Through: Mr. Sai Krishna Rajagopal, Ms. Shikha Sachdev, Mr. Karan Bajaj and Ms. Julien George, Advs.

Transcription

1 IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : SUIT FOR INJUNCTION Date of decision: 17th October, 2014 CS(OS) 1879/2009, I.As. No.12835/2009 (u/o 39 R-1&2 CPC) & 4196/2013 (u/o 7 R-14 CPC) & Crl.M.A. No.5766/2011 (u/s 340 Cr.P.C.) STAPLES INC & ANR... Plaintiffs Through: Mr. Sai Krishna Rajagopal, Ms. Shikha Sachdev, Mr. Karan Bajaj and Ms. Julien George, Advs. Versus STAPLES PAPER CONVERTERS PVT LTD.. Defendant Through: Mr. Sanjay Jain, Sr. Adv. with Mr. Y.N. Bhardwaj, Ms. Rui Jain, Mr. Sarfaraz Ahmad, Ms. Rajul Jain and Ms. Aastha Jain, Advs. CORAM :- HON BLE MR. JUSTICE RAJIV SAHAI ENDLAW IA No.12835/2009 (of the plaintiffs under Order XXXIX Rules 1&2 CPC) 1. The application of the plaintiffs for interim injunction, in this suit for the reliefs of injunction restraining, infringement of trademark STAPLES and / or the defendant by use thereof passing off its goods and services as that of the plaintiffs, and for ancillary reliefs, is for consideration. 2. The plaintiffs instituted the suit, pleading: (a) that the plaintiff no.1 Staples, Inc. is a company incorporated under the laws of the State of Delaware, USA; (b) that the plaintiff no.2 Staples Future Office Products Pvt. Ltd. is a joint venture of the plaintiff no.1 and Pantaloon Retail (India) Ltd.; the plaintiff no.1 is thus carrying on business in India through the plaintiff no.2; (c) that the plaintiff no.2 is also a licensee of the plaintiff no.1 for the trademark STAPLES ; (d) that the plaintiff no.1 is the worldwide proprietor and owner of the well known and famous trademark STAPLES since the year 1986 and is

2 the largest office products company in the world providing a wide range of office products and supplies such as binders and accessories, boards & easels, breakroom supplies, calendars & planners, computer bags & cases, drafting & school supplies, envelopes, forms & stamps, file folders & accessories, janitorial & cleaning supplies, labels & label makers, mailroom & shipping supplies, paper & pads, pens, writing & correction, post-its, stickers & flags, staplers, punches, trimmers, storage & desk organizers, store supplies & signs, tape, clips & rubber bands etc.; (e) that the plaintiff no.1 conceived and adopted the mark STAPLES in 1986 and as on the date of institution of the suit had sales amounting to US$ 23 billion throughout the world; (f) that the trademark STAPLES enjoys immense popularity worldwide; (g) that the plaintiff no.1 in the year 2008 was ranked 128th in the list of Fortune 500 Companies; (h) that the plaintiff no.1 is the registered proprietor of the trademark STAPLES since the year 2003 in Class 42 (of the Fourth Schedule to The trade Mark Rules, 2002) and has also applied for registration of the trademark STAPLES in Classes 35, 16, 2, 3, 9, 18, 20 & 21; (i) that the plaintiff no.1 is also the registered proprietor of the trademark STAPLES in USA, Argentina, Canada, Germany, Bulgaria commencing from the year 1987 onwards; (j) that the plaintiff no.1 also does extensive business on the internet through the domain name / website ; the plaintiff no.2 also carries on business through its website ; (k) that the defendant is engaged in the business of manufacture and trading of paper since the year 2000 and is trading its goods under the trademark STAPLES which is identical as a whole to the plaintiffs well known and famous trademark; (l) that the defendant vide legal notice dated 14th January, 2008 to the plaintiff no.2 claimed proprietorship over the trademark STAPLES in Class 16 and also claimed to have opposed the trademark application of the plaintiff no.1 in Class 35; (m) that though the plaintiff no.1 replied on 7th March, 2009 to the aforesaid legal notice claiming rights to the said trademark but the defendant instituted a suit in the District Court of Ghaziabad against the plaintiff no.2 alleging infringement and passing off by the plaintiff no.2 of the trademark STAPLES ; (n) that the plaintiffs filed an application before the Intellectual Property Appellate Board (IPAB) for rectification / removal of the registration of the mark STAPLES in the name of the defendant in Class 16;

3 (o) that the adoption by the defendant of the trademark STAPLES is dishonest and mala fide. 3. Summons of the suit and notice of the application for interim relief were issued to the defendant. The defendant has contested the suit, by filing a written statement, on the grounds:- (i) that the defendant has been using the trademark STAPLES in respect of its goods in Class 16, since the year 2000 and was granted registration on 4th December, 2003; thus the defendant is the prior user and proprietor of the trademark STAPLES ; (ii) that the plaintiff no.2 neither has any registration of the trademark STAPLES in its favour nor has any valid assignment from the plaintiff no.1 and thus has no locus standi to maintain the suit; (iii) that the plaintiff no.1 admittedly has no user of the trademark STAPLES in relation to the goods in question in India notwithstanding registration in Class 42 since 22nd October, 2003, which is a service mark registration and does not relate to any tangible goods; (iv) that the plaintiff no.1 had sought registration in Class 42, on proposed to be used basis and confined to retail stores services ; (v) that the plaintiff no.1 cannot claim user in India through the plaintiff no.2 since there is no Registered User Agreement between the plaintiff no.1 and the plaintiff no.2 and the so-called Licence Agreement does not confer any right on the plaintiff no.2 to claim statutory rights of restraining the defendant from infringement; (vi) that the defendant being the registered owner of the trademark STAPLES cannot otherwise also be restrained for infringement; (vii) that the suit thus has to be decided on the parameters of passing off; (viii) that since the plaintiff no.1 has no direct or indirect actual user of the trademark STAPLES in India, it cannot maintain an action for passing off; (ix) that even the plaintiff no.2 cannot maintain an action for passing off since the defendant is the prior user of the mark; the plaintiff no.2 has also not opened any retail store in New Delhi for which the plaintiff no.1 had obtained registration on proposed use basis; (x) that this Court does not have territorial jurisdiction to entertain the suit; (xi) that the plaintiff no.1 has applied for registration of the trademark STAPLES in Class 16, only on 27th August, 2008 when the defendant has registration in the said Class since the year 2003; (xii) denying that the plaintiff no.2 has any interactive or active website in India;

4 (xiii) that the plaintiff is guilty of laches and delay inasmuch as though the defendant had served a notice dated 14th January, 2008 on the plaintiff no.2, the plaintiffs replied thereto only on 7th March, I may record that the defendant had also filed an application under Order VII Rule 11 of the CPC (IA No.15872/2009) but the same was withdrawn on 25th May, 2011 and an application under Section 10 of the CPC which was dismissed as withdrawn on 25th May, The plaintiff no.1 has filed a replication to the written statement but the need to advert thereto at this stage is not felt. 5. Issues were framed in the suit on 24th April, 2012 and a Court Commissioner appointed to record the evidence. However recording of the evidence has not begun as yet owing to the parties having been referred to the Mediation Cell of this Court and which has remained unsuccessful. The counsels for the parties have been heard. 6. The counsel for the plaintiffs has informed / argued:- (a) that the suit filed by the defendant against the plaintiff no.2 in the Courts at Ghaziabad stands dismissed as withdrawn; (b) that the defendant in the said suit had admitted the possibility of confusion / deception owing to the trademark of the defendant and of the plaintiffs being identical and thus the only question for adjudication is whether the plaintiffs or the defendant are the rightful proprietors of the mark; (c) that the plaintiffs, besides on the ground of infringement, have also sued on the ground of passing off; (d) that while the registration of the plaintiff no.1 in Class 42 for retail stores services is dated 22nd October, 2003, the registration in favour of the defendant in Class 16 is dated 4th December, 2003; (e) that the plaintiff no.1 entered into the Indian market through plaintiff no.2 in the year 2007 with a STAPLES Store in Bangalore and at present has seven STAPLES Stores in India; (f) that though defendant has registration in Class 16 but is carrying on business of retailing, falling under Class 42, as is apparent from the bills and purchase orders of the defendant of supply of JK Copier paper; the defendant is not manufacturing and selling paper under the STAPLES brand though is manufacturing pads etc. under the STAPLES brand and which is use in Class 16;

5 (g) that since the defendant does not have a Class 42 registration, the defence of Section 28(3) of the Trade Marks Act, 1999 is not available to the defendant; (h) that even if the plaintiffs are second in entering the market in India, being the first in the world market and which reputation spilled over in India owing to foreign publications containing advertisements of plaintiff no.1 having circulation in India, are the proprietor of the said mark; (i) Reliance is placed on: (I) Milmet Oftho Industries Vs. Allergan Inc. (2004) 12 SCC 624 to contend that the mere fact that the mark has not been used in India would be irrelevant if the plaintiff is the first in the world market; (II) Lowenbrau AG Vs. Jagpin Breweries Ltd. 157 (2009) DLT 791 to contend that the question of prior use cannot be agitated on the basis of use in India alone and that national and manmade boundaries and borders are getting diluted and the world has to be viewed as one common market; (III) N.R. Dongre Vs. Whirlpool Corporation AIR 1995 Delhi 300 (DB) to contend that from prima facie evidence of advertisements in international publications and sale of products bearing the Whirlpool trademark in various geographical regions of the world and inspite of sales in India limited to the US Embassy and the US Aid Office in Delhi, injunction was issued in this case. (j) that the defendant has not given any explanation for adoption of the trademark STAPLES ; the father of the Director of the defendant and under whose guidance defendant has been incorporated is a well known and eminent personality in the paper industry since the year 1979 and is thus deemed to be aware of the trademark STAPLES of the plaintiffs; a list of international publications containing advertisements of the worldwide registrations of the plaintiff was handed over; (k) reliance in this regard is placed on Metropol India (P) Ltd. Vs. Praveen Industries India (Regd.) 1997 PTC (17) (DB), Polson Vs. Polson Dairy Ltd (16) PTC 709 (Del)and on Alfred Dunhill Ltd. Vs. Kartar Singh Makkar MANU/DE/0639/1999; (l) reference is made to the written note of arguments along with copies of the judgments filed; (m) with respect to the pendency of the rectification application before the IPAB and Section 124(1)(b)(i) of the Trade Marks Act, 1999 requiring the suit pending the final disposal of such proceedings, to be stayed, it is contended that the same does not come in the way of the application for interim relief being decided; reliance in this regard is placed on Clinique Laboratories LLC Vs. Gufic Ltd (41) PTC 41 (Del) and it is

6 contended that though the same was reversed by the Division Bench in Gufic Ltd. Vs. Clinique Laboratories LLC 2010 (43) PTC 788 (Del) but not on the said aspect; it is further stated that the view as taken in Clinique Laboratories LLC (supra) was also followed in Rajnish Aggarwal Vs. Anantam 2010 (43) PTC 442 (Del). 7. Per contra, the senior counsel for the defendant has argued: (i) that while the registration dated 4th December, 2003 in favour of the defendant is on the basis of user since the year 2000, the registration in favour of the plaintiff no.1 is on proposed to be used basis and which is indicative of the plaintiff not using the trademark in India at least till the year 2003; (ii) that the plaintiff no.1 has not pleaded any date of coming to India and / or of the use of the trademark in India and therefore cannot restrain the defendant for infringement and can claim injunction only on the principle of passing off; (iii) that as per Section 124(1)(b)(i) of the Act, the suit is liable to be stayed and if the Civil Court cannot proceed with the suit, it cannot decide the interim injunction also; (iv) that though Section 124(5) permits making of interlocutory orders but only where no claim for injunction on the basis of passing off is claimed; if the claim for injunction on the ground of infringement is also accompanied with a claim for injunction on the ground of passing off, the test to be applied for granting injunction has only to be on the principle of passing off and not infringement; (v) that the plaintiff s registration is for service mark and not for any product; (vi) that for injunction on the ground of infringement under Section 29(4) of the Act to be granted, it has to be first established that the trademark is a well known trademark and has a reputation in India; the trademark of the plaintiff is not registered as a well known trademark; (vii) that the plaintiffs have not even pleaded that in the year 2000 when the defendant commenced using the said mark, the plaintiff had trans border reputation; (viii) that the plaintiffs have not disputed use by the defendant of the trademark since the year 2000; (ix) there can be no trans classification reputation; (x) that for Section 29(4) to apply, it is essential to establish reputation in India on the date of commencement of user of the trademark by the defendant;

7 (xi) that the plaintiff no.1 claims to have commenced use of the trademark in India only in the year 2007 and in the short time between 2007 and institution of the suit in the year 2009, could not have acquired any reputation; (xii) that the defendant has been using the mark for nine years i.e. since the year 2000, prior to the institution of the suit in the year 2009; (xiii) that the plaintiff no.1 even while applying for registration in the year 2003 did not claim user in India or reputation in India; the plaintiff had no presence in India prior to 2007; (xiv) there is no plea in the plaint of trans border reputation; (xv) that the plaintiff no.1 by mere grant of licence to the plaintiff no.2 to use the trademark cannot avail of the benefit of Section 48(2) of the Act; (xvi) relief on the basis of passing off can be availed only by plaintiff no.2 and not by plaintiff no.1; (xvii) that even in the cause of action paragraph in the plaint, no plea of trans border reputation has been taken; (xviii) none of the documents filed by the plaintiff no.1 also show any trans border reputation; (xix) the journals containing the advertisements of the plaintiffs are not freely available in India; (xx) in the year 2000, when the defendant commenced / used its trademark, the internet was not so commonly prevalent; (xxi) that even now the plea is only of having STAPLES Stores and not use of the trademark STAPLES qua any product; (xxii) that the plaintiffs, even after knowledge from the notice dated 14th January, 2008 of use and registration of the trademark by the defendant, filed the suit only on 6th October, 2009 and are not entitled to any discretionary relief on the ground of laches; (xxiii) that the balance of convenience is in favour of the defendant who is using the mark since the year 2000; (xxiv) the plaintiffs have not pleaded products qua which the trademark STAPLES is being used; (xxv) that the plaintiffs by not taking any action against the defendant from the year 2000 to 2008 have allowed the business of the defendant to grow and cannot now object; (xxvi) reliance is placed on the judgment of a Single Judge of this Court in Whirlpool Co. Vs. N.R. Dongre 1996 PTC (16) 415 to contend that in that case the trademark Whirlpool had been found to be frequently advertised in international magazines having circulation in India from prior to the

8 commencement of the use of the same trademark by the defendant and which is not the case here. 8. The counsel for the plaintiff in rejoinder has drawn attention / argued, (a) to paras 4,7 and 15 of the plaint to contend that the plaintiffs have pleaded the products qua which they are using the trademark and their advertisements and promotion of trademark in international magazines having circulation in India; (b) that the defendant in the suit filed by it, having admitted possibility of confusion, cannot today be heard to contend that owing to registration in a different class there can be no case for infringement; (c) that the plaintiff no.1 is entitled to injunction even on the principles, enshrined in Section 29(1) of the Act and, of dilution of the trademark; that the use by the defendant of the trademark STAPLES results in dilution of the plaintiffs trademark registered in several countries; and, (d) that the delay of about one year in instituting the suit from the date of knowledge of the mark of the defendant is not such so as to deprive the plaintiff of the interim relief. 9. I have perused the pleadings, documents as well as the written arguments of the plaintiffs on record and considered the rival contentions. 10. The plaintiffs, prior to the institution of this suit, having instituted the proceedings for rectification of the register in relation to the defendant s trademark and which proceedings are still pending before the IPAB and it being the case of the plaintiffs that the registration of the defendant s trademark is invalid, neither counsel controverted that Section 124(1)(b)(i) of the Act is attracted and the proceedings in the present suit are liable to be stayed pending the disposal of such rectification proceedings. The only question for consideration is whether till then, the defendant, by an interim injunction, should be restrained from using the trademark STAPLES of which it has a registration in Class 16 and of the artwork in which it has a registration dated 22nd February, 2008 as a copyright, as the documents filed disclose. I am unable to accept the contention of the senior counsel for the defendant that owing to the plaintiffs having applied for the relief of injunction, besides on the ground of infringement of trademark, also on the ground of passing off, the grant or non-grant of interim injunction is to be tested only on the anvil of passing off and not on the anvil of infringement. The law permits a plaintiff to file a composite suit for the relief of injunction on the basis of infringement as well as passing off. Rather I have in Nippon

9 Soda Co. Ltd. Vs. V.P. Goyal 2014 (58) PTC 386 (Del), following order dated 21st August, 2013 in CS(OS) No.1172/2008 titled Mount Everest Mineral Water Ltd. Vs. Kadir Khan held that if the suit for injunction on the basis of infringement is required to be stayed under Section 124 of the Act, the continuation of the suit on the basis of passing off would lead to splitting up cause of action and duplicity and the suit for injunction on the basis of passing off is thus also required to be stayed. Moreover, Section 124(5) expressly permits the Court to, while so staying the proceedings in the suit for injunction on the ground of infringement, deal with the application for interim relief. The same is the view taken by this Court in Clinique Laboratories LLC and in Rajnish Aggarwal (supra). 11. The trademark of both the plaintiff no.1 and the defendant are identical, so much so that even the manner of writing the same, of both is nearly identical with both writing the alphabets of the word STAPLES in bold, uppercase in Times New Roman font of nearly the same size. However while the registration in favour of the plaintiff no.1 is in Class 42 with the description retail store services included in Class 42, the registration in favour of the defendant is in Class 16 with the goods description of Paper and Paper Articles, Cardboard and Cardboard Articles, Printed Matter, Newspapers and Periodicals, Books, Book Binding Material, Photographs, Stationery and Stationery Materials, Adhesive Materials, Typewriters and Office Requisites, Instructional and Teaching Material, Playing Cards and all type of stationery Items. The question for adjudication at this interim stage is whether owing to the registration being under different classes it can be said that no interim relief is to be granted. 12. The registration in favour of the plaintiff no.1 is not in a class or with respect to any goods but in a class pertaining to services and as described in the certificate of registration in favour of the plaintiff no.1, in relation to retail store services included in Class 42. Class 42, as it existed at the time of registration in favour of the plaintiff no.1, was as under:- providing of food and drink; temporary accommodation; medical, hygienic and beauty care; veterinary and agricultural services, legal services, scientific and industrial research; computer programming; services that cannot be classified in other classes. It has not been argued by the defendant that retail of the products in which the plaintiffs are dealing is provided for in any other class and would thus not fall in Class 42.

10 13. What I understand from the aforesaid is that the plaintiffs have a registration dated 22nd October, 2003 to set up retail stores in the name and style of STAPLES ; however the same does not provide as to what will be retailed / sold therefrom. This is in consonance with the business worldwide of the plaintiff no.1, of operating retail stores in the name and style of STAPLES. However the business worldwide carried on by the plaintiff no.1 in the said retail stores is of the sale of the same goods as provided for in Class 16, in which the defendant holds registration. 14. The counsel for the plaintiffs in written arguments has contended that the plaintiffs, owing to holding registration in Class 42, have exclusive right to retail the said goods and the defendant, even though holding registration in Class 42 with respect to the said goods, are not entitled to retail the same. In my view it would be incongruous and lead to absurd results, to hold that the defendant, named Staples Paper Converters Pvt. Ltd., though would be entitled to manufacture the goods under the trademark STAPLES would not be entitled to retail the same under the name STAPLES or to set up shop in the name of STAPLES and the plaintiffs, though would be entitled to open shop in the name of STAPLES, would not be entitled to sell goods therefrom with the mark STAPLES. 15. Section 28, while describing the rights conferred by registration, in Sub-Section (3) thereof provides that such rights do not extend against another person also registered as proprietor of identical or nearly resembling mark. Similarly, Section 30(2)(e) provides that a registered trademark is not infringed where the use of the registered trademark, being one of two trademarks registered under the Act, which are identical, is in exercise of rights under such registration. The same is the position in the instant case. The two marks, as aforesaid, are identical, both being registered, neither can claim infringement by other. 16. Thus, the grant of interim relief, has to be tested only on the anvil of passing off. 17. The defendant has not disputed / controverted the plaintiff no.1 being first in the world market with the use of the said trademark. However as far as India is concerned, though the registration in favour of the plaintiff no.1 is of about one month and ten days prior to the registration in favour of the defendant, we have to at this stage, in view of the admitted position that

11 while the plaintiff no.1 had sought registration on proposed to be used basis and the defendant had sought registration on the basis of user since the year 2000, proceed on the premise of the defendant commencing user of the trademark at least seven years prior to the plaintiff no The plaintiff has based its claim for interim injunction largely on the law as laid down in Milmet Oftho Industries and in Whirlpool Corporation (supra). The defendant has sought to distinguish Whirlpool Corporation by contending that while the mark Whirlpool was found by the Court to be frequently advertised in international magazines having circulation in India, from prior to the commencement of the use of the mark by the defendant in that case i.e. N.R. Dongre, the same cannot be said of the mark STAPLES of the plaintiff no.1 and it is not borne out from the documents also that the international magazines in which the said mark of the plaintiff no.1 was advertised, were having circulation in India. 19. In Milmet Oftho Industries supra the Supreme Court was concerned with the trademark "OCUFLOX" in respect of an eye care product and which was found to being used by Allergan Inc. worldwide, though Milmet Oftho Industries was the first to use it in India. A two Judge bench of the Supreme Court, besides on N.R. Dongre Vs. Whirlpool Corporation (1996) 5 SCC 714, relied also on Cadila Healthcare Limited Vs. Cadila Pharmaceuticals Limited (2001) 5 SCC 73 and held, (i) that nowadays the field of medicine is of an international character; the Court has to keep in mind the possibility that with the passage of time, some conflict may occur between the use of the mark by the Milmet Oftho Industries in India and the user thereof by Allergan Inc. overseas; that the Court must ensure that public interest is in no way imperiled; (ii) that nowadays goods are widely advertised in newspapers, periodicals, magazines and other media which is available in the country and which results in a product acquiring a worldwide reputation; (iii) that if a mark in respect of a drug is associated with Allergan Inc. worldwide, it would lead to an anomalous situation if an identical mark in respect of a similar drug is allowed to be used in India; (iv) however multinational corporations, which have no intention of coming to India or introducing their product in India should not be allowed to throttle an Indian Company by not permitting it to sell a product in India, if the Indian Company has genuinely adopted the mark and developed the product and is first in the market; (v) that the ultimate test should be who is first in the market; and, (vi) that the mere fact that Allergan Inc. had not been using the mark in India would be irrelevant if they were first in the world market.

12 20. As far as the distinction sought to be made by the senior counsel for the defendant, of the mark STAPLES not having reputation in India and having not been advertised in any magazines having circulation in India is concerned, though the plaintiffs have filed before this Court a plethora of articles published in international magazines pertaining to the plaintiff no.1 as well as extracts from the internet relating to the products with the trademark STAPLES of the plaintiff no.1 as well as the copies of the trademark registrations of the trademark STAPLES in favour of the plaintiff no.1 in different countries across the world but I do not feel the need to foray into the question of circulation of the said magazines in India, being of the view that though the injunction in Whirlpool Corporation (supra) may have been on the said premise but the injunction in Milmet Oftho Industries was de hors the same and merely on the test of who is first in the world market. Unlike the plaintiffs here, who at least before institution of the suit had commenced business under the said trademark in India and which had led the defendant to institute the suit in Ghaziabad Court, Allergan Inc. which was the plaintiff in Milmet Oftho Industries supra, as it transpires from the judgment, had till then not even commenced any business in India under the said trademark. The injunction was granted merely on the principle of the international boundaries disappearing and the world shrinking and the anomaly likely to arise from use of the same trademark relating to the same product by different persons domestically and internationally. Applying the said principles, the plaintiffs are also entitled to the relief of interim injunction. 21. In my view, there is no such delay in institution of the suit which would disentitle the plaintiffs to the relief. The documents filed disclose correspondence between the counsels for the parties between 14th January, 2008 and 7th March, 2009 and there is nothing to show acquiescence on the part of the plaintiffs. 22. Having found prima facie case in favour of the plaintiffs, I proceed to consider the ingredients of balance of convenience and irreparable injury, particularly in the context of the defendant having been in business since the year 2000 i.e. for nearly nine years prior to the institution of the present suit. The factum, of nearly five years having now elapsed since the institution of the suit, would have no relevance as held by this Court in Fedders North AmericanVs. Show Line (2006) 32 PTC 573.

13 23. The defendant has filed copies of its balance sheets from the year till the year ending 31st March, 2011 before this Court. As per the said balance sheets, the sales of the defendant have risen from Rs.38,07,420/- in the year to Rs.10,11,83,551/- (inclusive of other income) in the year The copies of bills / cash memos / invoices filed by the defendant show the defendant to, besides in the business of manufacture and sale of goods under the trademark STAPLES, being also engaged in the business of sale of JK Copier Paper and which perhaps explains the column of commission received in the Balance Sheet for the year and the other income in the Balance Sheet for the year However the defendant has not explained as to, of the total income in the year of Rs.10,11,83,551/-, how much is from the sale of goods under the trademark STAPLES and how much is from the commission received on sale of JK Copier paper. To gauge as to how much of the said sales value of the defendant is from sale of JK Copier Paper and which sale does not entail use of the subject trademark STAPLES except for the invoice thereof being in the name of the defendant and how much from the sale of goods under the trademark STAPLES and of which samples in the form of Writing Pads and Long Exercise and King Size Book have been filed before this Court, I proceeded to see the expenditure column in the balance sheet for the year The same shows the cost of goods sold i.e. cost of acquisition thereof as Rs.3,98,85,637/- and manufacturing expenses as Rs.3,05,12,845/- with a resultant profit before tax of Rs.72,83,489/- The same in my view is indicative of nearly 1/3rd of the gross income of the defendant for the year being from business other than under the trademark STAPLES (save for being in the name of the defendant which itself contains the word STAPLES ). The explanation, for manufacturing expenses of Rs.3,05,12,845/- which is nearly half of the gross sales other than of JK Copier paper is also perhaps owing to purchase of paper used in the Writing Pads and Exercise Books sold under the trademark STAPLES. All this leads me to the conclusion that the scale of business carried on by the defendant under the trademark STAPLES is not relatively voluminous. 24. A perusal of the sample goods under the trademark STAPLES filed by the defendant reveals another interesting aspect. One of the Exercise Books filed, on the cover thereof shows the picture of the Golden Gate Bridge, San Francisco, United States. The possibility of the defendant, by not showing an Indian picture, showing the picture of an American landmark on the cover of its Notebooks sold under the trademark STAPLES,

14 conveying a connection with the plaintiff no.1, an American Company, and thereby attempting to take advantage of the reputation of the plaintiff no.1, cannot be ruled out. 25. The written statement of the defendant, surprisingly, is bereft of any explanation as to the adoption of the mark STAPLES by the defendant. I have in fact wondered as to what could be the reason for the defendant to adopt the said mark. The word Staple with plural staples is a noun, meaning a piece of thin wire with two short right-angled end pieces which are driven by a stapler through sheets of paper to fasten them together. I have wondered as to why anyone would want a noun as a trademark and which may not enjoy such protection as may be available to coined words and which, really speaking neither describes the proprietors of the business nor the business in the Indian context. In fact an ordinary person is likely to consider the defendant as dealing only in staples, instead of in paper products as claimed. The only plausible explanation is that the said name and trademark having international recognition, was adopted for the same trade / business with a view to take advantage thereof in the event of the plaintiff no.1 foraying into India. 26. There is nothing on record to show that the business of the defendant is dependent upon the use of the mark STAPLES. Per contra, the injury to the plaintiff no.1, which has long used the said trademark internationally and has now also commenced operations in India, is obvious. 27. I am, in reaching the conclusion that the plaintiffs are entitled to interim injunction also guided by the consideration that today India is putting full thrust to developing its economy and to transition from a developing to a developed nation status. The present as well as the previous government have in this regard been making attempts to invite multinational and other foreign corporations to invest in the country. In fact recently a campaign of Make in India has been lodged internationally with the Prime Minister himself meeting CEOs of large multinational corporations and inviting them to set up manufacturing / service base in this country. Multinational companies as the plaintiff no.1 would be reluctant to invest in India if it were at the cost of losing protection of the trademark established by them over the past several decades. The Courts in my view, in the exercise of discretion and in the application of the principle of public interest which has become the fourth ingredient in the matter of grant of interim injunction, have to act in tandem and not at loggerheads with the prevalent

15 Government policies, else, the three organs of the State working in different directions would lead to a chaos. 28. Before parting, I may also notice that the Supreme Court in Whirlpool Corporation, while considering the ingredient of balance of convenience held that injunction is a relief in equity, based on equitable principles and equity required that an injunction be granted in favour of Whirlpool Corporation as refusal of injunction would cause irreparable injury to the reputation of Whirlpool Corporation while grant of injunction would cause no significant injury to N.R. Dongre who could sell his washing machines merely by removing the small metallic strip bearing the offensive trademark / name. The same applies squarely to the defendant as well. 29. Accordingly, the application is allowed. The defendant, till the disposal of the suit, is restrained from using the trademark STAPLES and / or from passing off its goods and services as that of the plaintiffs, by desisting from selling, offering for sale, advertising, services or goods of any description bearing the trademark and / or trade name STAPLES or any other mark similar or deceptively similar thereto. However since the defendant has been carrying on business under the said name for nearly fourteen years now and since compliance of this order would also entail the defendant applying to the Registrar of Companies and having its name changed so as to remove the word staples therefrom, I make this order effective w.e.f. 1st December, The application is disposed of. No cost. OCTOBER 17, 2014 Sd/- RAJIV SAHAI ENDLAW, J