The Gujarat HC while entertaining a writ petition in Radhe Krishna Products vs Parshottambhai Dharamshibhai Lunagriya, ruled on certain aspects of the Civil Procedure Code with regard to filing multiple passing off cases with regard to a particular trademark.
The holding of this case is that if a person claims to have rights over the use of a particular mark (in this case the mark ‘Babu’), he is entitled to file separate suits, in different courts, for each mark the defendant uses. So, in this case, the defendant used ‘Bhole Bapa Parcel’ and ‘Babu Parcel’. This entitled the plaintiff to file separate passing off suits in different courts, one challenging the use of ‘Bhole Bapa Parcel’ and another challenging the use of ‘Babu Parcel’. Such a conclusion was reached because it was held that each of these two situations gave rise to a separate cause of action.
Brief facts and background
Petitioner No. 1 (original defendant) is in the business of processing and selling edible lime used in pan masala. Since 2006, they claim to be selling their product under the name ‘Babu Chuna’, ‘Shree Bhole Bapa Parcel’, ‘Babu Parcel’ and ‘New Patel Parcel Chuna’. The respondent (original plaintiff) claims to be the prior user of the mark ‘Babu’ in relation to chuna.
In July 2012, the respondent (original plaintiff) filed a suit for copyright infringement and passing off (hereinafter ‘first suit’) in relation to the defendant’s mark Bhole Bapa Parcel. In September 2012, the petitioners (defendants) filed a suit against the respondent for trademark infringement. During pendency of the first suit, the respondents filed another suit for trademark infringement (hereinafter ‘second suit’) in another court in relation to the defendant’s mark Babu Parcel.
The petitioners then challenged this second suit as not maintainable under Order VII Rule 11(a) and (d). The trial court, however, dismissed this application. It is against this order, the petitioners filed a writ petition before the Gujarat HC seeking to quash the trial court’s order.
Order VII Rule 11(a) and (d), CPC
1. Rule 11(a) (rejection of plaint for non disclosure of cause of action): The court held that while considering an application under the said provisions the court must take into consideration only the averments made in the plaint, read as a whole. At this stage, the court should only examine whether the plaint makes out a cause of action (see T. Arivandandam vs. T.V. Satyapal [(1977) 4 SCC 467], Reptacos Breh and Co. Ltd. vs. Ganesh Property [(1998) 7 SCC 184])
It was argued that the plaint does not make out a cause of action and hence is hit by Rule 11(a). The court rejects this argument because on perusal of the plaint it was found that the respondents (original plaintiff) had clearly stated the cause of action.
2. Rue 11(d) (rejection of plaint where it appears that the plaint is barred by law):
It was argued by the petitioners that the second suit is hit by Rule 11(d) on many grounds such as: (a) it is not maintainable in light of Order 2 Rule 2; (b) it is not maintainable in light of Order 23 Rule 1(4); and (c) is not maintainable because it is a composite suit.
On the contention of the second suit being a composite suit, the court rejected this argument. Composite suits give rise to two causes of action (eg., copyright infringement as well as passing off) and are not maintainable as one suit, as held in of Dabur India Ltd. vs. K.R. Industries [(2008) 10 SCC 595]. However, in this case it was clear that the second suit was only a suit for passing off and not for copyright infringement.
It was also contended that since the plaint in the second suit claims both damages as well as account of profits as relief, it cannot be maintained. Section 135 of the Trademark Act lays down reliefs that are available to a claimant and stipulates that he can either have damages or account of profits and not both. The court held that the claimant cannot have both reliefs but he can mention both in the plaint and exercise the option of choosing between them at a later point (when he is in a position to make an informed decision, as per Island Records v. Tring).
The petitioners then contended that the second suit is hit by Order 2 Rule 2. This provision seeks to discourage multiple suits and tries to eliminate harassment with multiple suits for the same cause of action. The court, however, held that the first and second suit as based on different causes of action. The court explained that Order 2 Rule 2 would apply only in the following situation:
a) If the cause of action in the previous suit and the second suit is same,
b) The similarity of cause of action must be ascertainable from the plaint,
c) If the plaintiff relinquished part of the claim then he cannot resurrect the same claim in another case,
d) In order to claim that the cause of action is the same, the defendant must also establish that it arose out of the same transaction and
e) In case of a continuous cause of action this provision cannot be invoked.
The court explained that a ‘cause of action’ is said to be the same if the two cases are identical in substance and the evidence required to be led is similar or identical. (cited Gurbux Singh vs. Bhooralal [AIR 1964 SC1810], Bengal Waterproof Ltd. vs. Bombay Waterproof Mfg. Co. [AIR 1997 SC 1398])
Since the two suits are filed in respect of two different and distinct trademarks there is no unity or identity in cause of action. The court holds that in the first suit the cause of action is related to the petitioner’s use of the ‘Bhole Bapa’ trademark whereas in the second suit is in relation to the petitioner’s use of the ‘Babu’ trademark. Since there are two different trademarks there is no unity of subject matter and the causes of action are different.
Importantly, the court also held that since the act of passing off gives rise to a continuous cause of action, such actions will not be hit by Order 2 Rule 2 ( Bengal Waterproof Ltd. v. Bombay Waterproof Mfg. Co. 1997 P.T.C. 17).
While the court’s reasoning is backed by precedents, some implications of this judgement are not so clear. In both suits the plaintiff will have to establish that he is the ‘prior user’ of the mark and that he has earned reputation and goodwill in the market. There is clearly an overlap of issues and evidence to prove the same also overlaps. What if there is a conflict of decision in the first and second suit with regard to the plaintiff’s rights over the mark Babu? Instead of having to stay one suit while the question of the plaintiff’s right over the mark is established, isn’t it easier for the same court to assess infringement in case of both the trademarks?
Special thanks to Mr. Shiwprasad Wanve for bringing this case to our notice!