{"id":45400,"date":"2011-04-05T00:00:00","date_gmt":"2011-04-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/kamat-hotels-india-limited-vs-royal-orchid-hotels-limited-and-on-5-april-2011"},"modified":"2019-02-06T16:14:45","modified_gmt":"2019-02-06T10:44:45","slug":"kamat-hotels-india-limited-vs-royal-orchid-hotels-limited-and-on-5-april-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/kamat-hotels-india-limited-vs-royal-orchid-hotels-limited-and-on-5-april-2011","title":{"rendered":"Kamat Hotels (India) Limited vs Royal Orchid Hotels Limited And … on 5 April, 2011"},"content":{"rendered":"
Bombay High Court<\/div>\n
Kamat Hotels (India) Limited vs Royal Orchid Hotels Limited And … on 5 April, 2011<\/div>\n
Bench: Dr. D.Y. Chandrachud<\/div>\n
    PNP                                   1                                    NMS2552.sxw\n\n\n          IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n               ORDINARY ORIGNAL CIVIL JURISDICTION\n\n\n\n\n                                                                                \n                  NOTICE OF MOTION NO.2552 OF 2008\n\n\n\n\n                                                        \n                                 IN\n                        SUIT NO.2224 OF 2008\n\n\n\n\n                                                       \n    Kamat Hotels (India) Limited                        ....Plaintiff.\n          vs.\n    Royal Orchid Hotels Limited and Another             ...Defendants.\n                                      .....\n\n\n\n\n                                             \n    Dr. Virendra Tulzapurkar, Senior Advocate with Mr. Virag Tulzapurkar, \n    Senior Advocate, Mr. Vinod Bhagat, Mr. Punit Jani, Mr. Dhiren Karania, \n                            \n    Mr. Suryank Rao i\/b G.S. Hegde and V.S. Bhagat for the Plaintiff.\n\n    Mr. Venkatesh R. Dhond with Mr. Nikhil Krishnamurthy, Mr. Rashmin \n                           \n    Khandekar, Mr. Sunil Patel i\/b M\/s. Sunil & Co. for Defendant No.1.\n                                     ......\n\n                       CORAM :  DR.D.Y.CHANDRACHUD, J.\n<\/pre>\n
                                5 April 2011.\n<\/p>\n
    ORAL JUDGMENT (PER DR.D.Y. CHANDRACHUD, J.) :\n<\/p>\n
    1.    The suit has been instituted for infringement and passing off.\n<\/p>\n
    The   Plaintiff   carries   on   the   business   of   conducting   hotels   and
\n    restaurants and has a food catering business.   The Plaintiff is the
\n    owner and proprietor of the trade mark “the Orchid”  which is used <\/p>\n
    upon and in relation to a Five Star hotel belonging to the Plaintiff.
\n    The   essential   and   prominent   feature   of   the   mark   is   the   word
\n    “Orchid”.  According to the Plaintiff in or around December 1995, it
\n    conceived and adopted the mark from the name of a flower for use
\n    upon and in relation to its hotel which was then under construction
\n    at Mumbai.   The construction of the first phase of the hotel was <\/p>\n
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\n     PNP                                        2                                    NMS2552.sxw<\/p>\n
    complete in 1996.  Commercial operations commenced in phases from
\n    January   1997.     Hence,   the   Plaintiff   claims   use   of   the   mark <\/p>\n
    continuously   since   January   1997.     The   hotel,   which   is   called   The
\n    Orchid   is   stated   to   be   the   first   Ecotel   hotel   in   Asia.     The   word <\/p>\n
    ‘Ecotel’   is   recognized   as   a   hallmark   of   environmentally   sensitive
\n    hotels.     Authority   to   use   the   mark   Ecotel   is   a   culmination   of   a <\/p>\n
    certification   programme   undertaken   to   enable   industries   in   the
\n    hospitality   area   to   enhance   their   value   through   environmental
\n    initiatives.     The   work   mark   “The   Orchid”   has   according   to   the <\/p>\n
    Plaintiff acquired goodwill and reputation both in the city of Mumbai <\/p>\n
    and elsewhere.  Apart from claiming common law rights in the mark
\n    as a result of continuous use since January 1997, the Plaintiff has also <\/p>\n
    claimed   an   entitlement   as   a   proprietor   of   the   mark   under   the
\n    provisions of the Trade Marks Act 1999.\n<\/p>\n
    2.     Prior to the statutory recognition of service marks in 2003 the <\/p>\n
    Plaintiff,   in   the   manner,   the   Court   is   informed,   that   was   then
\n    prevalent obtained registration of the mark in various classes under <\/p>\n
    the Act.   On 30 May 1997 the Plaintiff obtained registration of the
\n    mark in Class 16 which inter  alia  relates to paper  and stationary.
\n    Registration was obtained also on 30 May 1997 in relation to Class 29 <\/p>\n
    (food items), Class 30 (coffee, tea and sugar), Class 31 (agricultural,
\n    horticultural and forestry products) Class 32 (beer, mineral and aerated
\n    water) and Class 33 (wines and spirits).  After service marks came to
\n    be statutorily recognized, the Plaintiff applied for the registration of
\n    its mark  in Class 42  (hotels,  bar  and  restaurants, catering,  holiday
\n    camp services, hotel reservations, providing of food and drinks and
\n    temporary accommodation).  Registration was granted to the Plaintiff <\/p>\n
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\n     PNP                                    3                                    NMS2552.sxw<\/p>\n
    on 17 September 2007.  The registration relates back to 19 May 2004.\n<\/p>\n
    3.    The case of the Plaintiff that the mark has been utilized since 1
\n    January 1997 is buttressed by a certificate of a Chartered Accountant.\n<\/p>\n
    Revenues for the period from 1 January 1997 to 31 December 1998
\n    were Rs.18.72 Crores.   The revenues rose to Rs.96.27 Crores for the <\/p>\n
    financial year 2007-08.  Publicity expenses for the period  1 January
\n    1997 to 31 December 1998 were Rs.67.05 lacs which increased, during
\n    the   financial   year   2007-08   to   Rs.2.91   Crores.     Invoices   for   the <\/p>\n
    advertisements issued have been relied upon by the Plaintiff.   The <\/p>\n
    Plaintiff   has   placed   reliance   on   certificates   and   awards   which
\n    demonstrate a commitment to quality in the hospitality industry.  An <\/p>\n
    Ecotel certificate was issued to the Plaintiff on 12 May 1997.\n<\/p>\n
    4.    Some time in March 2004 the Plaintiff claims to have learnt <\/p>\n
    that the Defendant had applied for registration of two trade marks, <\/p>\n
    Royal Orchid and Royal Orchid  Hotels in  Class  16,  for  paper  and
\n    paper   articles   and   other   stationary   goods.   In   November   2005,   the <\/p>\n
    Plaintiff   claims   to   have   learnt   of   an   application   by   the   First
\n    Defendant for the registration of these two marks in Class 42. The
\n    First Defendant had submitted an application on 22 June 2004, which <\/p>\n
    was advertised in the Trade marks Journal of 15 June 2005 which
\n    according to the Plaintiff was available to the public on 20 October
\n    2005.  The First Defendant had in its application claimed  use from 3
\n    November 1999.  The application of the First Defendant was rejected
\n    on 29 June 2009.   An appeal has  been filed before  the appellate
\n    authority.\n<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 17:09:48 :::<\/span><\/p>\n
     PNP                                    4                                    NMS2552.sxw<\/p>\n
    5.    On 12 January 2006, the First Defendant issued a red herring
\n    prospectus for a public issue of shares.   The prospectus made the <\/p>\n
    following disclosure in regard to Hotel Royal Orchid :\n<\/p>\n
          “Hotel Royal Orchid<\/p>\n
          This is our flagship hotel owned by us and was set up in 2001
\n          on land leased from the Karnataka State  Tourism Development
\n          Corporation   (“KSTDC”).     Hotel   Royal   Orchid   is   a   premium <\/p>\n
          business hotel targeted   towards the upscale business traveller
\n          and provides all the amenities and comforts which a business
\n          customer requires.   The hotel has been granted a  ‘three-star’
\n          classification   in   February   2003   by   HRACC,   Government   of <\/p>\n
          India.” (emphasis supplied)<\/p>\n
    Similarly, the prospectus contains the following statement in regard to <\/p>\n
    Royal Orchid Harsha :\n<\/p><\/blockquote>\n
          “Royal Orchid Harsha<\/p>\n
          Royal  Orchid Harsha   was  the   first   hospitality   venture  of   Mr. <\/p>\n
          Chander K. Baljee. Royal Orchid Harsha is targeted towards the
\n          economy     business   traveller   and   caters   to   middle   level   and <\/p>\n
          junior level executives.  In  the year 2001, Royal Orchid Harsha
\n          came   into   our   fold   when   the   property   was   leased   to
\n          us.” (emphasis supplied)<\/p>\n
    The unequivocal representation of the First Defendant was that the
\n    hotel was set up in 2001 and it was in 2001 that the hotel came into <\/p>\n
    the fold of the First Defendant when the hotel was leased to it.\n<\/p><\/blockquote>\n
    6.    On 13 January 2006 the Plaintiff published an advertisement on
\n    its   own   behalf   in   response   to   the   IPO   of   the   First   Defendant
\n    recording the contention of the Plaintiff that the use of the mark
\n    Royal Orchid by the First Defendant constitutes passing off in respect <\/p>\n
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\n     PNP                                       5                                    NMS2552.sxw<\/p>\n
    of the Plaintiff’s common law rights in the mark “Orchid”.\n<\/p><\/blockquote>\n
    7.      The   First   Defendant   submitted   a   further   application   for
\n    registration of the mark “Royal Orchid Harsha” which was published <\/p>\n
    in the Trade mark Journal of 1 September 2007.   Use of the mark
\n    was claimed since 10 July 2005.  Similar applications were submitted <\/p>\n
    by the First Defendant for the registration of the mark “Royal Orchid
\n    Central”  (claiming   use from 10 July 2005), for Hotel Royal Orchid
\n    (claiming use from 25 August 2005) and for the marks Royal Orchid <\/p>\n
    Hotels and Royal Orchid Metropole (claiming use from 10 July 2005).\n<\/p>\n
    There was a disclaimer in respect of the use of the word  “Royal”.
\n    In May 2008 an industry publication for the Indian hotel industry <\/p>\n
    contained inter alia information about the First Defendant.  However,
\n    according to the Plaintiff the publication refers to the registered office
\n    of   the   Plaintiff   and   to   its   key   managerial   personnel.\n<\/p>\n
    This   according   to   the   Plaintiff   shows   that   the   mark   of   the   First <\/p>\n
    Defendant   is   deceptively   similar   to   the   mark   of   the   Plaintiff.\n<\/p>\n
    8.      The suit for infringement and for passing off was instituted in
\n    2008.  On the Defendants questioning the jurisdiction of this Court a
\n    preliminary issue under Section 9-A of the Code of Civil Procedure <\/p>\n
    1908 was framed.  This Court held that it has jurisdiction to entertain
\n    and try the suit.\n<\/p>\n
    Submissions\n<\/p>\n
    9.      On behalf of the Plaintiff it has been submitted that –\n<\/p>\n
          (i) The essential feature of the mark belonging to the Plaintiff is
\n            Orchid,   with   a   device   of   a   flower.   The   mark   of   the   First <\/p>\n
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\n     PNP                                        6                                    NMS2552.sxw<\/p>\n
            Defendant consists  of  the  word Orchid  as its central feature
\n            together with the device of the flower.  The mark of the First <\/p>\n
            Defendant is almost identical and a case of infringement has
\n            been made out;\n<\/p>\n
          (ii) The only defence, if any, that the Defendant can have to an
\n            action   for   infringement   must   be   founded   either   on   (1) <\/p>\n
            acquiescence or delay; or in the alternative (2)  a prior use of
\n            the mark.   In  the  present  case,  there  is  no  acquiescence  or
\n            delay   on   the   part   of   the   Plaintiff,   which   has   consistently <\/p>\n
            opposed the use of the mark Orchid by the First Defendant.  As <\/p>\n
            regards   the   defence   of   prior   use,   the   Plaintiff   has   used   the
\n            mark  “Orchid”  since January 1997 and the registration of the <\/p>\n
            mark dates back to May 2004.   The use of the mark by the
\n            First   Defendant   from   3   November   1999   (as   stated   in   the
\n            application for registration in Class 42) can furnish no defence <\/p>\n
            whatsoever   under   Section   34   of   the   Trade   Marks   Act   1999, <\/p>\n
            because that use is after the use by the Plaintiff commenced;\n<\/p>\n
          (iii)The alleged use of the word  “Orchid”  by the First Defendant <\/p>\n
            has no basis or foundation in fact or in law because (a) Under
\n            Section 34 the use must be in respect of goods and services for
\n            which the Plaintiff is registered;   (b) It must be commercially <\/p>\n
            continuous use.  The name of the First Defendant was changed
\n            on 10 April 1997 to Royal Orchid Hotels Limited, but this does
\n            not amount to a commercial use of the mark since the hotel
\n            started functioning only in 2001; (c) In any event, the use of the
\n            mark   Orchid   was   not   by   the   First   Defendant   or   by   its
\n            predecessor-in-title.  In order to avail of the benefit of Section
\n            34, the First Defendant must  establish  how it  has  become  a <\/p>\n
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\n     PNP                                         7                                     NMS2552.sxw<\/p>\n
             successor-in-title in   respect  of  the  mark   and  the  business  in
\n             which it is used. Upon this there is no disclosure whatsoever by <\/p>\n
             the First Defendant.  The First Defendant does not become the
\n             successor-in-interest merely on taking a hotel on lease.   The <\/p>\n
             First Defendant cannot claim to be a successor of Hotel Harsha
\n             which   was   owned   and   run   by   Hotel   Stay   Longer   Private <\/p>\n
             Limited (HSPL); (d) All the sales figures of the First Defendant
\n             are from 2001.  Any use after the commencement of use by the
\n             Plaintiff in 1997  cannot furnish a defence under Section 34; (e) <\/p>\n
             The registration of the Plaintiff  is in  Class  42.   Even  if  the <\/p>\n
             statement of fact of the First Defendant were to be accepted,
\n             naming a room in a hotel by the word “Orchid” for identifying <\/p>\n
             a particular place does not constitute the services of a hotel,
\n             bar and restaurant or a catering service.  In any event, except
\n             for a stray advertisement and an in house pamphlet, there is no <\/p>\n
             evidence of actual use by the First Defendant.  The extent and <\/p>\n
             value of the services has not been stated;\n<\/p>\n
          (iv)There   is   no   acquiescence   on   the   part   of   the   Plaintiff.     The <\/p>\n
             Plaintiff  obtained  knowledge  of  the  use  of   the  mark  by   the
\n             First   Defendant   in   March   2004.     The   Plaintiff   obtained
\n             registration of its mark in October 2007 following which it was <\/p>\n
             entitled in law to institute a suit for infringement.   The suit
\n             was filed in 2008.  The true test is whether it can be inferred
\n             that the Plaintiff has encouraged the First Defendant to use the
\n             mark   and   build   up   investment   in   circumstances   that   would
\n             render its conduct fraudulent.  No such case can be established
\n             by the First Defendant.\n<\/p>\n
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     PNP                                       8                                    NMS2552.sxw<\/p>\n
    10.      On behalf of the First Defendant, it has been submitted that –\n<\/p>\n
          (i) The Plaintiff has come to Court with a carefully structured false <\/p>\n
             case.   The Plaintiff had in  fact  not  lodged  any  objection  in
\n             March 2004 where the First Defendant had sought registration <\/p>\n
             in Class 16. Even after the public issue of the First Defendant in
\n             January 2006 the Plaintiff did not espouse any legal remedies;\n<\/p><\/blockquote>\n
          (ii) The   Managing   Director   of   the   Plaintiff   was   present   in   a
\n             function in March 2006 where an award was presented to the
\n             General Manager of the First Defendant.   The business of the <\/p>\n
             First Defendant together with the use of the mark  “Orchid”\n<\/p><\/blockquote>\n
             was   reported   in   the   print   media   both   within   the   hospitality
\n             industry and outside since June 2001;\n<\/p><\/blockquote>\n
          (iii)The   Plaintiff’s   case   of   the   adoption   of   the   mark   and
\n             commencement of business in January 1997 is doubtful because
\n             the   material   indicates   that   the   business   of   the   hotel   had <\/p>\n
             commenced on 27 September 1997;<\/p><\/blockquote>\n
          (iv)The First Defendant obtained a confirmation of the availability
\n             of the name with  the  word  “Orchid”   from the  Registrar  of <\/p>\n
             Companies on 25 April 1996.  A board resolution was passed on
\n             30 September 1996; Form 23 was lodged on 4 April 1997 and a
\n             fresh   certification   of   incorporation   was   issued   to   the   First <\/p>\n
             Defendant on 10 April 1997.  This would indicate that the First
\n             Defendant had since  April  1996 conceived of  the use  of  the
\n             mark  “Orchid”.  If the case of the Plaintiff on the use of its
\n             mark from January 1997 fails, the use of the mark would be
\n             from September 1997.   In the meantime, in April 1997 there
\n             was a change in the name of the First Defendant to incorporate
\n             the word “Orchid”.  Though prior to 2001, there is no evidence <\/p>\n
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\n     PNP                                     9                                    NMS2552.sxw<\/p>\n
            of   commercial use by the First Defendant of the mark, the
\n            First Defendant was in the process of setting up a hotel.  The <\/p>\n
            First Defendant bonafide adopted the name in April 1997.  The
\n            documentary   material   of   1999   would   indicate   that   the   First <\/p>\n
            Defendant  was corresponding  with  its bankers and  the hotel
\n            eventually commenced in 2001;\n<\/p>\n
          (v) The material on the record would indicate that Hotel Harsha
\n            had an ‘Orchid room’ on 30 December 1990;\n<\/p>\n
          (vi)In sum and substance the contention of the First Defendant is <\/p>\n
            that-   (a)   This is not a case of a dishonest adoption of the <\/p>\n
            mark; (b) The delay on the part of the Plaintiff is one factor
\n            which the Court will take into account; (c) Serious triable issues <\/p>\n
            arise including who had used the mark first; (d) The Plaintiff
\n            has tried to improve upon its case; and (e) The enterprise of
\n            the   First   Defendant   is   well   entrenched   and   the   balance   of <\/p>\n
            convenience must therefore rest with the First Defendant.\n<\/p>\n
    Registration and defence of prior use<\/p>\n
    11.     The Trade Marks Act 1999 incorporates specific provisions for
\n    the   consequence   of   registration.     The   remedy   of   infringement   is
\n    available upon registration.   Under   sub-section  (1) of  Section  27 no <\/p>\n
    person is entitled to institute any proceeding to prevent, or to recover
\n    damages for the infringement of an unregistered trade mark.   Sub-
\n    section (2), however, saves the right of action for passing off of goods
\n    or services and the remedies in respect thereof.  Under sub -section
\n    (1) of Section 28 the registration of a trade mark, if valid, furnishes to
\n    the registered proprietor the exclusive right to the use of the mark
\n    “in   relation   to   the   goods   or   services   in   respect   of   which   the <\/p>\n
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\n     PNP                                     10                                   NMS2552.sxw<\/p>\n
    trade   mark   is   registered”   and   to   obtain   relief   in   respect   of
\n    infringement in the manner provided by the Act.\n<\/p>\n
    12.   Section 34 of the Act provides for the saving of  vested rights <\/p>\n
    in the following terms :\n<\/p>\n
          “34. Saving for vested rights – Nothing in this Act shall entitle
\n          the proprietor or a registered user of registered trade mark to <\/p>\n
          interfere with or   restrain  the  use  by  any  person   of   a  trade
\n          mark identical with or nearly resembling it in relation to goods
\n          or services in relation to which that person or a predecessor in
\n          title of his has continuously used that trade mark from a date <\/p>\n
          prior –\n<\/p><\/blockquote>\n
                 (a)   to   the   use   of   the   first-mentioned   trade   mark   in
\n          relation   to   those   goods   or   services   by   the   proprietor   or   a
\n          predecessor in title of his; or<\/p>\n<\/blockquote>\n
                 (b) to the date of registration of the first-mentioned trade
\n          mark in respect of those goods or services in the name of the
\n          proprietor of a predecessor in title of his,<\/p>\n
          whichever is the earlier, and the Registrar shall not refuse (on
\n          such use being provided) to register the second mentioned trade <\/p>\n
          mark by reason only of the registration of the first-mentioned
\n          trade mark.”\n<\/p><\/blockquote>\n
    13.   Essentially, what Section 34 provides is a defeasance   of the
\n    right of the proprietor or registered user of a registered trade mark, <\/p>\n
    in a certain specific eventuality.   That eventuality is where another
\n    person is using a trade mark identical with or nearly resembling a
\n    registered trade mark in relation to goods or services in relation to
\n    which that person or a predecessor-in-title has continuously used that
\n    trade mark.  Before the protection under Section 34 can be availed of,
\n    the conditions which are spelt out in Section 34 must demonstrably
\n    exist. In order to facilitate analysis, it would be convenient to break <\/p>\n
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\n     PNP                                      11                                   NMS2552.sxw<\/p>\n
    down Section 34 into its component elements :\n<\/p>\n
          (i) Section   34   commences   with   a   non   obstante   provision   which
\n             gives it overriding force over the other provisions of the Act;\n<\/p><\/blockquote>\n
          (ii) The effect of Section 34 is that a proprietor or registered user
\n             of a registered trade mark is disabled from interfering with or <\/p>\n
             restraining the use by any person of  a trade mark identical
\n             with or resembling it;\n<\/p><\/blockquote>\n
          (iii)The use by the other of a trade mark identical with or nearly <\/p>\n
             resembling  the registered  trade  mark   must   be  in  relation   to <\/p>\n
             goods   or   services   in   relation   to   which   that   person   or   a
\n             predecessor-in-title  has continuously used that trade mark;\n<\/p><\/blockquote>\n
          (iv)The use by the other must be from a date prior (a) to the use
\n             of the first mentioned trade mark in relation to those goods or
\n             services by the proprietor or a predecessor-in-title; or (b) to the <\/p>\n
             date of registration of the first mentioned trade mark in respect <\/p>\n
             of those goods or services, in the name of the proprietor or a
\n             predecessor-in- title of his, whichever is earlier.\n<\/p><\/blockquote>\n
    14.      Section 34 carves out an exception and creates an overriding
\n    provision   which   within   the   sphere   of   its   operation   prevents   a <\/p>\n
    proprietor   or   registered   user   of   a   registered   trade   mark   from
\n    interfering with the use of an identical trade mark or a mark which
\n    nearly   resembles   the   registered   mark.     Section   34   in   consequence
\n    provides for a defeasance of the statutory entitlement which flows
\n    from the registration of a trade mark.   Before such a consequence
\n    ensues the conditions which Parliament has enacted must be fulfilled.
\n    The most fundamental requirement is four fold.  Firstly, the use by a <\/p>\n
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\n     PNP                                       12                                    NMS2552.sxw<\/p>\n
    person   of   a   mark   which   is   identical   to   or   nearly   resembles   a
\n    registered trade mark must be in relation to those goods and services <\/p>\n
    for which the first mentioned mark has been registered.   Secondly,
\n    the use that is postulated by Section 34 is a  continuous use  of the <\/p>\n
    trade mark.   Thirdly, in order to avail of the protection the trade
\n    mark   must   be   used   by   the   proprietor   or   by   his   predecessor-in-\n<\/p>\n
    interest.  Fourthly, the mark in respect of which protection is sought
\n    must have been used from a date prior to the use of the registered
\n    trade mark or the date of registration of the registered trade mark <\/p>\n
    whichever is earlier.   Hence, as  an illustration, if the user by the <\/p>\n
    Plaintiff is prior to registration, then the use by the Defendant must
\n    be established to be prior to the use by the Plaintiff.  If the Plaintiff <\/p>\n
    has not used the mark prior to the date of registration, the use by
\n    the   Defendant   has   to   be   prior   to   the   date   of   registration   of   the
\n    Plaintiff’s mark.   The use must be in respect of goods and services <\/p>\n
    for which the Plaintiff’s mark is registered.  The use has to be by the <\/p>\n
    Defendant or by his predecessor-in-title.  The use must be continuous.
\n    The expression  “continuously used that trade mark”  by Parliament <\/p>\n
    has a specific connotation.  The concept of continuous use emphasises
\n    that a right vests in a person when he puts his goods with the mark
\n    in the market.   A use which is continuous is distinct from a use <\/p>\n
    which is stray, isolated or disjointed.  The notion of a continuous use
\n    establishes that a mere adoption of a mark is not sufficient.   The
\n    legislation mandates that in order to avail of the benefit of Section
\n    34   a   test   of   a   high   order   must   be   fulfilled   which   requires   a
\n    commercially   continuous   use   of   the   mark   in   relation   to   goods   or
\n    services.   Section 34 thus provides  for specific requirements which
\n    relate to (i) the nature of the goods or services in relation to which <\/p>\n
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\n     PNP                                       13                                   NMS2552.sxw<\/p>\n
    the mark is used; (ii) the nature and character of use; (iii) the person
\n    who must use; and (iv) the date from which the mark should have <\/p>\n
    been used. Section 2(2)(b) provides that in the Act, unless the context
\n    otherwise   requires,   any   reference   to   the   use   of   a   mark   is   to   be <\/p>\n
    construed   as   a   reference   to   the   use   of   printed   or   other   visual
\n    representation of the mark.  Any reference to the use of a mark in <\/p>\n
    relation to goods shall be construed as a reference to the use of the
\n    mark upon or in any physical or in any other relation whatsoever, to
\n    such goods.  The Supreme Court has interpreted these words in the <\/p>\n
    context of Section 46(1)(b) in Hardie Trading Ltd. v Addisons Paint
\n    and Chemicals Ltd1.\n<\/p>\n
    Analysis of facts\n<\/p>\n
    15.    The distinctive feature of the mark of the Plaintiff is the word
\n    “Orchid”  with the device of a flower.  The first Defendant employs <\/p>\n
    the same word – Orchid – with the device of a flower.  Prima facie, <\/p>\n
    the   mark   of   the   First   Defendant   is   an   infringing   mark.
\n    The test to be applied can best be stated in the lucid exposition of <\/p>\n
    Chagla   C.J.   in  James   Chadwick   &   Bros.     Ltd.   v.   The   National
\n    Sewing Thread Co. Ltd.2,<\/a> speaking for the Division Bench :\n<\/p>\n
           “What is important is to find out what is the distinguishing or
\n           essential feature of the trade mark already registered & what is <\/p>\n
           the main feature or the main idea underlying that trade mark,
\n           &   if   it   is   found   that   the   trade   mark   whose   registration   is
\n           sought contains the same distinguishing or essential feature or
\n           conveys the same idea, then ordinarily the Registrar would be
\n           right if he came to the conclusion that the trade mark should
\n           not be registered.  The real question is as to how a purchaser,
\n           who   must   be   looked   upon   as   an   average   man   of   ordinary <\/p>\n
    1 AIR 2003 SC 3377.\n<\/p><\/blockquote>\n
    2 AIR 1951 BOM 147.\n<\/p>\n
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     PNP                                     14                                   NMS2552.sxw<\/p>\n
          intelligence,   would   re-act   to   a   particular   trade   mark,   what
\n          association he would form by looking at the trade mark, & in
\n          what respect he would connect the trade mark with the goods <\/p>\n
          which he would be purchasing.  It is impossible to accept that
\n          a   man  looking   at   a   trade   mark   would   take   in   every   single <\/p>\n
          feature of the trade mark.  The question would be, what would
\n          he normally retain in his mind after looking at the trade mark?
\n          What would be the salient feature of the trade mark which in
\n          future would lead him to associate the particular goods with <\/p>\n
          that trade mark?”\n<\/p>\n
    16.   The   distinguishing   or   essential   feature   of   the   mark   of   the
\n    Plaintiff is the word Orchid together with the device of the flower.\n<\/p>\n
    That is indeed the same distinguishing feature adopted by the First <\/p>\n
    Defendant.\n<\/p>\n
    17.   Now it is in this background  that   it   would be  necessary  to
\n    evaluate prima facie whether the conditions which have been spelt <\/p>\n
    out in Section 34 are shown to exist, in order to protect the vested
\n    right which the Defendant claims in the use of the mark.  The First <\/p>\n
    Defendant applied for registration of the mark on 22 June 2004.  Both
\n    while applying for registration of the marks Royal Orchid and Royal <\/p>\n
    Orchid Hotels, the First Defendant claimed use of the mark since 3
\n    November 1999.   Hence, the earliest use which the First Defendant
\n    claimed while seeking registration of the mark in Class 42 was from <\/p>\n
    that   date.     Thereafter,   the   First   Defendant   claimed   registration   of
\n    different configurations of the mark in Class 42 in which the first use
\n    was claimed on 10 July 2005 and 25 August 2005.  In the public issue
\n    of   shares   in   January   2006   the   First   Defendant   made   certain
\n    disclosures in its red herring prospectus.   The prospectus contains a
\n    statement that Hotel Royal Orchid was set up by the First Defendant <\/p>\n
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\n     PNP                                       15                                    NMS2552.sxw<\/p>\n
    in 2001 on land leased from the Tourism Corporation of the State of
\n    Karnatak.   Royal Orchid Harsha was disclosed in the prospectus as <\/p>\n
    the first hospitality venture of Chander K. Baljee and was disclosed to
\n    have come into the fold of the First Defendant in 2001 when the <\/p>\n
    property was leased to it.   The projected sales figures for the First
\n    Defendant which have been disclosed on affidavit are for the period <\/p>\n
    from 2001 (reference may be made in this regard to Annexure 8 of
\n    Appendix I to ICICI’s report dated 23 April 1999).\n<\/p>\n
    18.    On behalf of the First Defendant it has been submitted that the <\/p>\n
    original name of the First Defendant which was incorporated on 3
\n    January 1986 was Universal Resorts Limited.   On 25 April 1996 the <\/p>\n
    First   Defendant   obtained   a   confirmation   from   the   Registrar   of
\n    Companies of the availability of the present name, incorporating the
\n    word  “Orchid”.   The Board of Directors passed a resolution on 30 <\/p>\n
    September   1996;   Form   23   was   filed   on   4   April   1997   and   a   fresh <\/p>\n
    certification   of   incorporation   was   issued   on   10   April   1997.\n<\/p>\n
    19.    In  order   to   avail   of   the   benefit   of   Section   34  of   the   Trade
\n    Marks Act 1999 the mere change of name of the First Defendant with
\n    effect from 10 April 1997 will not suffice.  The First Defendant must <\/p>\n
    demonstrate that the mark was utilized in relation to the goods and
\n    services for which the mark of the Plaintiff was registered and that
\n    the use of the First Defendant was prior to the registration, or as the
\n    case may be, the use of the mark by the Plaintiff.   In this regard,
\n    reliance   has   been   sought   to   be   placed   on   behalf   of   the   First
\n    Defendant on certain circumstances in the affidavits in reply to which
\n    it would now be necessary to turn.  The first of those circumstances <\/p>\n
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\n     PNP                                       16                                    NMS2552.sxw<\/p>\n
    is the alleged adoption of the mark “Orchid” in respect of a banquet
\n    room at Hotel Harsha in Bangalore.  In the Bangalore edition of the <\/p>\n
    Times of India of 30 December 1990 there is a publication in respect
\n    of the Orchid room at Harsha Hotel.  The next document is a report <\/p>\n
    dated 23 April 1999 of the Zonal Manager in ICICI prepared in the
\n    context of a new project of the First Defendant.  The report inter alia <\/p>\n
    states that the First   Defendant had been promoted by C.K. Baljee.
\n    Baljee had promoted a company by the name of Baljees Hotels and
\n    Real Estates Private Limited in 1973 and took over a Two Star Hotel, <\/p>\n
    Hotel Harsha in Bangalore on an operational lease from Hotel Stay <\/p>\n
    Longer   Private   Limited   (HSPL).     Baljee   had   since   acquired   the
\n    controlling interest in HSPL which owned   Hotel Harsha.   Counsel <\/p>\n
    appearing on behalf of the First Defendant also purported  to  rely
\n    upon a letter addressed to the Joint Director of Town Planning at
\n    Bangalore on 16 September 1999 and a certificate dated 17 December <\/p>\n
    1999 issued by the Government of India in the Ministry of Commerce <\/p>\n
    and Industry.\n<\/p>\n
    20.    All   these   documents   (save   and   except   for   the   isolated
\n    advertisement  of 1990)  relate  to  the  period  after   the  Plaintiff   had
\n    commenced the use of the mark “Orchid”.  Those documents do not <\/p>\n
    even prima facie establish a use, much less continuous use, prior to
\n    the date on which the Plaintiff had commenced the use of the mark.
\n    Significantly, the First Defendant has not disclosed any sales figures
\n    that   would   establish   a   continuous   course   of   use   of   the   mark
\n    “Orchid” prior to the date on which the Plaintiff commenced the use
\n    of the mark.  There is merit in the contention which has been urged
\n    on   behalf   of   the   Plaintiff   that   the   reference   to   a   room   in   Hotel <\/p>\n
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\n     PNP                                      17                                   NMS2552.sxw<\/p>\n
    Harsha as being the Orchid room is not sufficient to establish within
\n    the meaning of Section 34 a continuous use by the First Defendant of <\/p>\n
    the mark in relation to the goods and services for which the mark
\n    has been registered by the Plaintiff.  But it is important to note that <\/p>\n
    the First Defendant is unable to establish by any cogent documentary
\n    material the existence of such continuous use.   Where a Defendant <\/p>\n
    sets up a defence under Section 34, the consequence of allowing it is
\n    to dilute the protection granted to a proprietor of a registered mark.
\n    The Defendant must be held down to establish the requirements of <\/p>\n
    Section 34 by cogent material which indicates continuous prior use.\n<\/p>\n
    A single swallow does not make a summer.  The Defendants have not
\n    established a crucial requirement of Section 34.\n<\/p>\n
    21.    On   the   other   hand,   the   case   of   the   Plaintiff   is   that   it
\n    commenced   the   use   of   the   mark   in   January   1997.     According   to <\/p>\n
    counsel appearing on behalf of the First Defendant the hotel of the <\/p>\n
    Plaintiff at Mumbai opened to the public on World Tourism day on
\n    27 September  1997, as  is  disclosed  in  the  website  of  the  Plaintiff.\n<\/p>\n
    The Plaintiff has disputed this, contending that as a matter of fact
\n    pre-marketing   activities   had   commenced   in   January   1997.     But,
\n    whether the use of the mark by the Plaintiff commenced in January <\/p>\n
    or in September 1997 is really besides the point because the material
\n    on   the   record   is   sufficient   to   indicate   that   the   First   Defendant
\n    commenced use of the mark much after the Plaintiff.   Even taking
\n    the case of the First Defendant as it stands viz. that the change in its
\n    corporate   name   was   brought   into   effect   from   April   1997,   there   is
\n    absolutely   no   material   to   indicate   even   prima   facie   that   the   First
\n    Defendant had used the mark in relation to the goods and services <\/p>\n
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\n     PNP                                     18                                   NMS2552.sxw<\/p>\n
    for which the mark of the Plaintiff was registered prior to the use by
\n    the Plaintiff.   Counsel   appearing   on   behalf  of  the  First   Defendant <\/p>\n
    adverted to the Hotel and Restaurant Guide of 2002 (a publication of
\n    November 2001), to an article in the India Today of 30 July 2001 and <\/p>\n
    in the Business Times of 8 June 2001.  Evidently all the documentary
\n    material that is produced on behalf of the First Defendant relates to <\/p>\n
    a period much after the commencement of the use of the mark by
\n    the Plaintiff.     By the time that the First Defendant commenced the
\n    use of the mark, the Plaintiff had established a substantial reputation <\/p>\n
    of its own as is evident from its sales and revenue.   The annual <\/p>\n
    revenues of the Plaintiff for the period from 1 January 1997 to 31
\n    March   2008,   as   disclosed   in   the   certificate   of   the   Chartered <\/p>\n
    Accountant dated 3 July 2008 were as follows :\n<\/p>\n
                    Period                               Annual Revenue\n                                                          (in Rs. Crores)\n        \n\n\n    01.01.1997 to 31.12.1998                                    18.72\n     \n\n\n\n    01.01.1999 to 31.03.2000                                   50.94\n    01.04.2000 to 31.03.2001                                    52.28\n    01.04.2001 to 31.03.2002                                   42.92\n\n\n\n\n\n    01.04.2002 to 31.03.2003                                   42.27\n    01.04.2003 to 31.03.2004                                   45.96\n    01.04.2004 to 31.03.2005                                    51.69\n    01.04.2005 to 31.03.2006                                   64.03\n\n\n\n\n\n    01.04.2006 to 31.03.2007                                   79.02\n    01.04.2007 to 31.03.2008                                   96.27\n                    Total                                      544.13\n\n<\/pre>\n
    22.   On   the   other   hand,   the   projected   total   income   of   the   First
\n    Defendant as disclosed in Annexure 8 to the ICICI report dated 23 <\/p>\n
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\n     PNP                                     19                                   NMS2552.sxw<\/p>\n
    April   1999   (which   is   relied   upon   in   the   affidavit   of   the   First
\n    Defendant’s   Company   Secretary   of   2   March   2011)   shows   a   total <\/p>\n
    income of  Rs.19.1 Million  for   2001;   Rs.71.1  Million  for  2002;   Rs.93.9
\n    Million for 2003 and eventually Rs.176.5 Million for 2008.  Prima facie, <\/p>\n
    there   is   therefore   no   cogent   material   to   indicate   that   the   First
\n    Defendant  had a prior  use  so  as  to  substantiate  a  defence  under <\/p>\n
    Section 34.\n<\/p>\n
    23.   The next component of Section 34 is that the use must be by <\/p>\n
    the First Defendant or by a predecessor-in-title.   In this regard the <\/p>\n
    contention   of   the   Plaintiff   is   that   Harsha   Hotel   and   Convention
\n    Center was run by an Indian company  –  Hotel StayLonger Private <\/p>\n
    Limited   (HSPL).     The   First   Defendant,   it   is   urged   has   failed   to
\n    discharge the burden of establishing even prima facie how it become
\n    the successor-in-title of HSPL.  Now as already noted earlier, the red <\/p>\n
    herring prospectus of the First Defendant of January 2006 discloses <\/p>\n
    that Harsha Hotel came into the “fold” of the First Defendant in the
\n    year 2001 when the property was leased to the First Defendant.  This <\/p>\n
    according to the Plaintiff belies the claim which is made by the First
\n    Defendant in an affidavit filed in August 2008  in response  to  the
\n    Motion where it is averred that the First Defendant  “adopted the
\n    mark Orchid room in respect of its banquet hall” in one of its hotels <\/p>\n
    Royal Orchid Harsha (then known as Hotel Harsha) at Bangalore in
\n    January 1992.  The First Defendant claims to have adopted the mark
\n    Orchid in relation to cutlery in 1992 and catering services in 1993.
\n    The submission which was urged by the Plaintiff was that the mere
\n    taking of the hotel on lease did not make the First Defendant an
\n    assignee of the mark, and the ICICI report would indicate that Hotel <\/p>\n
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\n     PNP                                      20                                   NMS2552.sxw<\/p>\n
    Harsha was owned and run by HSPL.\n<\/p>\n
    24.    During   the   course   of   the   hearing   of   the   Motion   and   after
\n    counsel appearing on behalf of the First Defendant had concluded his <\/p>\n
    submissions,   an   affidavit   in   reply   was   filed   of   19   March   2011   of
\n    Chander   K.   Baljee,   the   Managing   Director   of   the   First   Defendant.\n<\/p>\n
    Annexed to the affidavit is a deed of assignment made on 17 March
\n    2011   between   Baljees   Hotels   and   Real   Estates   Private   Limited,   the
\n    First   Defendant   and   HSPL   as   the   confirming   party.     Under   the <\/p>\n
    assignment the mark  “Royal Orchid”  has been assigned to the First <\/p>\n
    Defendant.  The affidavit explains that Baljees Hotels and Real Estates
\n    Private Limited (BHREPL) was incorporated on 16 April 1970.   The <\/p>\n
    share holding was held entirely by the deponent of the affidavit and
\n    his spouse. HSPL is stated to be a wholly owned subsidiary of the
\n    BHREPL.   The First Defendant was incorporated on 3 January 1986 <\/p>\n
    and   was   then   known   as   Universal   Resorts   Limited.     The   original <\/p>\n
    shareholding   was   held   by   the   deponent   and   the   members   of   his
\n    family.   However, following the public issue of 2006, 43.67% of the <\/p>\n
    share   capital   of   the   First   Defendant   is   owned   by   the   deponent;
\n    18.94% by BHREPL and 36.33% by others.  The affidavit states that on
\n    4 January 1973 the erstwhile partnership firm of Baljees executed a <\/p>\n
    lease   with   HSPL   for   taking   over   the   property   where   Hotel   Stay
\n    Longer was situated.  The hotel was renamed as Hotel Harsha.  From
\n    4  January 1973 the partnership firm managed the hotel and was the
\n    owner   of   the   business   and   goodwill.     Subsequently,   the   company
\n    called   Baljees   Hotels   and   Real   Estates   Private   Limited   (BHREPL)
\n    acquired the equity of HSPL and the property of Hotel Harsha is
\n    leased to the First Defendant since 15 September 2005.  The deed of <\/p>\n
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\n     PNP                                      21                                   NMS2552.sxw<\/p>\n
    assignment of the mark  “Royal Orchid”  has been executed on 17
\n    March 2011, it is stated, to obviate  any technical objections.\n<\/p>\n
    25.    Learned Counsel appearing on behalf of the Plaintiff has had <\/p>\n
    serious   objections   to   the   manner   in   which   an   affidavit   has   been
\n    tendered   on   behalf   of   the   First   Defendant   after   pleadings   in   the <\/p>\n
    Motion were complete and arguments of counsel appearing on behalf
\n    of   the   First   Defendant   were   also   concluded.     Learned   Counsel
\n    submitted   that   the   purported   deed   of   assignment   is   a   contrived <\/p>\n
    attempt to set up a defence.  In the interests of justice, I consider it <\/p>\n
    appropriate to allow the affidavit to be taken on record.  As a matter
\n    of   fact,   submissions   have   thereafter   been   heard   on   behalf   of   the <\/p>\n
    Plaintiff in response to the affidavit and an affidavit in reply dated 22
\n    March 2011 has also been filed by the Plaintiff.  In my view, it is not
\n    necessary for this Court at the interlocutory stage to render a finding <\/p>\n
    on  whether  the  First  Defendant   is   in   fact   the  successor-in-title  in <\/p>\n
    respect  of   the  mark   “Royal   Orchid”   as  contended.     Even   on   the
\n    assumption  that  this is   so,   the  Court   has   come  to   the  conclusion <\/p>\n
    prima   facie   that   the   use   of   the   mark   by   the   First   Defendant   is
\n    subsequent to the commencement of use by the Plaintiff.  Hence, that
\n    requirement of Section 34 does not stand fulfilled.  By 2001 when the <\/p>\n
    First Defendant commenced the use of the mark, the revenues of the
\n    Plaintiff for the year 2000-01 were Rs.52.28 Crores.  The Plaintiff had
\n    established a significant amount of goodwill and reputation in the
\n    mark.  Exhibits E-1 to E-26 of the Plaint are the awards secured by
\n    the Plaintiff in the hotel industry. Therefore, on an evaluation of the
\n    material prima facie it is evident that the First Defendant has failed
\n    to establish a defence within the meaning of Section 34.\n<\/p>\n
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     PNP                                      22                                   NMS2552.sxw<\/p>\n
    26.    In Amaravathi Enterprises v. Karaikudi Chettinadu3 a Division <\/p>\n
    Bench of the Madras High Court held that a defendant seeking to set
\n    up a defence of prior use under Section 34 must prove the volume of <\/p>\n
    sales.  The Division Bench held that when a defence of prior user is
\n    taken the burden lies on the trader or manufacturer who raises it to <\/p>\n
    prove the continuous usage of the trade name.  The volume of sales
\n    and promotional expenditure assumes significance.  The reason is that
\n    the   statutory   presumption   under   Section   28     loses   its   significance <\/p>\n
    once   prior   user   under   Section   34   is   established.     Similarly,   in <\/p>\n
    Veerumal Praveen Kumar v. Needle Industries (India) Pvt. Ltd.4  a
\n    Division Bench of the Delhi High Court held that the defendant must <\/p>\n
    establish  that   in  relation   to   particular   goods   there  is   a   course  of
\n    trading and that a goodwill connecting the trader with the goods by
\n    reason of the trade mark under which the goods are marketed has <\/p>\n
    resulted.   Following this line of authority, a Division Bench of the <\/p>\n
    Delhi High Court in  Pioneer Nuts and Bolts Pvt. Ltd. v. Goodwill
\n    Enterprises5  held   that   mere   advertisements   in   a   newspaper   can <\/p>\n
    hardly constitute proof of a use of a mark from that date. Likewise
\n    the grant of a telegraphic address, or soliciting of business, or the
\n    receipt   of   trade   enquiries   do   not   themselves   satisfy   the   legal <\/p>\n
    requirement of the defendant having to show that it used the marks
\n    earlier than the Plaintiff did, in relation to goods for the purpose of
\n    Section 34.\n<\/p>\n
    27.    In      Indo-Pharmaceutical   Works   Private   Limited   v.\n<\/p>\n
    3 2008 (36) PTC 688 (Madras)
\n    4 2001(21) PTC 889 (Delhi).\n<\/p>\n
    5 2009(41) PTC 362 (Delhi).\n<\/p>\n
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     PNP                                      23                                   NMS2552.sxw<\/p>\n
    Pharmaceutical Company of India6, a learned Single Judge of this
\n    Court   held   that   the   evidence   led   by   a   party   seeking   to   establish <\/p>\n
    continuous prior user will be required to be considered in the context
\n    of the nature of the product, the type of sales, the territory within <\/p>\n
    which it is sold and the scale of manufacture of the party.   Once
\n    continuous prior use is established, the person who establishes such <\/p>\n
    use   secures   absolute   protection   and   immunity   whereunder   the
\n    proprietor of a registered trade mark becomes disentitled to restrain
\n    or interfere with the use by a prior user although such subsequent <\/p>\n
    use may be far more extensive than the prior use which such party <\/p>\n
    may have established.   Hence, the learned Single Judge was of the
\n    view   that   there   is   warrant   for   requiring   such   prior   use   to   be <\/p>\n
    established by clear and cogent evidence.\n<\/p>\n
    Acquiescence <\/p>\n
    28.     Acquiescence   is   one   facet   of   delay.     In  Power   Control <\/p>\n
    Appliances v. Sumeet Machines Private Limited7 the Supreme Court<\/a>
\n    held that if the Plaintiff stands by knowingly and lets a defendant <\/p>\n
    build up an important trade until it has become necessary to crush it,
\n    the   Plaintiff   would   be   stopped   by   his   acquiescence.     If   the
\n    acquiescence in the infringement amounts to consent, it would be a <\/p>\n
    complete defence to the action.  However, the acquiescence must be
\n    such as would lead to the inference of a licence sufficient to create a
\n    new   right   in   the   defendant8.  The   principle   which   must   guide   the
\n    grant or refusal of an interlocutory injunction, where the Defendant
\n    either disputes the title of the Plaintiff to the mark or contends that <\/p>\n
    6 1977 BLR 73
\n    7 (1994) 2 SCC 448.\n<\/p>\n
    8 paragraph 26 page 457.\n<\/p>\n
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     PNP                                         24                                   NMS2552.sxw<\/p>\n
    the Plaintiff is not entitled to relief by reason or acquiescence or
\n    delay have been formulated thus by the Supreme Court :\n<\/p>\n
            “Where the defendant disputes the plaintiff’s title to the mark
\n            or contends that the plaintiff is not entitled to relief by reason <\/p>\n
            of   the   acquiescence   or   delay   or   other   estoppel   or   of   the
\n            defendant’s concurrent rights, the Court will be guided by the
\n            balance   of   inconvenience   which   may   arise   from   granting   or
\n            withholding the injunction as well as the justice of the cause <\/p>\n
            after considering all the circumstances in the suit.   In other
\n            words,   where   the   plaintiff’s   title   is   disputed   or   the   fact   of
\n            infringement or misrepresentation amounting to a bar to the
\n            action   or   some   other   defence   is   plausibly   alleged   upon   the <\/p>\n
            interlocutory   motion,   the   Court   in   granting   or   refusing   the
\n            interim   injunction   is   guided   principally   by   the   balance   of <\/p>\n
            convenience that is by the relative amount of damage which
\n            seems   likely   to   result   if   the   injunction   is   granted   and   the
\n            plaintiff ultimately fails or if it is refused  and he ultimately <\/p>\n
            succeeds.\n<\/p><\/blockquote>\n
            ….. It is necessary that an application for interlocutory injunction
\n            should be made immediately after the plaintiff becomes aware <\/p>\n
            of the infringement of the mark.   Improper and unexplained
\n            delay is fatal to an application for interlocutory injunction.  The <\/p>\n
            interim   injunction   will   not   be   granted   if   the   plaintiff   has
\n            delayed   interfering   until   the   defendant   has   built   up   a   large
\n            trade in which he has notoriously used the mark.”\n<\/p><\/blockquote>\n
    29.     The   Supreme   Court   reaffirmed   the   principles   which   were
\n    enunciated in  American Cyanamid Co. v. Ethicon Limited9  by the <\/p>\n
    House of Lords which were as follows :\n<\/p>\n
            “If the defendant is enjoined temporarily from doing something
\n            that he has not done before, the only effect of the interlocutory
\n            injunction   in   the   event   of   his   succeeding   at   the   trial   is   to
\n            postpone the date at which he is able to embark on a course
\n            of action which he has not previously found it necessary to
\n            undertake;   whereas   to   interrupt   him   in   the   conduct   of   an
\n    9 (1975) 1 All ER 504.\n<\/p><\/blockquote>\n
                                                              ::: Downloaded on – 09\/06\/2013 17:09:48 :::<\/span><\/p>\n
     PNP                                      25                                   NMS2552.sxw<\/p>\n
           established enterprise would cause much greater inconvenience
\n           to him since he would have to start again to establish it in the
\n           event of his succeeding at the trial.”\n<\/p><\/blockquote>\n
    30.    The Supreme Court similarly, reaffirmed the principle formulated <\/p>\n
    by Mr. Justice M.N. Venkatachaliah (as the Learned Chief Justice then
\n    was) in Wander Limited v. Antox India Private Limited10. In Wander <\/p>\n
    the   Supreme   Court<\/a>   observed   that   the   interlocutory   remedy   is
\n    intended to preserve in status quo, the rights of parties which may
\n    appear on a prima facie case.   The Court would place in the scale <\/p>\n
    as   a   relevant   consideration   whether   the   Defendant   has   yet   to <\/p>\n
    commence his enterprise or whether he has already been doing so in
\n    which latter case considerations some what different from those that <\/p>\n
    apply   to   a   case   where   the   Defendant   is   yet   to   commence   his
\n    enterprise are attracted.\n<\/p>\n
    31.    In  Bal Pharma Ltd.  v. Centaur  Laboratories  Pvt.  Ltd.11,  Mr. <\/p>\n
    Justice   B.N.   Srikrishna     (as   His   Lordship   then   was)   held   that   “in
\n    order to deny an interlocutory injunction, the delay must be such as <\/p>\n
    to have induced the defendant or at least to have lulled him into a
\n    false sense of security to continue to use the trade mark in the belief
\n    that   he   was   the   monarch   of   all   that   he   surveyed.”     In  D.R.\n<\/p>\n
    Cosmetics Pvt. Ltd. v. J.R. Industries12  the test which was adopted
\n    was that  “the principle which underlies the concept of acquiescence
\n    is that a person who sits by indolently when another is invading his
\n    right cannot be heard to complain when by his acts and conduct he
\n    leads the other to substantially after his position.”      The Court of <\/p>\n
    10 1990 Supp SCC 726.\n<\/p>\n
    11 2002(24) PTC 226.<\/p>\n
\n    12 2008 (38) PTC 28 (Bom.)\n\n\n\n\n                                                           ::: Downloaded on - 09\/06\/2013 17:09:48 :::<\/span>\n     PNP                                       26                                  NMS2552.sxw\n\n\n<\/pre>\n
    Appeal in the U.K. has adopted a broad test in Habib Bank v. Habib
\n    Bank13  of   “whether   in   all   the   circumstances   it   would   be <\/p>\n
    unconscionable to allow the claimant to maintain his claim”.\n<\/p>\n
    32.      Counsel   appearing   on   behalf   of   the   Plaintiff,   while   placing
\n    reliance on a judgment of a Division Bench of this Court in Express <\/p>\n
    Bottlers Services Pvt. Ltd. v. Pepsico Inco.14  submitted that it has
\n    been held that  “it is only in unusual circumstances that the balance
\n    of convenience should play a part in a matter where the Plaintiff is <\/p>\n
    the owner of a registered trade  mark”.   This judgment  has been <\/p>\n
    followed by a learned Single Judge in Poddar Tyres Ltd. v. Bedrock
\n    Sales Corporation Ltd.15   (See<\/a> also the judgment of a Single Judge <\/p>\n
    in  Biochem   Pharmaceutical   Industries   v.   Biochem   Synergy
\n    Limited16.)<\/a><\/p>\n
    33.      The judgments upon which reliance has been placed on behalf <\/p>\n
    of the Plaintiff do not support the contention that considerations of
\n    the balance of convenience are alien to an action for infringement.\n<\/p>\n
    Such a proposition cannot indeed be accepted in view of the law laid
\n    down   by  the  Supreme   Court   in  Power   Control   Appliances.     The
\n    judgment   of   the   Supreme   Court   in  Wander   Limited  has   been <\/p>\n
    reiterated   in  Mahendra   and   Mahendra   Paper   Mills   Limited   v.
\n    Mahindra   and   Mahindra   Limited17.     The   same   principle   was
\n    reiterated by the Supreme Court in  Khoday Distilleries   Limited v.
\n    Scotch Whisky Association18.\n<\/p>\n
    13   (1982) R.P.C. 1
\n    14   (1991-PTC-296)
\n    15   AIR 1993 Bombay 237.\n<\/p>\n
    16   1998 PTC (18).\n<\/p>\n
    17   (2002) 2 SCC 147\/
\n    18   (2008) 10 SCC 723.\n<\/p>\n
                                                           ::: Downloaded on – 09\/06\/2013 17:09:48 :::<\/span><\/p>\n
     PNP                                       27                                   NMS2552.sxw<\/p>\n
    34.    In the present  case,  for   the  reasons  which  have  been  noted <\/p>\n
    earlier, this Court has prima facie arrived at a determination that (i)
\n    The Plaintiff is the registered proprietor of the mark  “Orchid”  in <\/p>\n
    Class 42; (ii) The registration of the mark dates back to 19 May 2004
\n    when the application for registration was made; (iii) The Plaintiff had <\/p>\n
    commenced the use of the mark in January 1997 or at any rate in
\n    September 1997 in relation to the business of its hotel, Hotel Orchid
\n    in Mumbai; (iv) The use of the mark by the First Defendant Orchid <\/p>\n
    infringes     the   mark   of   the   Plaintiff,   coupled   with  the   use   of   the <\/p>\n
    device of a flower; (v) The First Defendant has not shown any cogent
\n    material whatsoever to even prima facie support the case that there <\/p>\n
    was a continuous use by the First Defendant of the mark  “Orchid”
\n    prior to the use by the Plaintiff in relation to the goods and services
\n    for which the mark of the Plaintiff has been registered; and (vi) The <\/p>\n
    defence under Section 34 has not been established.\n<\/p>\n
    35.     The material on the record does not establish that the Plaintiff <\/p>\n
    had acquiesced in the use of the mark by the Defendant.       The
\n    presence of the Managing Director of the Plaintiff at an award even
\n    in March 2006 when an award was conferred on the First Defendant <\/p>\n
    does  not   constitute  acquiescence.     This   pertains   to   2006,   which   is
\n    after the date of knowledge of the Plaintiff of the First Defendant
\n    and its activities as narrated in the plaint.  (Reference may be made
\n    in this context to the affidavit in rejoinder dated 4 September 2008 of
\n    the Plaintiff).  The facts as they have emerged from the record would
\n    indicate that the First Defendant applied for the registration of the
\n    mark “Orchid” in Class 42 on 22 June 2004.  This was advertised in <\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 17:09:48 :::<\/span>
\n     PNP                                       28                                    NMS2552.sxw<\/p>\n
    the trade mark journal on 15 June 2005 which become available on
\n    20 October 2005.  An opposition was lodged by the Plaintiff following <\/p>\n
    which the application of the First Defendant was rejected on 29 June
\n    2009.  An appeal has been filed against that decision.  When the First <\/p>\n
    Defendant   came   out   with   its   public   issue   in   January   2006,   the
\n    Plaintiff had issued a public notice in opposition on 12 January 2006.\n<\/p>\n
    The mark of the Plaintiff was registered in October 2007 at which
\n    point   the   Plaintiff   became   entitled   to   file   a   suit   for   infringement.
\n    The   suit   was   lodged   in   2008.     The   Defendants   questioned   the <\/p>\n
    jurisdiction of this Court to entertain and try the suit. A preliminary <\/p>\n
    issue  in   regard  to   jurisdiction   was     required  to   be  framed  under
\n    Section 9-A of the Code of Civil Procedure 1908  and decided even <\/p>\n
    before the Notice of Motion for interim relief could be heard.   The
\n    preliminary issue was framed by a learned Single Judge on 17 June
\n    2010.   On  1  February  2011  a  Learned  Single  Judge  held  that  this <\/p>\n
    Court  has  jurisdiction  to   entertain   and  try   the   suit.     It   was  only <\/p>\n
    thereafter,  in view of the provisions of Section 9-A, that the Motion
\n    for interim relief could be heard on merits.  No case of acquiescence <\/p>\n
    on the part of the Plaintiff has been established at this stage.   In
\n    Schering   Corporation   v.   Kilitch     (Co.)   Pharma   Private   Ltd.19  a
\n    Division Bench laid down the following principle :\n<\/p>\n
           “Once   it   is   established   that   there   is   visual   and   phonetic <\/p>\n
           similarity,   and   once   it   is   established   that   the   Defendants
\n           adoption of the trade mark is not honest or genuine, then the
\n           consideration of any plea as to delay must be on the basis of a
\n           consideration whether there has been such delay in the matter
\n           as has led the Defendants to assume that the Plaintiffs have
\n           given up their contention and\/or whereby the Defendants have
\n           altered their position so that it would be inequitable to grant
\n           interim relief to stop them from using the trade mark until the
\n    19 1994 IPLR 1<\/p>\n
                                                             ::: Downloaded on – 09\/06\/2013 17:09:48 :::<\/span>
\n     PNP                                       29                                   NMS2552.sxw<\/p>\n
           suit is decided?”<\/p>\n
    Moulding the relief<\/p>\n
    36.    In   deciding   upon   the   nature   of   the   relief   which   is   to   be
\n    granted, the Court is guided by the binding principles which have
\n    been enunciated by the Supreme Court in the judgments in Wander <\/p>\n
    (supra) and in Power Control Appliances (supra).  The Plaintiff has
\n    prima facie established a case of infringement of its mark by the <\/p>\n
    Defendants.     The   Defendants   have   not   prima   facie   established   a <\/p>\n
    defence under Section 34 or on the ground of acquiescence.  Having
\n    said this, a relevant consideration which must weigh in this case is <\/p>\n
    that by the date on which the Plaintiff instituted proceedings in 2008,
\n    the  First  Defendant  had  commenced   business.     In   the   affidavit   in
\n    reply which has been filed by the First Defendant in response to the <\/p>\n
    Motion, in August 2008, it has been stated that the First Defendant <\/p>\n
    was operating, managing or running eleven hotels  in India under the
\n    name   of   Royal   Orchid   with   sales   in   excess   of   Rs.140   Crores.   In
\n    determining   upon   the   grant   of   an   injunction,   the   Court   can   and <\/p>\n
    should   make   a   distinction   between   a   business   which   has   already
\n    commenced and a situation where the Defendant is yet to commence
\n    business.  The judgment in Wander delivered by the Supreme Court <\/p>\n
    does regard this as a relevant consideration.  The First Defendant, it
\n    must also be noted, has  filed  proceedings  for the rectification of
\n    the   mark   of   the   Plaintiff   which   are   pending.     At   this   stage,   the
\n    balance of convenience would require the Court to mould the relief
\n    in such a manner  that while on the one hand the First Defendant is
\n    protected   against   a   damage   which   may   result   to   its   existing <\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 17:09:48 :::<\/span>
\n     PNP                                      30                                   NMS2552.sxw<\/p>\n
    enterprise which has a substantial turnover and reputation, the First
\n    Defendant should at the same time not be permitted to commence <\/p>\n
    any new hotel or line of business with a mark that infringes the
\n    registered mark of the Plaintiff.    As regards the existing hotels and <\/p>\n
    business the First Defendant shall maintain accounts.  Parties will be
\n    at liberty to move the Court again after the application made by the <\/p>\n
    First   Defendant   for   rectification   of   the   mark   of   the   Plaintiff   is
\n    decided.  The present order will ensure, in terms of the judgment of
\n    the   Supreme     Court   in  Wander,   that   the   interlocutory   remedy <\/p>\n
    preserves in status quo the rights of parties which may appear on a
\n    prima facie case.\n<\/p>\n
    37.    The Notice of Motion is accordingly made absolute in terms of
\n    prayer clause (a) with the clarification  that the injunction so granted
\n    shall not operate in respect of the hotels and business which have <\/p>\n
    already commenced prior to the date of this order.  In other words, <\/p>\n
    the   injunction   in   terms   of   prayer   clause   (a)   shall   restrain   the
\n    Defendants   from   making   any   infringement   in   respect   of   any  new <\/p>\n
    hotel or new line of business to be set up hereafter.\n<\/p>\n
                                                    (Dr. D.Y. Chandrachud, J.)<\/p>\n
                                                           ::: Downloaded on – 09\/06\/2013 17:09:48 :::<\/span>\n <\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court Kamat Hotels (India) Limited vs Royal Orchid Hotels Limited And … on 5 April, 2011 Bench: Dr. D.Y. Chandrachud PNP 1 NMS2552.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGNAL CIVIL JURISDICTION NOTICE OF MOTION NO.2552 OF 2008 IN SUIT NO.2224 OF 2008 Kamat Hotels (India) Limited ….Plaintiff. vs. Royal […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-45400","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nKamat Hotels (India) Limited vs Royal Orchid Hotels Limited And ... on 5 April, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/kamat-hotels-india-limited-vs-royal-orchid-hotels-limited-and-on-5-april-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Kamat Hotels (India) Limited vs Royal Orchid Hotels Limited And ... on 5 April, 2011 - 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