The plaintiffs had filed this suit seeking permanent injunction to restrain the defendants from using the trademark “MOTHER DAIRY”, which the plaintiffs had adopted in 1974 and used without break since then. The Federation, which was one of the defendants, had been permitted by the plaintiff vide an agreement to use the mark for the period 1978 to 1996, but only for liquid pasteurized processed milk with territorial restriction of use in West Bengal. However, the plaintiffs alleged that the Federation had violated the terms of the said agreement by allowing the other defendant, viz. Baishnavi Enterprises (a distributor of the Federation) to market its products in Jharkhand using the same mark.
On January 12, 2009, the Delhi High Court had passed an ex-parte injunction preventing the defendants from using the mark or name “MOTHER DAIRY” in respect of pasteurized milk or any other type of milk or milk products in any State other than West Bengal. Meanwhile, the Federation had filed a separate proceeding, being CS (OS) 57/2009, before the Calcutta High Court, wherein a decree had been pleaded for that the territorial restriction placed upon the Federation there had been done so under misrepresentation and mistake. In this case, the defendants contended that their use of the mark “MOTHER DAIRY” was entirely legitimate, since it has a strong descriptive or generic content in relation to milk products, as had even been acknowledged by the court in Mother Dairy Fruits and Vegetables Pvt. Ltd. v. Gujarat Cooperative Milk Marketing Federation [I.A. No. 1329/2005 in CS (OS) 217/2005].
It was also contended by the Federation that the plaintiff, being obviously aware of the use of the mark in West Bengal by the Federation from 1974 onwards, couldn’t possible claim exclusivity regarding the same. Although the original agreement for usage was from 1978 to 1996, the usage in reality was practiced till a new agreement had been made on September, 2004 and the plaintiff had never objected to such usage. Such knowledge and implicit consent by the plaintiff, therefore, argued the defendants, disentitled them to injunction. Also, the plaintiffs’ pre-dominant market was in Delhi and nearby region and did not cover the eastern part of the country, wherein the defendants had used the mark.
Defendants thus urged that it would be just and expedient to stay current proceedings till the matter CS (OS) 57/2009 be decided by the Calcutta High Court. Such stay could be granted under Section 151 of CPC, with precedents existing in the likes of Manohar Lal Chopra v. Rai Bhadur Rao Raja Seth Hiralal (AIR 1962 SC 527), Bhagatram Goel v. Gupta Cables Pvt. Ltd. (AIR 1977 Cal. 451) and Banshidhar Naik & Ors. v. Laxmi Prasad Patnaik (AIR 1966 Or. 53).
Justice Bhat considered the relevant portions of the agreement between the plaintiffs and the Federation dated September, 2004 as well as the letter written by the Federation to the plaintiffs on March, 2005 to reach the following conclusions: The plaintiffs had coined the mark “MOTHER DAIRY” in 1974 and had been using it since then regarding milk and milk products, the mark had been registered, the plaintiffs and the defendants had an arrangement whereby the mark was to be used regarding the Federation’s products in West Bengal between 1978 and 1996. Post that period, there had been no such arrangement till 2004, when the parties had entered into another agreement that the Federation could use the mark for liquid pasteurized and processed milk marketed in West Bengal and that the Federation’s subsidiary would not use the market for sale of such product in West Bengal. Finally, on March 2005, the Federation had let the plaintiffs know that it was formally launching a brand “BENS”, which prompted the plaintiffs to complain that the Federation was violating the territorial restriction agreed to by the parties in the 2004 agreement, by distributing its products through the other defendants outside West Bengal.
The court had appointed a Local Commissioner to visit the defendants’ premises whereby it had been reported that the Federation’s products were indeed being marketed in Jharkhand. Thereafter, the court held that the Federation’s argument about the plaintiffs’ apparent acquiescence being their estoppel from claiming injunction was unfeasible. It had been proven that the plaintiffs had coined the mark in 1974, had been using it ever since and were the proprietors of the registered trademark. The defendants, after all, had not been contending to have applied for rectification or cancellation of the mark.
Moreover, the agreements in 1978 and 2004 amounted to the Federation’s acknowledgement of the plaintiffs’ exclusive rights over the trademark, while the latter agreement also confined the permissive use by the Federation to the State of West Bengal and prevented any Federation’s subsidiary from using the mark in respect of its products. In the light of such development, the court believed that the rule in Ziff-Davis Inc. v. Dr. D.K. Jain and Ors. (1998 PTC 739 Del.) ought to apply in the present case, i.e. the defendants’ use of the mark or the use by the licensee or the permissive user should inure in plaintiffs’ favor.
With regard to the generic argument that milk food is descriptive and the reliance placed upon by the defendants on the order in the Gujarat Cooperative Milk Marketing Federation, Bhat opined that in that matter, the court had in fact acknowledged that if injunction were not granted, the plaintiffs, i.e. Mother Dairy were, as in the present case, bound to suffer irreparable loss to their established business reputation and had even rejected the plea of delay and laches taken by the defendants in that case. Reading together this view expressed by the court in that matter, with the final order therein (by which the defendants had been restrained from manufacturing, selling, offering for sale, advertising and supplying milk and milk products and no sale had been permitted under the trade mark “MOTHER DAIRY”, especially in Delhi), Justice Bhat believed that it would be apparent that the latter part was not in any manner restrictive of the injunction made applicable. Hence in the present matter too, it was held that the plaintiffs being the proprietor of a registered trademark that had not been challenged through any known legal procedure, the defendants cannot contend that the plaintiffs were disentitled to interlocutory protection.
The pleading for stay of proceedings was also rejected by the court. Bhat, J. observed that although the decisions cited by the defendants regarding S. 151 of CPC did enable the Court to stay the proceedings, nonetheless, each case needed to be seen from the subjective facts presented before the Court. In the present case, the defendants undeniably acknowledged the plaintiffs’ rights, as far as back in 1978 and later entered into an agreement in 2004 for use of the mark. With the defendants having violated the territoriality agreed to by the parties in the said 2004 agreement the subsequent suit filed by the defendants was nothing but a mere attempt to stall the present proceeding. The interim injunction granted to the plaintiffs was thus confirmed by the court in its terms and was held to bind the defendants till final disposal of the suit.