6 against the defendants. Under Issues Nos. 7 and 8 it was held that the plaintiffs had failed to prove that they had suffered any actual damages and so were held entitled to only a nominal damages assessed at Rs. 100/- The findings of the trial court on issues Nos. 1 and 2 were not challenged which are accordingly affirmed. Issues Nos. 3, 4, 5 and 6 inter-connected and shall be disposed of together.
8. The facts found by the learned trial Judge are not disputed by the learned counsel for the appellant and may be stated thus:
The plaintiffs were manufacturing and selling a large range of goods in the engineering and electrical fields and they had been in the business since after the end of 1st World War. In after the end of 1st World War. In India, they started manufacturing operations in the year 1948 and soon its products acquired great reputation and the trade mark 'Philips' became a house-hold word. The company progressed so fast that its sale in India in the year 1967 exceeded Rs. 23 crores. The respondents were incurring lot of money on the publicity and advertisement of their products and advertisement of their products and the amount spent in this regard in the year 1964 was 22 lacs which rose to Rupees 38 lacs in they 1967. The respondents have never manufactured watches, or clocks but they have been manufacturing clock-work-timers used in photography and the radio clocks. The watches and clocks are being sold on the same counter along with radio, transistor and other electrical appliances even by the defendants.
9. As regards the defendants, the findings recorded were that they have been selling watches and clocks with the mark 'Philips' since 1954 and their sales were to the time of Rs. 20,000/- per year. The defendants never issued any advertisement of their watches and clocks with the trade mark 'Philips' They had no association with the word 'Philips' nor there was any explanation forthcoming as to why they chose the word 'Philips' for their watches and clocks. On these facts it was held that the trade mark 'Philips' to the knowledge of a common man was associated with the products of the plaintiffs and that watches or clocks bearing the name Philips would lead an ordinary customer to believe that it was their product.
10. The first contention raised to assail the correctness of the impugned judgment was that he trade mark by virtue of the provisions of S. 8 of the trade and Merchandise Marks Act 1958 read with R. 26, can be got registered only in respect of goods specified in the various clauses of fourth schedule. The trade mark in the present case was got registered in respect of goods specified in clause (14) of Sch. IV which did not include watches and clocks. It was further contended that the trade mark in the present case being of a non-distinctive character was registered with a disclaimer as envisaged by S. 17(b) disclaimer as envisaged by S. 17(b) which disentitles the plaintiffs for claiming its exclusive use. So it was argued, that the plaintiffs have no right to object to the use of the said trade mark by the appellants or to an Injunction of the learned counsel are wholly misconceived. The two grounds urged misconceived. The two grounds urged namely that the registration certificate does not cover the watches and clocks does not cover the watches and clocks and that there is a specific disclaimer in it would have been of significance if some rights under the Act were being enforced by the plaintiffs. On the other hand, in a passing off action these factors of no consequence and the proviso to S. 17 itself has confined the effect of disclaimer to the enforcement of the rights under the Act. The scope of S. 17 and the effect of the said proviso was explained by the Supreme Court in explained by the Supreme Court in Registrar of Trade Marks v. Ashok Chandra Rakhit Ltd. (1955) 2 Mad LJ 76 : (AIR 1955 SC 558) thus :--
'The real purpose of requiring disclaimer is to define the rights of the proprietor under the registration so as to minimise, even if it cannot wholly eliminate, the possibility of extravagant and unauthorised claim being made on the score of registration of the trade marks. The proviso to the section preserves intact any right which the proprietor my otherwise under any other law have in relation to the mark or any part thereof. The disclaimer is only for the purposes of the Act. It does not affect the rights of the proprietor except such as arise out of registration. If the proprietor has acquired any right by long user of those parts or matters in connection with goods manufactured or sold by him or otherwise in relation to his trade, he may, on proof of the necessary facts, prevent an infringement of his rights by a passing off action or a prosecution under the Indian Penal Code. Disclaimer does not affect those rights in any way.'
The rule laid down by the Supreme Court fully covers the present case and the cause here being a passing off action the plaintiff could not be non-suited on either of the said grounds. The contentions raised by the learned counsel therefore, have no bearing on the rights of the plaintiff and are accordingly ruled out.
11. The only point which was seriously pressed into service was that the acquisition of an exclusive right to trade mark in connection with a particular type of article of commerce cannot entitle the owner of that right to prohibit the use by others of such mark or name in connection with goods of a totally different character, because on action for passing off is a common law remedy for passing off is a common law remedy for passing off by a person of his own goods as those of another and unless it was established by the plaintiffs that his goods and the goods sold by the defendant are of alike or similar nature, it could not be said that the use of the trade mark in dispute was likely to lead to any confusion. As the respondents were neither manufacturing nor marketing clocks and watches in India, and there was no trade link between the goods of the plaintiff and the defendants, it was argued, there was no likelihood of any deception being practised on a customer of average intelligence so as to create belief in his mind that the good sold by the defendants are the production of the plaintiffs. In support of this contention, the learned counsel relied on McCulloch v. Lewis A. May (Produce Distributors) Ltd. (19476) 2 All ER 845, Anglo-Indian Drug and Chemical Co. v. Swastik Oil Mills Co. Ltd., AIR 1935 Bom 101, Thomas Somerville v. Schembri (1887) 12 AC 453, Thomas Bear and Sons (India) Ltd. v. Prayag Narain, AIR 1940 PC 86, National Electric Stores v. General Electric Co. Ltd., AIR 1944 Lah 386 and Durga Dutt Sharma v. Navarantna Pharmaceutical laboratories, AIR 1965 SC 980. So far as the legal proposition is concerned, I need not review the cases relied upon by the learned counsel over again as all them were considered at length by Division Bench of this Court in Delco Engineering Works v. General Motors Corporation, ILR (1974) 1 Punj and Har 502 and the Principles governing the passing off action were enumerated thus:--
'That an action for passing off is founded on the desirability of preventing commercial immorality dishonesty on the part of a trader who by using a particular mark, whether registered or unregistered, wants to falsely represented that his goods are the goods of some one else so that he can take unfair advantage of the reputation of that other person in the market., the likelihood or probability of deception depends on a number of factors and is a question of fact in the circumstances of each case. Phonetic or visual similarities, get up, packing or visual similarities, get up, packing or other writings and marks on the goods or on the parcels in which they are offered for sale and other resemblances may help in determining the probability of deception on its own facts. If there is no link between two trades, on in other words, the two trades are not closely correlated and the goods are not analogous, a conclusion may be reached in a particular case that the chances of deception are to remote to be taken notice of so as to restrain the defendant from selling his goods under the same or similar trade mark. The whole thing has to be approached from the point view of a man of average intelligence and of imperfect recollection. It is true that no proprietor of a trade mark acquired monopoly for the use of that mark but at the same time a trader cannot be allowed in justice and equity to let his goods pass of as those of another.'
Further if the facts in Delco's case (supra) are analysed, it would be evident that the present case is fully covered by the rule laid down in that case. The facts involved there were that the plaintiff General motors a Corporation incorporated in the United States of incorporated in the United States of America, which was carrying on business on a large scale throughout the world, including India, in the manufacture and sale of automobile goods inter alia motor-cars, locomotives, diesel engines, electric motors, airplane engines, refrigerating ad heating equipment, household appliances and accessories the of. Till the year 1957 was also manufacturing and marketing coaster brakes and hubs for bicycles., They claimed that they had acquired world-wide reputation for superior quality of their goods under the trade mark 'Delco' which was got registered by them in India as well in he year 1962 for various classes of goods as specified in the registration certificate. Their registration certificate. Their registration certificate covered pedals for land vehicles and springs, but they did not hold any trade mark for pedal axles for push bicycles. The defendants who were manufacturing bicycle axles applied for registration of the trade mark Delco' in respect of bicycle accessories and parts thereof, including pedal axles. It was allowed by the Registrar. The plaintiffs then filed a suit for a perpetual injunction restraining them from using the trade mark 'Delco' for pedal axles. The contention put forward by the defence before the Bench was rejected with the observation that the plaintiff-company till the year 1957 was manufacturing bicycle accessories and that cycle spare parts as well as automobile spare parts were sold on the same premises at several places. One of the other factors which weighed with the Bench was that the defendant had nor reason to sell his goods under the trade mark 'Delco' and the motive for use of that trade mark could be none else but to take under advantage of its popularity gained by the plaintiff-company.
12. In the present case, the respondent-company though is not manufacturing watches and clocks, but they are manufacturing and marketing clock fitted radios and transistors. It has also come in evidence that the principal company-respondent No. 1 is manufacturing and marketing clocks and watches in Holland. The trial Court also rightly accepted the contention of the respondent that watches and clocks are sold by the dealers on the same premises, and even the appellants are doing so. Further there is absolutely no explanation on the record as to why the defendants chose the trade mark 'Philips' for marketing the watches and clocks.
On these fact, this case would be squarely covered by the decision in Delco's case (supra), and the findings on issues Nos. 3 to 6 are accordingly affirmed.
13. In the result, this appeal fails and the same is hereby dismissed with no order as to costs.
14. Appeal dismissed.