1. This suit was filed originally in the Court of the Subordinate Judge of Cawnpore. By consent it was transferred to this Court, partly on the ground of expedition but mainly because the case was stated to be one of great general importance to the manufacturing community. The plaintiffs, Swadeshi Mills Co., Ltd., are manufacturers of various kinds of cotton goods and the undertaking is managed by the well-known firm of Messrs. Tata & Co. The original defendant was a firm known as Messrs. Juggi Lal Kamlapat. After the suit was filed, it was discovered that the business had been incorporated as a private company and, therefore, the company was added as the second defendant.
2. The plaintiffs’ case, as disclosed in the plaint and put forward by counsel when the issues were framed, was that they had been, since 1888, manufacturing cotton goods of various kinds and used from the very first a lotus flower as their characteristic trade-mark. It was stated that since 1909 their principal trade-marks had taken three shapes. One is a coloured label bearing a lotus flower and some lotus buds emerging from water as shown by the topmost figure on the left hand of the photograph marked as Exhibit 3, dated the 19th of May 1926; Ex. E is the actual label and shows a dark red and pink flower. It is the one almost invariably used, but at times on a very small portion of their goods the plaintiffs use a plain blue lotus flower (Ex. J). Ex. E is, not unlike the natural flower. The blue lotus is fanciful.
3. The second is an oval impression stamped by mechanical means on cloths and individual garments, bearing the same flower and buds as the coloured label, with a letterpress indicating the name of the plaintiffs. Exs. No. 3 and No. 3A are the impressions made on the goods. Below the oval is an enclosed space within which the word ‘kamalchap’ appears in Gujrati language. The third is shown in the middle photograph on the left hand side of the same photographic Exhibit 3 and has been described, throughout the evidence as a trefoil Ex. F is the impression as it appears on cloth. The letterpress contains the name of the plaintiffs and an inscription to the effect that the mill is a manufacturer of Indian goods and is Indian in its every feature. The plaintiffs used these marks singly or in combination to indicate goods manufactured by them. The coloured lotus flower (Ex. E) was used either by itself or in conjunction with the trefoil (Ex. F). Other cloths bore the oval impression No. 3 together with the pediment of ‘kamalehap’ and the ‘trefoil’ below it.
4. The plaintiffs alleged that by thus using those impressions and labels for a long time they have acquired for their goods the popular name of ‘kamalchap’ (lotus ticket) and that these marks have become known to the trade, and the public as indicative and exclusively so of goods of their manufacture and of their manufacture alone. It has also transpired, in the course of the evidence, that the plaintiffs claimed that their goods were also known as ‘phulchap’ (flower print). The plaintiffs’ goods have a wide sale over a great part of India, but the places with which this action was concerned were principally Cawnpore, Delhi, Calcutta and Amritsar. The defendants, so the plaintiffs alleged, with the object of stealing the trade of the plaintiffs, manufactured cotton goods in their mill and affixed and applied labels and marks similar to those, of the plaintiffs, the intention being to pas off the defendants’ goods as and for the goods of the plaintiffs. The plaintiffs say that they discovered that this was being done by the defendants in July 1924 and called upon them to desist. The defendants, however, refused to do so and the plaintiffs therefore brought the suit. The plaintiffs prayed for an injunction restraining the defendants from using their trade-marks, asked for delivery of the goods of the defendants bearing those marks and for an account. Alternatively, they asked for damages. In the course of the trial the learned Counsel for the plaintiffs gave up the claim for accounts and rested his case as regards pecuniary relief on damages only.
5. The defendants filed separate written statements, but their case was substantially the same. The defendant company, however, pleaded that since their incorporation, they had not used the trefoil and had abandoned also the use of the ‘phulchap’ in Hindi. The defendants denied that the plaintiffs’ marks, stamps, and designs had acquired any reputation of ‘kamalchap’ and urged that even if they had done so, the plaintiffs were not damnified as the defendants’ goods were not enquired for under the designation of ‘kamalchap.’ They further pleaded that the marks and stamps and labels used by them were neither an actual nor a colourable imitation of those used by the plaintiffs and there was no reasonable probability of deception and they alleged that the plaintiffs had no proprietary title to the marks and labels claimed by them and the plaintiffs were not entitled to any relief.
6. The following issues were settled in the presence of the learned Counsel for the parties and with their assistance:
(1) Have the plaintiffs since the year 1888 been using continuously the design of a coloured lotus flower (Exhibit A) emerging from water and since the year 1909 till the date of this action a lotus of the pattern as Exhibit E, on dhotis, chaddars, long cloths and other goods?
(2) Have the plaintiffs been impressing continuously on their said goods the triangular and oval design in conjunction with each other (Exhibits Nos. 3, 3A and F) since at least the year 1909? (Exhibits Nos. 3 and 3A are one and the same, the only difference being in size and clearness of print).
(3) Has the user referred to in Issues Nos. 1 and 2 given to the plaintiffs any exclusive, right to the said design and figure, so as to enable them to restrain any person manufacturing or selling goods with a colourable imitation of the same design attached thereto and figures impressed thereon?
(4) Have the said goods of the plaintiffs so distinguished as aforesaid acquired a reputation in the Indian market? Are the said goods of the plaintiffs known to the trade or to general public under the name of “kamalchap?”
(5) Have the defendants by use of a flower (Exhibit D) and by impressing the oval design (No. 4) and the triangular design (Exhibit G) got up their goods in similarity to those of the plaintiffs and have thereby imitated the same and have passed off their goods as and for the goods of the plaintiffs?
(6) Is the use by the defendant of designs aforesaid such as to induce a belief in the public that the goods of the defendants are those of the plaintiffs?
(7) Has the registration by the defendants referred to in paragraph 20 of the written statement any and what legal validity or effect?
(8) Are the plaintiffs entitled to (1) an in junction; (2) delivery of goods bearing the said designs and figures: and (3) an account, or any and what damages?
7. Findings.-Issue No. 7.-This may be disposed of at the outset, as being the least important point in the case. It appears that the defendant firm “registered” their label (Ex. D) in Calcutta under Registration Act No. 16 of 1908. That Act relates to registration of documents alone and has nothing to do with the registration of trade-marks. We hold, therefore, that the registration had no legal validity or effect. His Lordship, then, after discussing evidence, found Issues Nos. 1, 2 and 4 in the affirmative and held that the plaintiffs’ goods have acquired the trade name of ‘kamalchap’ in the Indian market and among the general purchasing public and proceeded.) The failure to include the words “phulchap” in the plaint was due to an oversight. Had they been included we should have held that the plaintiffs’ goods were also known by that alternative name.
8. Issues Nos. 3, 5 and 6.-These three issues can conveniently be grouped together. The photograph, Exhibit 3, bearing the date 19th of May 1926, is a reproduction of the label and impressions used by the plaintiffs and the defendants respectively, the three impressions on the left being those of the plaintiffs and on the right those of the defendants. In examining them a disparity in the size of the ovals will be noticed. In fact the enlarged oval of the plaintiffs was selected for the photograph because this impression of No. 3 was faint. No. 3 and No. 4 should be compared to show the slight actual difference in size between the ovals of the plaintiffs and defendants. Similarity being a matter for the Court, we decided not to allow any evidence as to the opinion of witnesses on this question: vide Section 45 of the Indian Evidence Act, and Payton and Co., Ltd. v. Snelling Lampard and Co.  A.C. 308.
9. It will be “noticed that the two top pictures are both of a lotus. It has been conceded by Mr. Kamlapat the head of the firm, the Defendant No. 1, and the chirman of the Board of Directors of the Defendant No. 2, and by his son Mr. Padampat, one of the directors of the Defendant No. 2, that their label (Exhibit D) doss represent a kamal (lotus). The similarity between the two pictures at the top lies probably only in this, that both represent a lotus. The two middle pictures, the two trefoils, are no doubt again similar, but with this difference: that the defendants’ picture on the right hand is a little more elongated than the plaintiffs’ picture on the left. At the bottom are the two ovals. The similarity of the appearance is apparent. The difference is this that while the defendants’ oval contains a rose branch with a flower, the plaintiffs’ on the left contains a lotus, and the defendants’ pediment under the oval contains the word ‘phulchap’ in Hindi, while the plaintiffs’ pediment on the left contains the word ‘kamalchap’ in Gujrati character. There is a difference in the letterpress also and there are similar differences in the letter presses of the two sets of pictures above the ovals. Examples of the actual appearance of the cloths with the oval and trefoil of the plaintiffs and defendants respectively are shown by Ex. K. P. 18 and Ex. K. P. 19.
10. Before we consider the question of similarity and the question whether goods of a similar character bearing the defendants’ impressions are likely or not to pass off as goods manufactured by the plaintiffs, it will be worth our while to examine the history behind the defendants’ designs. (Then ‘after considering evidence the judgment proceeded.) In, considering the English authorities we shall have to be extremely careful always to bear in mind that the percentage of illiteracy in this country exceeds 90% of the population and that English, Hindi and Gujrati characters convey nothing to the unlettered. This case comes up for decision at a moment when High hopes are being entertained of the development of India’s great natural resources. For that purpose capital must be unlocked and some guarantee given that a business laboriously built up shall not be subject to invasion at the hands off an unscrupulous rival. As regards letterpress we think that the only present standard that can safely be set up is wholly to disregard differences of name and description in those trades where the article is sold in great quantities to the illiterate rural or urban population. Before we consider the cases, we should clear the ground by pointing out that, although the question was raised in the written statement, as to how far the plaintiffs were entitled to an exclusive right to a trade, mark (vide Issue No. 3) nothing was said in argument to show that the plaintiffs, by continuous user of the representation of a kamal were not entitled to use the same and to stop the defendants from using it in a manner likely to prejudice the plaintiffs. It is not, therefore, necessary for us to cite any authorities in support of the well-known principle that in a country like India, where there is no statute for registering trade-marks, a right to a trade-mark is acquired by user. We take it, therefore, that the plaintiffs have a title to the trade mark of a kamal or lotus and that the only question before us is, whether the defendants are entitled to use their lotus or not. The first case cited by Sir Tej Bahadur Sapru is the case of Blackwell v. Crabb 36 L. J. Ch. 504. The head-note runs as follows:
The Court will not restrain the use of a label on the ground of its general resemblance to the trade-mark of another manufacturer if it is different in points which a customer would look at in order to see whose manufacture he was purchasing.
11. The judgment is very short and was given on an interlocutory application for injunction to restrain the defendant from using the labels. The Vice-Chancellor remarked that the case was to be decided by a mere inspection of two labels. Then he proceeded to state that there were similarities and there were also great differences. It appears that the plaintiffs in the case were the well known manufacturers of pickles and their case was that the defendant had got up a label similar to theirs in order to cut into their trade. Vice-Chancellor Wood proceeded to point out the differences in the two labels and then said:
The defendant’s name is printed on his label at least as large as the plaintiffs is on theirs. The plaintiff’s address is on their label and their is no address on that used by the defendants.
12. As to the Royal Arms used by both the parties, he remarked that the use was common amongst tradesmen. He added:
Thus it is difficult to say where the imitation begins but the important question is what a customer is likely to look at. The name is the thing which a customer would look at and this, is conspicuously different.
13. The case proceeds on the true assumption that everyone wishing to buy the article would by virtue of being able to read at once see “Crabb and Company’ conspicuously printed and would realize instantly that he was being offered a product of a firm other than that of Blackwell.
14. The next case cited was Leather Cloth Company v. American Leather Co. 11 H. L. C. 523. The report of the case shows the two labels of the two contesting parties and a glance at them shows marked dissimilarity. After an examination of the two marks of the parties, one appreciates why their Lordships agreed that the decree of the Court of appeal, dismissing the plaintiffs’ suit should be upheld. Lord Cranworth says at p. 535:
The defendant’s trade mark is certainly not the same as that used by the appellants. But is it only colourably different? I think it is so different as to make it impossible to say that it is substantially the same. No general rule can be laid down as to what is or is not a mere colourable variation. All which can be done is to ascertain in every case as it occurs whether there is such a resemblance as to deceive a purchaser using ordinary caution,
15. His Lordship then went on to describe the points of similarity and the points of dissimilarity and then remarked:
The name of the company is different. The word ‘Crockett’ is prominently exhibited twice in the plaintiffs’ upper hall and once in the defendants. No one taking the trouble to read the two can say that he would he deceived.
16. Again in this judgment we see the emphasis laid upon the accepted fact of ability to read and the protection which literacy affords to the public. As remarked by his Lordship, no general rule can be laid down as to what is or is not a mere colourable variation. In other words the standards differ and education is one of the factors. Quite apart from inability to read, we are satisfied that most of illiterates in this country are so untrained as to eye and brain in the reading and understanding of pictures that they would be quite unable to point out, for example, the differences in the two coloured lotus pictures of the plaintiffs and defendants even if put side by side before them and wholly unable to carry the essential characteristics of either of them in their mind. They would know nothing more than that they wanted a cloth with a red coloured flower gummed or affixed to it. As illustrating the inability which villagers feel to look after themselves in towns and to carry through so simple a transaction as the purchase of a few rupees worth of goods it was proved by Kishan Chand Behan and referred to by other witnesses that a class of men by name Arhatia, exist, who go out to the villages and collect 10, 20 or 50 people who want to make purchases. He conducts these men to the town and takes them to the shops and helps them in their purchases. Bansi Dhar also spoke of villagers coming to his shop accompanied by commission agents or brokers.
17. We were then referred to the Singer Manufacturing Company v. Loog 8 A. C. 15. In this case, it appears, the defendants had got up a sewing machine similar to that known as Singer’s. The defendants were said to have endeavoured to obtain and to have succeeded in obtaining for their machines, some of the reputation attaching to the plaintiffs’ manufacture. The plaintiffs succeeded in their claim, in part. The defendants had sold machines with a brass plate or label attached to them similar to the trade-mark of the plaintiffs. They were restrained from using the plaintiffs’ trade mark and there the litigation ought to have ended. But the plaintiffs objected to the use, by the defendants, of the very name ‘Singer’ in certain advertisements and before the House of Lords, the plaintiffs contended that the defendants should be restrained from using the name Singer, in any way whatsoever. Their Lordships held that the use of the word ‘Singer’ was in no way misleading and dismissed the appeal. It appears that the defendants compared their own machine with the Singer’s in the advertisements and told the public in general that their machine was a better one and they also said that the system they had adopted was the ‘Singer System.’ It was held that no right of the plaintiff had been infringed. Lord Selborne in his judgment said:
The imitation of a man’s trade mark in a manner liable to mislead the unwary cannot be justified by showing either that the device or inscription upon the imitated mark is ambiguous and capable of being understood by different persons in different ways or that a person who carefully or intelligently studied it might not be misled.
18. Sir Tej Bahadur quoted from Lord Blackburn’s judgment to be found at pp. 34 and 35 of the report, where his Lordship remarked that the defendant was not telling people that the machines sold by him were Singer’s machines nor was he using a name similar to Singer’s. The question was relied on to show that as the defendants were not using plaintiffs’ name they were not liable. The comparison is not a good one. As we have pointed out the names stamped on the cloths serve in the vast majority of cases to convey no meaning at all. Even-if the contrary be alleged the defendants in the case before us did use the word ‘phulchap’ which had been used in connexion with the plaintiffs’ production.
19. Boord and Son v. Bagot  2 A. C. 382 was a case strongly relied on by the defendants This case arose out of the respondents’ application to register their trade marks The application was opposed by the appellants. The Comptroller-General who heard the application, allowed it. There was an appeal to a single Judge who dismissed the application. The Court of appeal reversed the judgment of Neville, J., and an appeal was taken to the House of Lords. The applicants were the manufacturers of a liquor and they adopted for their trade mark a cat in boots on snow. The objectors had been using as their trade-mark for the liquor (gin) manufactured by them, a cat on a barrel. The question arose whether the use of the picture of a cat was likely to mislead anybody into purchasing defendants’ liquor for that of the plaintiffs. Lord Buckmaster, L.C., pointed out that for certain reasons gin was popularly known as ‘Old Tom’ and that ‘Tom’ came to be associated with the case and that a cat was generally used as a symbol for gin. His Lordship went on to remark (p. 386) that no one could venture to say that one mark could reasonably be mistaken for the other. If was conceded before their Lordships that it was impossible that any deception was likely to occur in the United Kingdom by the label adopted by the applicants. The question that their Lordships that had to decide was whether the adoption of the label by the applicants was likely to injure the opponent’s trade in the East. His Lordship found that, in their evidence, the witnesses for the appellants drew no distinction between the United Kingdom and other markets. Then his Lordship dealt with the argument that in the East people could not read and they purchased according to the mark the articles bore. In view of the argument he made observations which have been relied upon by the defendants. They are:
The result of this evidence therefore establishes no more than this: that the natives buy according to the words and they look to the mark for the purpose of seeing what it is they buy. If they really look to the mark, deception is impossible, and the only way in which it could arise would be because people would ask for goods as the “cat” or “cat brand” goods and traders knowing that these phrases meant appellants’ goods would deliberately supply goods that were not the appellants simply because the label happened to bear the mark of cat, though it was totally distinct from the cat which forms part of the appellants’ device, etc.
20. Then his Lordship further said:
I see no reason to attribute such conduct to the dealers nor the innocence to the consumers, and if it occurred the wrong done to the appellants would be one for which they would have to seek a remedy in the Courts within whose jurisdiction the offence was committed. There is to my mind no reasonable probability of any such deception arising, nor will the registration of the mark place in the hands of the dishonest traders a ready means, of furthering a course of deceit.
21. The question is how far these observations are applicable to this case. To start with, it was conceded that no deception was possible in England. Then a purely hypothetical case was put before their Lordships. The applicants had not yet sent their goods to the Eastern market for sale, and it was no part of the applicants’ case that the defendants had recently and dishonestly copied their label. Further, Lord Buckmaster indicated that if any deception was practised it would be for the Court within whose jurisdiction the deception was practised to take cognizance of it and it was not for their Lordships to take cognizance of that sort of possible deception. Every case of passing off must be decided on its own circumstances and no decision can be more than a guide as to the general principles to be applied. This case was followed up in the argument, by that of Payton and Co. Ltd. v. Snelling Lampard and Co.  A.C. 308. This case, as the note of the reporter points out, laid down no rule of law beyond this: that it is the function of the Judge to say whether two designs were similar and it was not for a witness to express an opinion on, the point. In this case the manufacturers of coffee sold by them as ‘Royal Coffee’ took exception to the get-up of the defendants’ coffee sold as ‘Mag Coffee’. Their Lordships were agreed there was no similarity between the get-up and disagreed with the suggestion that when Royal Coffee was asked for Flag Coffee would be wrapped up in paper with intention to conceal its identity and fraudulently made over to a customer desirous of purchasing Royal Coffee. When once it is conceded that the get-up is not similar, nothing further need be said on the point. It is true that their Lordships remarked that the defendants could not be held liable for any fraud that might be practised by the retail sellers. But this remark must be taken with the fact that there was no similarity between the two kinds of goods. Lord Macnaughten said:
In the first place the defendants did not, as it-seems to me, pass off, or attempt to pass off, their goods as the goods of the plaintiffs. In the next place it is perfectly clear that no human being has been deceived. The third thing which is perfectly clear is that the plaintiffs’ goods, if they have acquired a title in the market, the only title which they can have acquired is that of ‘Royal Coffee, while as regards, defendants’ goods, if they have acquired or should acquire a title in the market, it is or will be the title of ‘Flag Coffee.’
22. These remarks must be taken with reference to the facts of the case and cannot be detached from the facts to be applied to those of an entirely different case. Here, Mr. Kamlapat and the defendant company are not honest traders. They have deliberately stolen the plaintiffs’ trade marks not one but three They have, as regards the oval and trefoil, intentionally used them in the same sequence. In doing this they have laid on themselves the burden of proving that their practice is not likely to deceive others (see Sebastian’s Law of Trade-marks, 5th edition, p. 140, and the cases referred to therein as authorities).
23. The next case cited on behalf of the defendants was the case of Birmingham Vinegar Brewery Co. Ltd. v. Powell  A. C. 710. In this case the House of Lords affirmed the judgment of the Court of appeal. Their Lordships decided that the plaintiffs’ manufacture known as “Yorkshire Relish” had acquired a reputation, which went to indicate that the article, bearing the name was of plaintiffs’ manufacture and held that under the circumstances it was not open to the defendant to call his manufacture ‘Yorkshire Relish,’ so as to induce purchasers into the belief that it was an article manufactured by the plaintiffs. This case, in fact, supports the plaintiffs, by reason of the circumstance that the plaintiff’s goods have acquired the name of ‘kamalchap’ and therefore the defendants have no right to use a “kamal” as their device or trademark in order to induce people to accept their goods as and for those of the plaintiffs.
24. Sir Tej Bahadur Sapru quoted the case of Johnston v. Orr Ewing 7 A. C. 219 and tried to distinguish it. His first argument was that since this judgment was delivered the trend of authority had gone the other way and the present state of authorities must be inferred from two of the cases previously cited by him [viz., Payton & Co. Ltd. v. Snelling Lampard  A. C. 308 and Boord and Sons v. Bagot  2 A. C. 382]. We are clearly of opinion that such is not the case. We have tried to show that these two cases were decided on their peculiar facts and have no bearing on the present case. On the other hand, the case of Johnston v. Orr Ewing 7 A. C. 219 fully supports the plaintiffs’ case and we have only to substitute the necessary names and descriptions of labels to make the judgment apply fully to the case before us. It appears that the plaintiffs had been selling yarn, dyed Turkish red, in the eastern countries with a device of two elephants with a banner between them. The defendants got up similar goods with a somewhat similar device and put them on the market. It was found that the defendant’s device was in some respect dissimilar to the plaintiffs’ device. The Lord Chancellor (Lord Selborne), however, made the following observations (p. 225):
But although the mere appearance of these two tickets could not lead anyone to mistake one of them for the other, it might easily happen that they might both be taken by the native of Aden or of India unable to read and understand the language as equally symbolical of the plaintiffs’ goods.
25. It is impossible to state the contention of the plaintiffs in more appropriate words. In the case before the House of Lords no deception in fact had been proved, nor has any actual case of deception been proved in the case before us. But his Lordship sought for an explanation, as we ourselves sought in this case, from the defendants as to why the defendants should have adopted the particular device of the plaintiffs. His Lordship says:
Nor am I able to conceive any satisfactory explanation, under all the circumstances of this case, of the adoption by the defendants of that particular device, two elephants at the upper corner of the ticket with a cloth banner suspended between them, knowing as they did the plaintiffs’ ticket, knowing also the character and circumstances of the markets and entering as they did upon this particular branch of trade with the direct object of competing with and underselling the plaintiff unless it was because they had a desire and intention to approach to the plaintiffs’ trade-marks as nearly as they possibly could. In such desire and intention no motive can be suggested except that of getting some part of the benefit of the goodwill and reputation of the plaintiffs.
26. The plaintiffs in this case have been doing a very large trade for a long time. The magnitude of their business will be appreciated by the fact that from January 1900 to December 1922 the value of the goods manufactured by them was over 800 lakhs or about 5½ million pounds sterling. Their annual output is now nearly 80 lakhs of rupees and of this they have been selling goods in Cawnpore alone to the approximate value of 28 lakhs of rupees a year. The defendants started a mill and began to manufacture goods similar, at least in five instances, to those of the plaintiffs and began to mark them with some one or other of the plaintiff’s marks. When the defendant adopted their design they knew that for years the plaintiffs had been selling, in the very market of, Cawnpore, goods with their own particular design and they definitely modelled their marks upon those of the plaintiffs. No possible motive can be assigned for the conduct except an intention to cut into the trade of the plaintiffs and to misappropriate some of it to themselves. The slight dissimilarity in the two lotuses are not, in our opinion, sufficient to give the defendants a right to retain and use it, especially in the view, which we reiterate and emphasize as a principal ground of our decision, that the letterpress, both of the plaintiffs and defendants, are meaningless symbols to all but an insignificant minority of purchasers.
27. In the case of Seixo v. Provezende1 Ch. D. 192 Lord Cranworth said at page 196:
I do not consider the actual physical resemblance of the two marks to be the sole question for consideration. If the goods of a manufacturer, from the mark or device he has used, have become known in the market by a particular name, I think that the adoption by a rival trader of any mark which will cause his goods to bear the same name in the market may be as much an invasion of right of that rival as the actual copy of his device.
28. The case before us exactly fits into the observation of his Lordship. The plaintiffs have acquired a reputation on account of their trade-mark and the defendants have no right to adopt a trademark which can and will be described under the same name as that of the plaintiffs’ goods. Several cases have been quoted on behalf of the plaintiffs to substantiate the proposition that no man has a right to pass off his goods, by adoption of similar devices, as the goods of another. The two cases previously referred to, Johnston v. Orr Ewing 7 A. C. 219 and Seixo v. Provezende 1 Ch. D. 192, are enough to establish the plaintiffs’ right to succeed.
29. We accordingly hold that the defendants have, by the use of devices similar to those of the plaintiffs, tried to pass off their goods as those of the plaintiffs and that the plaintiffs have an exclusive right to their designs and figures and are entitled to restrain the defendants from selling goods with a colourable imitation of the plaintiff’s designs.
30. Issue No. 8.-It has not been controverted that the plaintiffs would be entitled to an injunction in the case of the other issues being decided in their favour. It is equally clear that the plaintiffs are entitled, to the delivery up of all the goods bearing designs and labels and figures similar to those of plaintiffs, in order to have these devices and marks removed. The plaintiffs have given up their claim for an account. They ask for damages alone. The question is: How are the damages to be estimated and what would be the amount of damages to which the plaintiffs are entitled?
31. The last question is not free from difficulty and the authorities on the point are not unanimous. The text-books (Sebastian, 5th edition, pp. 253 and 254; Kerly, 5th edition, p. 530 footnote) indicate that while in England the profits derived from the sale by the defendant of imitated goods have been taken to be the measure of damages to which the plaintiff is entitled, in America the plaintiff has been awarded the profits which he would have realized if he had sold the quantity of goods shown to have been sold by the defendant. We are of opinion that the profits made by the defendant cannot always be a true criterion of damages awardable to a plaintiff. Unless a rival trader commences his career, as did the defendant, by appropriating the trade-marks of other firms, there must always be an initial period during which the goods have to acquire by their own merit, by advertisement and “drive” a footing in the market. Goodwill has also to be built up. Time and money too are lost, through lack of experience, as was undoubtedly the case with the defendants, who at the outset manufactured one class of goods which were to a large extent unsaleable.
32. The plaintiffs proved a very moderate figure of all” round profit which they showed to be just over 9 per cent. Both parties were anxious to avoid an account as it would in the circumstances have been almost impossible to dissect the various classes of goods manufactured by the defendants and to apportion the profits to those bearing the infringing marks. Moreover if the enquiry was to be held on the basis of general all round profit, there would have arisen the question as to whether anything like 27 lakhs had been spent by the defendants on the establishment of the business. That the defendants have succeeded materially in cutting into the plaintiffs’ trade is clear. By consent, all the documents filed by the parties are to be treated as ‘admitted subject to all just exceptions’ and the figures furnished by them are to be treated as correct. The plaintiffs’ figures of sale of goods in Calcutta show a steady increase (Exs. B. D 3 and. B. D 4) till the highest point was reached in 1924. The next year’s sale shows a marked decline, from 58 lakhs to 37 lakhs. The same is the case with the Cawnpore figures Ex. B. D 2. In nine months ending 31st of March 1926, the plaintiffs sold goods worth only 17 lakhs, while the sale during the previous 12 months was 80 lakhs.
33. The particular articles in which the defendants directly competed with the plaintiffs and on which they put one or more of the infringing marks were suti, salita, chaddar, markin and dhotis. The defendants, in the short period of some three years, sold goods so marked to the value of no less than Rs. 32,00,828. We believe that we are acting generously to the defendants in assuming that if these goods had borne the flower pot stamp or the Lachami design they would have sold 40% of the total quantity. We think that this is a figure with which a jury of businessmen might fairly start, and that they might reasonably and properly give to the plaintiffs damages at the rate of 9% upon the remaining balance of 60%.
34. On this basis, taking the round figure of sales at 32 lakhs, the damages come to Rs. 1,72,800. The actual apportionment of the damages is not a matter of practical importance; because the firm was the property of the Hindu family of which Mr. Kamlapat was the head and that the same family hold in the company shares of the value of nearly 26 lakhs out of a capital of 27 lakhs. As the defendants’ accounts do not show how much of the 32 lakhs was received by Mr. Kamlapat and by the Company respectively, we propose to apportion the damages according to the extent of business done by each defendant. These figures over the relevant periods are roughly Rs. 47,00,000 and Rs. 34,00,000 and so, as between the two defendants, the damages may be divided in the proportion of 47 and 34. On that basis the liability of the first defendant would be Rs. 1,00,265 and that of Defendant No. 2 Rs. 72,535. These are no doubt considerable sums of money but damages are in every case proportioned to the injury done and we are satisfied that the defendants respectively made at least the amount of profit in which we are casting them in damages.
35. We therefore grant a perpetual injunction restraining the defendants, their servants and agents from placing upon goods of their manufacture and from selling any cloth or individual garments to which there is affixed or stamped or otherwise applied any label or design which colourably imitates (1). The coloured lotus flower (Ex. E.) (2). The oval (No. 3); (3) The trefoil (Ex. E.) In view of the immense quantity of goods in the possession of the defendants, which bear one or more of the infringing marks and of the practical difficulties attendant upon requiring these goods to be delivered to an officer of this Court, we (with the consent of counsel for the plaintiffs) order the defendants to remove or erase each and all of the said infringing marks from all cloths and individual garments in their possession. This work is to be completed by the 17th of July 1926, on or before which date Mr. Kamlapat and his son Mr. Padampat are to make a joint affidavit stating that this has been done and expressing their willingness to give the plaintiffs or an officer of this Court inspection of their goods at their premises should the plaintiffs so desire. If this is done, an order for delivery of the goods for the purpose of removal and erasure of the offending marks may be avoided. The defendants are to deliver within 14 days to the Registrar of this Court the remaining balance of 2,62,590 coloured lotus flower labels now in their possession. Defendant No. 1 is to pay the plaintiffs Rs. 1,00,265 by way of damages, and Defendant No. 2 is to pay to the plaintiffs the sum of Rs. 72,535 damages. The decree in favour of the plaintiffs, with respect to the amount of damages, will be subject to their making good the deficiency in Court-fee, within 30 days of the office report declaring what amount is due from them. In case of failure to pay the Court-fee, the amount of damages, payable by the two defendants together will be limited to the sum of Rs. 25,000 as claimed in the plaint. This amount will be payable by the Defendant No. 1 and the Defendant No. 2 in the proportion of 47 and 34. The defendants will pay the costs of this action which will include the costs of commissions, and, in this Court, counsel’s fees are to be allowed on the higher scale, and interest is to be calculated on the damages at the rate of 6% as from the 1st January 1926 until payment.
36. This case is to be in the list on the 17th of July next so that if the defendant company have not, within the time limited, carried out the order of the Court as to the removal and erasure of the infringing marks and duly deposed to having done so, a further order may be made in this respect requiring physical delivery of all the said goods to this Court or to a commissioner.