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B.K. Engineering Co. Vs. Ubhi Enterprises (Registered) and anr. - Court Judgment

LegalCrystal Citation
SubjectIntellectual Property Rights
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 99 of 1984
Judge
Reported inAIR1985Delhi210; 27(1985)DLT120
AppellantB.K. Engineering Co.
RespondentUbhi Enterprises (Registered) and anr.
Advocates: N.K. Anand,; Amarjit Singh, ; Parveen Anand,;
Cases ReferredReddaway v. Banham. It
Excerpt:
law of torts--passing off--the test is the impression likely to be produced on the casual and unwary customers-'careful' examination of the product is not implied--not necessary to prove that members of the public were actually deceived.;the appellants (original plaintiffs) are manufacturing oicycle bells from 1971, and using their house mark 'b.k.' and their name is also stamped on the product as 'b.k. engineering co.' their products are manufactured under the trade marks 'crown' and 'venus'. the respondents (original defendants) started manufacturing bicycle bells in 1981 and their product is marked 'b. k-81' and their name is also stamped on the product 'u.b.h.i. enterprises regd.' the appellants filed a suit for permanent injunction to restrain the respondents from marketing their.....avadh behari, j. (1) 'in the interests of fair trying and in the interests of all who may wish to buy and sell goods. the law recognises that certain limitations upon freedom of action are necessary and desirable. in some situations the law has had to resolve what might at first appear to be conflicts between competing rights. in solving the problems which have arisen there has been no need to resort to any abstruse principles but rather, i think, to the straightforward principle that trading must not only be honest but must not even unintentionally be unfair'. [parker knoll ltd. v. knoll international ltd. lord morris). (2) i preface my judgment with this statement of the law the reason is that it contains a complete answer to the question raised in this appeal. (3) the plaintiffs, the.....
Judgment:

Avadh Behari, J.

(1) 'IN the interests of fair trying and in the interests of all who may wish to buy and sell goods. the law recognises that certain limitations upon freedom of action are necessary and desirable. In some situations the law has had to resolve what might at first appear to be conflicts between competing rights. In solving the problems which have arisen there has been no need to resort to any abstruse principles but rather, I think, to the straightforward principle that trading must not only be honest but must not even unintentionally be unfair'. [Parker Knoll Ltd. v. Knoll International Ltd. Lord Morris).

(2) I preface my judgment with this statement of the law The reason is that it contains a complete answer to the question raised in this appeal.

(3) The plaintiffs, the present appellants, B. K. Engineer ing Co. of Delhi, have brought a passing-off action against the defendants, the present respondents, Ubhi Enterprises of Ludhiana. The plaintiffs claim permanent injunction, accounts and damages. The plaintiffs and the defendants are in the same line of business. Both firms are engaged in the manufacture of cycle bells. The plaintiffs started manufacturing bells as early as 1971. They adopted 'B.K.' as their house mark they, manufacture cycle bells under the trade mark Crown and Venus. The house mark 'B.K.' is used, prominently and in conspicuous manner, on the cartons as a circular logo device in this form 'B.K.-81'. On the stand of the bell and the carton the name of the manufacture 'B.K. Engineering Co.' is stamped.

(4) The defendants are marketing cycle bells under the. trade mark 'B.K.-81'. They entered the manufacturing line in 1981. The mark 'B.K.-81' is embossed on the dome-shaped cover as well as on the push handle. 'UBHI Enterprises Regd ' is engraved on the dome-shaped cover alone; with words ''B.K. 81'. On the stand of the bell and carton their manufacturing name Ubhi appears.

(5) Now the plaintiffs' case is that the defandants' mark ''B.K.-81 is deceptively similar to the house mark 'B.K'' of the plaintiffs and is bound to cause confusion and deception in the course of trade.

(6) The plaintiffs attach cardinal importance to their house mark 'B.K.' They claim that they are the distinguishing characterstics of their goods. They seek to restrain the defendants from marketing their products under the trade mark 'B. K.-81'.

(7) The plaintiffs made an application for a temporary injunction seeking to restrain the defendants from using the mark 'B.K.-81' on their cycle bells till the decision of the suit. A learned single judge by order dated 30-4-1984 refused the injunction. From his order the plaintiff appeal to this Court.

(8) The learned judge recorded the statement of Manmohan Singh, a partner of the defendant firm. He admitted that the plaintiffs have been selling cycle bells under the trade marks Crown and Venus. Immediately the judge appointed a local commissioner who, accompanied by the parties, went to the market on that very day. The commissioner found that the Crown and 'B.K.' bells of the plaintiffs were on sale in the market. He collected plaintiffs' cartons, big and small, having in a conspicuous manner 'B.K.' circular house mark on. them,

(9) The learned judge held that on the dome-shaped cover of the bell manufacturer's mark UBHI. Enterprises of the defendants is engraved and 'if any customer sees the bell carefully he can at once make out that the same is not manufactured by the plaintiff but by the defendant whose name appears on the bell'. On balance of convenience he was disinclined to debar the defendants from manufacturing and selling bells bearing 'B.K.-81'. He thereforee refused injunction but directed the defendants' to maintain accounts.

(10) Whether the learned Judge was right in refusing injunction on the admitted facts that the plaintiffs' manufacturing name and house mark is 'B.K.' and the defendants' trade mark is 'B.K.-81' is the question for decision. Nor is this in dispute that the defendants started manufacturing bells in November 1981 and the plaintiffs much earlier. What is disputed by the defendants is that the plaintiffs do not manufacture bells under the trade mark 'B.K.'. It is asserted that the plaintiffs .trade marks are Crown and Venus and not 'B.K.' Modem character of the tort: An expanded Passing-off.

(11) The passing-off action arose in the nineteenth century and depends upon the simple principle that 'no body has any right to represent his goods as the goods of somebody else' (Reddaway v. Banham per Lord Halsbury). In other words, a man is not to sell his goods or his services under the pretence that they are those of another man (Perry v. Truefitt per Lord Langdale (M.R.) This is the classic form of passing-off. Now this tort has been extended in the leading case of Erven Warnik vs Townend and Sons .Lord Diplok said that 'what the law protects by a passing-off action is a trader's property in his business or goodwill' (p. 932). Following Lord Parker in A.G. Spalding v. Aw Gamage Ltd. he said that the right the invasion of which is the subject of passing-off actions is 'the property in the business or goodwill likely to be injured by the misrepresentation' The false suggestion by the defendant that his business is connected with the plaintiff's would damage the reputation and thus the goodwill of the plaintiff's business.

(12) The modern tort of passing-off has five elements: (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 trader (in the sense that this is a reasonably foreseeable consequence) and (5) which crises actual damage to a business or goodwill of the trader by whom the action is brought. (Erwen Warnik supra at 932- 933 per Lord Diplok).

(13) 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 and misleading devices, the benefit of the reputation already achieved by a rival prader. The defendant seeks to acquire this benefit by passing off his goods as and for the goods of the plaintiff.

(14) The controversy in this appeal revolves round the mark B.K. This is the plaintiff's house mark. It is the badge of their organisation and is used in advertisement. It is the logo device which they use on the cartons of their 'Crown cycle bells. On the bells they give the name of the manufacturer as 'B.K. Engineering Co.' If 'B.K.' is the distinctive indicium of the plaintiffs' product, will not the buying public be misled by the. defendants' product 'B.K.-81' This. is the real question in this appeal.

(15) 'B.K.' is the plaintiffs' house name. Under this banner they carry on business. These two letters have become associated with their goods. They have been in the manufacturing line Mnee 1^71. In 1981 the defendants started manufacturing bells with the trade mark 'B.K.-81'. In my opinion this is prima facie a case of injury to the plaintiffs' business goodwill. (Spalding (supra) per Lord Parker). Now goodwill was defined by Lord Macnaghten as

'THE benefit and advantage of the good name, reputation and connection of a business......the attractive force which brings in custom'

(IRC v. Muller and Co.'s Margrinc Ltd.

(16) The central question in each ease is whether the name or description given by the defendant to his goods is such as to create a likelihood that a substantial section of the purchasing public will be misled into believing that his goods are the goods of the plaintiff. (Parkar Knoll Ltd. v. Knoll International Ltd. The defendants say that they are entitled to use 'B.K.-81'as B.K. is an abbreviation of their deceased mother's name. Balwant. Kaur. I cannot accept this argument. That the defendants use their mother's name with no intention to deceive anybody does not mean that such likelihood has not been created. [Parker Knoll (supra) at p. 290 per Lord Devlin].

(17) It was than said that the defendants are using 81 in addition to letters 'B.K.' to distinguish (heir product from the plaintiffs' product. This is merely 'garnishing', as the expression goes, merely altering the name by the addition of 81. Even the altered name is likely to mislead. The defendants product will deceive people into thinking that their goods .are the goods of the plaintiffs. Unfair competition

(18) The setting of the law of passing'-off is competition between traders. There is a real risk of injury to the reputation of the plaintiffs if the defendants are nut prevented from selling cycle bells under the name 'B.K.-81'. This is a misappropriation of plaintiffs' name. 'B.K.-81' is strongly suggestive of association with the plaintiffs, or some license or endorsement from them. This is called 'misappropriation of business reputation'. This is a conduct which will come into the new, generalised, idea of 'unfair competition'.

(19) In cases of unfair competition Lord Scarman has emphasised the necessity to bear in mind

'THE balance to be maintained between the protection of a plaintiff's investment in his product and the protection of free competition. It is only if a plaintiff can establish that a defendant has invaded his 'integengible property right' in his product by misappropriating descriptions which have become recognised by the market as distinctive of the product that the law will permit competition to be restricted. Any other approach would encourage monopoly. The new small man would increasingly. find his entry into an existing market obstructed by the large traders already well known ax operating in it.'

(Cadbury Schweppes Ply, Ltd. v. Pub Squash Ply, Ltd Use of name without consent

(20) As examples of unauthorised use of the plaintiffs' commercial name three cases may helpfully be referred to. In Shorts Ltd. v. Short a firm of wine merchants 'Short's Ltd.' obtained an injunction against one. Short, who set lip a similar business and styled it 'Short's'.

(21) In Maxim's Ltd. v. Dye it was held at Common Law as well as on the basis of EEC. Treaty that a famous restaurant in Paris could obtain an injunction against a defendant operating a restaurant in Norwich under the same name.

(22) In Parker-Knoll Ltd. v. Knoll Intel-national Ltd. (supra) both parties were manufacturers of furniture, the plaintiff being a company well-known in the United Kingdom and the defendant an American Company which had only recently begun to trade in England. Notwithstanding that the defendant company did no more than use its own name on its furniture, the House of Lords, by majority, granted an injunction to restrain it from continuing to do so without distinguishing its goods from (hose of the plaintiff. The plaintiff had established that its name had come to denote, goods made by it alone and not goods made by someone else assessing or adopting that name, and the use by the defendant of a similar name did, in the opinion of the majority, amount to the false representation that its goods were the plaintiff's goods. Varieties of Passing-off

(23) Passing off may take many forms. With the changes in the technology of the trade infinite varieties of passing off will spring up. Radio, television and newspaper advertisement have added a new dimension to this tort. The crux of the matter is not the intention of the defendant in taking a certain name, but the probable affect of such action on the minds of the public. However innocent may be his intentions, he will be restrained from trading under name so much like that under which the plaintiff who was first in the field trades, that the public are very likely to be deceived into systematic, and not merely occasional, confusion. (Hendriks v. Montagu :Society of Motor Manufacturers v. Motor Manufacturers' Ins. Co. This is the essence vf passing off.

(24) Take this very case. 'B.K.' is the house name of the plaintiffs, the producers of the article. Crown bell that has won popular favor. The defendants have attached this name to the article they produce, 'B.K. 81' bell. The probability of deception and confusion is certainly there. 'B.K.-81' conveys

'A false impression, has something of a faculty ring about it.-, it is not sterling coin; it has no right to the genuine, stamp and impress of truth.'

(Reddaway v. Banham (supra) per Lord Macnaghten.

(25) In principle and in substance I can see no difference between the present case and the cases of unauthorised use of name I have just referred to. Only the badge is different. The instrument of fraud is the same, namely, a misleading symbol. As Lord Macnaghten said:

'FRAUD is infinite in variety. Sometimes it is audacious .'.nil unblushing; sometimes it pays a sort of homage to virtue, and than it is modest and retiring it would be honesty itself if it could only afford it. But fraud is fraud all the same, a.nd it is the fraud and not the manner of it, which calls for the interposition of the Court.'

[Reddaway v. Banham (supra) ] Injuring to Goodwill

(26) The true basis of the action is that the passing off. injuries the right of property in the plaintiff, that right of property being his right to the goodwill of his business (Cadbury (supra) at p. 221)]. The plaintiff is entitled to protect the goodwill in his business. Equity will intervene to protect the goodwill. Injunction is an equitable remedy. This doctrine now has the blessing of the House of Lords in Erwen Warnik v. Town end (supra) and of the Privy Council in Cadbury Schweppes v. Pub. Squash Co. (supra) and Star Industrial Co. Ltd. v. Yap Kwee Kor. The right the invasion of which is the subject of passing off actions is said to be I he property of the business or goodwill likely to be injured by misrepresentation.

'GOODWILL is the attractive force which brings in custom'.

And if one steals goodwill one steals custom. [Trego v. Hunt per Lord Macnaghten]. Romar L. J. pointed out in Samuelson v. Producers Distributing Co. Ltd. at that injunctions restraining ' classic' passing off were instances of a much wider principle, namely, that equity will always restrain irreparable injury to the plaintiff's property.

(27) What the judge has to decide in a passing off action is whether the public at large is likely to be deceived. What would be the effect of the representation upon the prospective purchaser Instances of actual deception may be useful as examples, and evidence of persons experienced in the ways of purchasers of a particular class of goods will assist the judge. But his decision does not depend solely or even primarily on the evaluation of such evidence. The Court must in the end trust to its own perception into the mind of the reasonable man. This is in accordance with the dictum of Lord Parker in Spalding v. Gamage [Parker Knoll pp. 291-292 (15) per Lord Devlin].

(28) It is clear to me that there is a prospect of injury to the plaintiffs' goodwill. If the defendants appropriate it without permission they limit the plaintiffs' capacity in respect of their other products. There was some debate before us whether the plaintiffs are manufacturing bells under the trade mark 'B.K' Whether they are or they are not, is a matter which remains to be established at the trial. But one thing is certain. The defendants have pre-empted commercial exploitation of plaintiffs personality. They have pre-empted plaintiffs' capacity to extend their business under their name 'B.K.' (See Sheraton Corp. of America v. Sheraton Motels Ltd. (1964) Rpc 202x16). The question whether the plaintiffs manufacture, cycle bells under the trade mark 'B.K.' is not a pertinent question; the really pertinent question is whether the name 'B.K.' adopted by the defendants as the trade mark of their product is likely to mislead the purchasing public into thinking that it is a produce of B.K. Engineering Co. It seems to me that the public or the section of the cycle using public is likely to be deceived and confused. That the plaintiff's are not manufacturing bells under the trade mark 'B.K.' is neither here nor there. The centra) question is whether there is misappropriation of a name or not.

(29) Both firms are engaged in a 'common field of activity'. There is a real possibility that the public to which the defendants address their wares would draw the association with the plaintiffs of which they complain. The frontiers of passing off

(30) This branch of the law of tort is still developing and expanding. English, American, Australian and Canadian cases have evened a new vista in this branch of law. The wine cases in England set a new trend. (Bollinger v. Costa Brava Wine Co. Ltd. (1959) 3 All E.R. 800(17), Champagne case). Vine Products Ltd. v. Mackenzis and Co. Ltd (1969) Rpc 1 (18) (Sherry case), John Walker and Cons Ltd. v. Henry Ost and Co. Ltd., (1970) 2 All Er 106(19) (Scotch whisky case), In Bollinger's case Dankwerts J. at p. 805 said that law in this respect has been concerned with unfair competition between traders rather than with the deception of the public which may be caused by the defendant's conduct. 'The right of action known as a passing off action is not an action brought by the member of the public who is deceived but by the trader whose trade is likely to suffer from the deception practiced on the public but who is not himself deceived at all.' Wine cases were approved by the House of Lords in Warnik v. Townend (supra). Privy Council in Cadbury (supra) referred to American and Australian decisions and propounded the doctrine of unfair competition, as we have seen. From the classic form to the modern tort of passing off the law has moved on. I would use of the law the words Galileo used of the earth: 'But it does move'. The law has changed because of the development of new business techniques and new trading devices. One country alone may start the process. Others may follow. At first a trickle, then a stream, last a flood. We should not be) left behind on the bank'.........We must take the current when it serves, or lose our ventures': Julius Ceaser, Act Iv, Sc III.

(31) In some Canadian cases the courts spoke not of passing off but of 'wrongful appropriation of the plaintiff's personality', he having a 'proprietary right in the exclusive marketing for gain of his personality' (See Alhens v. Canadian Adventure Camps Ltd. and Frazer 'Appropriation of Personality' in (1983) 99 Law Quarterly Review 281).Salmends editor has opined that 'it may be that misappropriation of personality is on the verge of recognition as a distinct tort'. (Salmond and Houston on Law of torts 18th ed. p. 379).

(32) The plaintiffs, in my opinion, have prima facie shown that they are likely to sustain injury by defendants' misuse of their 'goodwill'. The crux of the case is that 'B.K.' is a word or device which is distinctive of plaintiffs' goods. It is a distinctive indicium of the plaintiffs' bells. The defendants have misappropriated this indicium which is distinctive of the goods manufactured by the plaintiffs. It is not essential that the plain- tiff be identified by name, provided the mark is recognised as indicating the origin of the goods or services and the plaintiff is in fact that source. (Powell v. Birmingham Vinegar Brewery Co. Ltd. . A message is conveyed by a memorable word or name to the purchasing public that the goods are of the plaintiff. So the potential purchaser is misled and deceived if there is misappropriation of name, symbol or slogan by a competitor.

(33) An unauthorised use of name can lead to injury in various waya. It is not necessary that the defendant directly takes business from the plaintiff, for it seems that a professional man or professional association have a cause of action in respect of unauthorised use of their names in a manner likely to cause harm to their professional activities, for example, the use of a medical man's name to promote a quack medicine. In this form the tort is less passing off than 'injurious association' (See Winfield and Jolowicz on tort (12th) (1984) ed. p. 549.

(34) 'B.K.' is the manufacturer's mark of the plaintiffs, This is seen by the public. In a 'common field of activity' it is likely to deceive prospective purchaser if the defendants are allowed to market their product under the mark 'B.K.-81' There is likelihood of diversion of trade from the plaintiffs to the defendants. This is an injury against which an injunction is directed in the action of passing off. The plaintiffs can well complain that their goodwill suffers from an 'injurious association' with the defendants' goods. In Harrods Ltd. v, R. Harood Ltd. the public thought that the great departmental store had stopped to money lending. An action of passing off lies if one trader represents his business as being that of or connected with that of, the plaintiff, as. is the case here. There is a false suggestion by one competing trader in the same line of business that his business is connected with that of the other. This, I apprehend, would damage the reputation and thus the goodwill of the plaintiffs' business.

(35) The types of injury to goodwill may take such forms as where there is an apprehension of (a) diversion of sales and (b) 'injurious association', (c) misappropriation of business reputation, (d) misappropriation of personality. They are all species of one genus, unfair trading or unfair competition. They are examples of dishonest trading. They are badges of common law fraud. Examples of injurious falsehood. Deception of the public is an important component of this tort. If there is no deception, there is no liability for taking advantage of a market created by another [Cadbury (supra) at p. 218].

(36) Appropriation without consent of the plaintiffs reputation is sufficient to ground a claim to relief. In the Australian case Handerson v. Radio Corpn. Evatt Cj and Myers J. put it as follows:

'THE wrongful appropriation of another's professional or business reputation is an injury in itself, no less, in our opinion, than the appropriation of his goods or money.'

Defendants' Case

(37) It was argued that the plaintiffs are guilty of delay and acquiscence. I cannot accept the argument. There is nothing to show that the plaintiffs encouraged the defendants to go ahead with 'B.K.-81' bells. They sued as soon as they learnt of the defendants' activities. The defendants started business in '1981. The plaintiffs brought the suit in February 1984. The defendants have to show that knowingly the plaintiffs kept quiet and thereby encouraged them. go ahead with their business. There is no such suggestion

(38) Counsel for the defendants submitted that the plaintiffs carry on business in Delhi and the defendants at Ludhiana and there is no change of confusion. This argument does rot appeal to me. 'Goodwill does not necessarily stop at a frontier' (C & Modes vs C & A Waterford Ltd.

(39) We were referred to telephone directory to show that 'B.K.' is a business name used by hundreds of people. I am not impressed by this argument. It must be remembered that here we are concerned with a case where both firms are engaged in a 'common field of activity'. The question arises whether the defendants are misleading the public into buying their goods in the belief that they emanated from the plaintiffs. Most defendants in these cases start business fully well knowing of the fame of the plaintiff's name and mark [Equity Doctrines and Remedies by R.P. Meagher (1984) ed. 857]. hey want to cash in on the popularity of the plaintiffs product. Whether the goods are inferior or superior every infringement is. in a way, a tribute to the excellence of the p1antiffs wares.It is a measure of the popularity of plaintiff's goods.

(40) The mischief in this case is that the defendants have taken their rival trader's name and made it their trade mark. B.K. is the striking and significant feature of the plaintiffs' name. This trade name and reputation the defendants have appropriated to their use. The. old mischief was in the imitation of get-up or appearance of the plaintiff's goods. The new mischief is in injury to goodwill. The liability is now wider than before. [See Winfield and Jolowicz on tort ( 12th) 1984 ed. p. 5461. The main concern of the law now is to protect the plaintiffs property in the goodwill.

(41) Nor do I agree with the learned Judge on the balance of convenience. In American Cyanamid v. Ethicon Ltd (1975) A.C. 396(25) the House of Lords laid down the principles governing the grant of injunction. The relative strength of each partv's case as revealed by the affidavit evidence has to be seen If the defendant's business is a recent venture as in this case. it would be proper to grant an injection to prevent the violator of the plaintiff's rights if the defendant can be compensated in damages. It is the defendants' own case here that their first sale was made in November 1981 while the Plaintiffs started their business in 1971. We were shown advertisement in trade journal of 1974 and 1979. It is true that evidence remains to be led by both parties. Of actual damage to the plaintiffs there may or may not be much evidence. The improbability of their proving much is not the same thing as the legal certainty that they can prove nothing. The balance, on the whole, in my opinion, tilts in favor of the plaintiffs. Mainly for the reason that the defendants are a new comer as compared to an established trader. On balance I am inclined to grant injection.

(42) Counsel contended that there should be no injection till the plaintiffs establish at the trial upon evidence that the word 'B.K.' is calculated to deceive the ultimate customer I do not agree. It is well to remember what Ford Parker said in Spalding v. Gamage (supra) at 286, 287. There may, of course be cases of so doubtful a nature that a judge cannot properly come to a conclusion without evidence being led on the point; but in a passing off action the matter complained of is calculated to deceive, in other words, whether it amounts to misrepresentation is a matter for the judge who, looking at the documents and evidence before him, comes to his own conclusion, and to use the words of Lord Macnaghten in Payton & Co. Ltd. v. Snelling Lampard & Co., 'must not surrender his own independent judgment to any witness whatever'.

(43) The question at this stage is only of a temporary injunction. For that purpose the misrepresentation complained of is certainly of such a nature as to give rise to a strong probability of confusion in the minds of the purchasing public. I refrain from amplifying this point so as not to prejudice any question which may arise as to damages or permanent injunction. It is sufficient to say that the misrepresentation being prime fade established, being in its nature calculated to deceive, the plaintiffs are entitled to a temporary injunction. The gist of the plaintiffs' complaint is that their trade name, their house mark are being invaded. On the invasion of their right to property in the goodwill and business reputation they found their claim. In my opinion, nothing in arguments has been shown to me to displace the plaintiffs' prima facia right to relief.

(44) I have dealt with the question of goodwill and reputation at some length. The reason is that the learned judge did not consider this aspect at all. What he did consider was that the cartons of the plaintiffs and the defendants are different. Their colour schemes and get-up are different. But what he missed is that on cartons of the plaintiffs their distinctive indicium 'B.K.' is prominently printed in a circular device. Apart from the manufacturer's mark the name of the manufacturing company is also given as B.K. Engineering Co Ltd. Now if the defendants market their product as'B.K.-81'the conduct is calculated to injure plaintiffs' goodwill. It is not essential that the person deceived should know the name of the plaintiff; it is enough 'if a person minded to obtain goods which are identified in his mind with a certain definite commercial source is led by the false statements to accept goods coming from a different commercial source' (Plomein Fuel Economiser Co. Ltd. v. National School of Salesmanship Ltd. per Lord Greens). It is enough if the customers are caused to wonder whether the two products come from the same source when they do not do so in fact.

(45) The learned judge observed that if one 'carefully' examines the products one can distinguish the defendants' bells from the plaintiffs' bells as the name of U.B.H.T. Enterprises is engraved on the defendants' bell. I do not agree. It is no answer to a complaint of misrepresentation to say that an observant person who made a careful examination would not be misled. The test is the impression likely to be produced on the casual and unwary customer, (per Lord Selborne in Senger Manufacturing Co. v. Loog

(46) It is not necessary to prove that any members of the public were deceived. An action will lie where it is to be expected that in due course the act of the defendant would be calculated to cause confusion in the minds of the purchasing public (Draper v. Trist Restatement of the Law: A Summary

(47) Lord Parker in A.G. Spalding (supra) she wed that in a passing off action the right in question is a right of poverty. A plaintiff complains of the invasion of this right to property. The property is in business or goodwill likely to be injured by misrepresentation. If the mark is distinctive of the plaintiff's goods in the eyes of the public or a class of the public any misrepresentation is likely to deceive the ultimate customer, Property is not in the mark, name or get up improperly used by the defendant. But the property is in business or goodwill likely to be injured by misrepresentation. The foundation of the modern tort of passing off is the infringement of right to, property. A plaintiff can say that the defendant is infringing his name which is distinctive of his goods. A misuse of that name is hardly consistent with fair or honest trading, as Lord Parker said. The same emphasis was laid by Lord Diplosk when he spoke of 'commercial honesty' [Wamick v. Townend (supra) at p. 933] and Lord Fraser of 'business morality'' (at p. 944). -

(48) The general rule is that any misrepresentation calculated to give one trader the benefit and advantage of another's goodwill is actionable. Lord Fraser stated the principle as being that

'THE plaintiff is entitled to protect the right of property in the goodwill attached to a name which it distinctive of a product or class of products sold by him in the course of his business.'

[Warnink v. Townend (supra) at 943]

(49) It would be impossible to enumerate or classify all the possible ways in which a man may make the false representation relied on. [A.G. Spalding (supra) p. 284]. In Warnink Lord Diplock said the same thing:

'THE forms that unfair trading takes will after with the ways in which trade is carried on, the business reputation and goodwill acquired' (p. 931).

(50) A fair and honest trader will not give misleading name to his product to the continuing detriment of a plaintiff who has built up his goodwill in the business after years of hard work, for example, 13 or 14 years, as in this case. It is this intangible right to property which the law seeks io protect. The plaintiffs attach capital importance to the password 'B.K.' which represents their house mark and is the indicium of their products. The defendants have not sufficiently distinguished their bells by merely putting the manufacturer's name as Ubhi along with 'B.K.-81'. The risk of confusion in the minds of the public cannot be ruled out.

(51) In Warmink v. Townend (supra) passing off was extended by Lord Diplock beyond classic form because the facts in that case disclosed, as in the present one, 'a case of infair. not to say dishonest trading, of a king for which a rational system of law ought to provide a remedy to other traders whose business or goodwill is injured by it'.(Warnink p. 931). Lord fraser took a broad policy approach:

'BUSINESS normality seems to to require that they should be entitled to protect their goodwill. The name of the tort committed by the party making the misrepresentation is not important.' (p.944).

(52) The modernisation of the tort of passing off lies in this that what was previously a misrepresentation of goods has now become a misappropriation of another man's property in the business or goodwill, or misappropriation of another's personality. You cannot make use of the plaintiff's expensive labour and effort. You cannot deliberately reap where you have not sown. You cannot filch a rival's trade. Passing off is thus a remedy for injury to goodwill.

(53) The question at issue is whether in selling wares the defendants so to refuse and deceive the market that they pass their products as the product of the plaintiffs. The association of the defendants' goods sold under the name of 'B.K.-81' bells with the plaintiffs' manufactory B.K. Engineering Co. and their house mark 'B.K.' is an 'injurious association'. The modern character of the,tort of passing off was clearly brought out in Cadbury (supra). At p. 218 Lord Searman said :

'THE tort is no longer anchored, as in its early nineteenth century formulation, to the name or trade-mark of a product or business. It is wide enough to encompass other descriptive material, such as slogans or visual images which radio, television or newspaper advertising campaigns can lead the market to associate with the plaintiff's product, provided always such descriptive material has become part of the goodwill of the product. And the test is whether the product has derived from the advertising a distinctive character which the market recognoises.'

(54) Applying this recent reformulation to this case what do we find The manufacturers' name B.K. Engineering Co. and the house mark 'B.K.' in the circular device are a part of the 'descriptive material' of the plaintiffs. The description is part of their goodwill and a right of property. 'B.K.' is both a descriptive and distinctive name, commercially speaking. This is clear from the advertisements and cartons of the plaintiffs product in this suit and the suit before the district judge filed in 1980. (Suit No. 1/80, B. K. Engineering Co. v. Metro Cycle Industries, decreed on 12-3-1980 by the court of District Judge). The advertisements of 1974 and 1979 in the cycle trade journals clearly show that B.K. Engineering Co. and house mark 'B.K.' have acquired a distinctive character and became a substantial part of the goodwill of the plaintiffs. The statement of their sales from 1971 to 1979 show that their sales rose from Rs. 20,940 to Rs. 5,06838. During this period their advertisement expenses increased from Rs. 59 in 1972-73 to Rs. 3,480 in 1978-79. These figures show the volume of their sales, advertising expenditure and promotional material.

(55) The mainstay of the defendants' case is that they are using their mother's name 'B.K.' to which they are entitled. I cannot accept this contention. Firstly it is not the defendants name. The name of the partner who appeared before the learned judge and made a statement is Man Mohan Singh. Even if a man uses his own name as to be likely to deceive and so to divert business from the plaintiffs to the defendants he will be restrained. Pears' soap is the stock example of this. A man name William Joban Pears cannot set up a soap business and call his soap 'Pears Soap' He is not entitled to abbreviate his own name so as to lead to deception. [Parker Knoll (supra) at p. 276 per Loard Denning]. Another example I gave in the course of arguments was of Haman soap. On the cake it is stamped 'A Tata Product'. Is it open to a rival trader to call his soap. 'Tata Soap' simply because Tatas do not make 'Tata Soap' as such by name The fundamental question is whether there is a likelihood of deception of the public by the use of a particular name. If there is likelihood the complainant can bring an action against the deceiver, the maker of the representation. As Lord Parker said that the case of action is complete with the representation. It is no longer true that the cause of action is complete only upon sale. It was true to say this in 1896 when Lord Halsbury decided the leading case of Reddaway v. Banham. It is true after 1915 when the leading cases of Parker-Knoll and Warnink were decided. The roots of passing off tort lay in deceit, yet the fraud was practiced not upon the plaintiff but upon the customers of the defendant who purchased the goods believing them to be of the plaintiff's manufacture.

(56) If there is a real prospect of injury to the plaintiff's goodwill he is entitled to injunction. Applying this principle it seems to me that 'B.K.' is the most valuable single asset of the plaintiffs. Prima facie they possess a substantial reputation in this. The adoption of 'B.K.-81' by the defendants would lead persons to think that 'B.K.-81' is the product of a business associate or an affiliate of B.K. Engineering Co. There is a real risk that a substantial number of members among the public would in fact believe that there is a business connection between the plaintiffs and the defendants. The defendants cannot be allowed to cash in on the popularity of the plaintiffs' product in which they have built up a goodwill. If not prevented they will harm the plaintiffs' business. In my opinion there is sufficient material to support a claim for temporary injunction at this stage.

(57) In the end I return to the statement of the law quoted at the beginning of this judgment. Competition must remain free. it is true. This is the life blood of free enterprise system. Yet it is essential that 'trading must not only be honest but must not even unintentionally be unfair' If it is shown that a product or a business of a trade has acquired a distinctive character the law will restrain a competitor from using that others name. A line must be drawn somewhere between honest and dishonest trading, between fair and unfair competition. In this case there can be no quarrel with '81'. The real mischief is in the adoption of the name 'B.K' which is associated with the plaintiffs' business, if not goods.

(58) For these reasons I would allow the appeal and issue an injunction against the defendants, U.B.H.T. Enterprises, restraining them, their servants, agents, representatives and dealers from manufacturing, selling or offering for sale or otherwise dealing in cycle bells under the mark 'B.K.-31' or 'B.K.' or any other mark which may be identical or deceptively similar to the house mark 'B.K.' of the plaintiffs till the decision of the suit. Costs will abide the event.

(59) I would, however, add that nothing said here will prejudice the parties' case at the trial.


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