Topic: Casio India Co. Limited v/s Ashita Tele Systems Pvt. Limited

Casio India Co. Limited vs Ashita Tele Systems Pvt. Limited
Equivalent citations: 106 (2003) DLT 554, 2003 (70) DRJ 742, 2003 (27) PTC 265 Del, 2003 (3) RAJ 506 - Bench: M Sarin - date of Judgment: 8 September, 2003

JUDGMENT Manmohan Sarin, J.

1. This is an application moved by the plaintiff under Order 39 Rules 1 and 2 CPC, seeking an ad interim injunction against defendant No.1, its Directors, agents, assignees from using the domain name of "www.casioindia.com" or any derivative of the trade mark and trade name of the plaintiff company 'CASIO' or any combination thereof. The restraint is also sought against defendant No.2 ENOM,INC, from permitting use and/or transfer to any third party the domain name "www.casioindia.com" except the plaintiff. M/s. ENOM Corporate is duly accredited by the Internet Corporation for Assigned Names and Numbers as the Registrar for Domain names. Plaintiff also seeks a mandatory injunction directing defendant No.1 to transfer the above domain name to the plaintiff company. Further relief regarding maintenance of accounts is sought.

The application has been moved in the suit for permanent and mandatory injunction and for rendition of accounts. Suit is said to be under Sections 105 and 106 of the Trade and Merchandise Marks Act, 1958.

2. The suit was instituted on 23.7.2002. Summons in the suit and notice in the IA was issued on 31.7.2002. Service was directed by ordinary process and registered AD post and courier service as well. Defendant No.1 was duly served, while summons were also sent by courier to defendant No.2. Written statement and reply to IA has been filed only on behalf of defendant No.1, who entered appearance on 21.10.2002. Plaintiff filed additional affidavit and written submissions. Defendant No.1 has also filed its written submissions and reply to the said affidavit. Full opportunity was provided to plaintiff and defendant No.1 who have argued the matter extensively. The arguments were concluded and judgment reserved on 11.8.2003.

3. The facts, in brief, relevant for the purposes of disposal of the present application may be noted.

(i) Plaintiff is Casio India Ltd. Defendant No.1 is M/s Ashita Tele System Pvt. Ltd, Mumbai. Plaintiff is aggrieved by the registration of domain name "www.casioindia.com" by defendant No.1. Defendant No.2 is the Registrar with whom the domain name has been registered. Annexure A to the plaint gives the details of the domain name registration. The name of the organisation is given as that of defendant No.1. It also mentions the first and the last name as `Avinash Johri'. The address given is 152, Modi Street, Second floor Shahin Apartments, Mumbai. The registration was done on 13.11.1998.

(ii) Plaintiff claims to be a 100% subsidiary of Casio Computer Ltd, Japan (Casio Japan) which is the registered owner of the trade mark 'Casio' in India used for a large number of electronic and other products. Plaintiff, namely, M/s Casio India Co. Ltd. vide an agreement dated 7.11.2000, was made the sole marketing and selling agent of Casio Japan in India. Plaintiff claims to have been given the sole and exclusive right to use the said trade mark in India. Plaintiff claims to have obtained the registration of large number of domain names in India. These are Casio India Company .com, Casio India. organisation, Casio India.net, Casio India.info, Casio India.Biz, Casio India Co.in etc. Casio Japan has similarly registered domain names worldwide casio.co.jp, casio.com etc. Plaintiff avers that the parent company has global reputation for the use of the trade mark 'Casio' all over the world and in particular in Japan and India. It is claimed that the trade mark `CASIO' is being used by the plaintiff for sale and marketing all goods such as watches, calculators, digital diaries and other digital and electronic products. Plaintiff claims to have spent considerable effort and finances towards advertising and developing goodwill for its trade mark and trade name `CASIO'. Plaintiff claims to have spent a sum of Rs.1,60,00,000/- towards advertisement and development of goodwill in India.

(iii) Plaintiff has filed the present suit claiming that the impugned registration of domain name by defendant No.1 is identical and confusingly similar to plaintiff's trade mark 'CASIO'. Defendant No.1 has no right or legitimate interest in respect of plaintiff trade. Defendant No.1 has registered the domain name to gain illegal and unauthorized benefit out of the use of plaintiff's brand name 'CASIO'.

(iv) Plaintiff in the process of continuing his business had entered into distributorship agreement with one M/s Asuka Networking Solution, represented by Mr. Avinash Johri. The agreement term was for one year commencing on 12.4.1999. The agreement was not renewed and expired on 12.4.2000. Plaintiff alleges that it came to its knowledge in the year 2000 that Mr. Avinash Johri through defendant No.1, registered the domain name "www.casioindia.com." in the name of its organization defendant No.1, with the first name and last name of the registrant being given as Avinash Johri. The impugned domain name uses the word "Casio" as a predominant part of the domain name. It is designed to mislead all the internet users, as the domain name is almost identical and confusingly similar to the trade mark of the plaintiff. The defendant has no authorization or right to use the name 'CASIO' in its domain name. The addition of the word "India" in the website has only increased the likelihood of confusion for the internet users in India, who would associate website with the impugned domain name as being that of the plaintiff.

(v)Plaintiff claims that on account of the long usage of the trade mark and trade name by Casio Japan, all over the world and by the plaintiff in India, tremendous goodwill and reputation has been established in the market for its electronic products sold under the brand `Casio'. The word `Casio' as part of the plaintiff's brand trading style has acquired a special connotation, resulting in identification with the plaintiff, its business and the goods sold by it. Plaintiff alone has the exclusive right to use the word "CASIO".

(vi) The defendant has obtained the domain name registration to prevent the plaintiff, who is entitled to use the mark "CASIO" from using the same in its domain name. It is averred that on repeated representations by the plaintiff to defendant No.1 to desist from use of the domain name, the defendant No.1 demanded a sum of Rs.20 lacs for transfer of the domain name. The plaintiff could not accept this demand. Plaintiff finally issued a notice dated 19th January, 2002, to defendant to cease the user of the domain name on the website, but to no avail. Plaintiff claims that violation of its intellectual property by the defendant has impaired its goodwill and reputation. Plaintiff is also suffering damages and losses on account of user of its trade mark and brand name by the defendant. The plaintiff, therefore, claims that it is entitled to restrain defendant No.1 from using the domain name "www.casioindia.com" as the same is being used by the defendant without any right, authorisation and entitlement to derive illegal benefit.

4. Written statement has been filed by the defendant as also the reply to the application. Mr. Shyam Moorjhani, advocate has also filed synopsis of his submissions and he has been heard at length. The defendant opposes the injunction claiming that the plaint itself is liable to be rejected under Order VII Rule 11 CPC, as not disclosing any cause of action and being barred by limitation. Defendant urges that plaintiff is not entitled to injunction on account of delays, laches and acquiescence. Defendant also questions the locus of the plaintiff i.e. Casio India Ltd. to institute the suit claiming that the plaintiff was not the proprietor or owner of the trade name/trade mark Casio. The suit instituted by the plaintiff was without any authority in the absence of any assignment by Casio Japan in favor of the plaintiff. Lastly, it is urged that this Court has no territorial jurisdiction to try and entertain the suit.

5. Having noticed the factual matrix and the case as set up by plaintiff and the pleas of the defendant in opposition, let us examine the entitlement of the plaintiff to the injunction claimed. This can conveniently be done by considering pleas raised by the defendant under the following heads :-

(a) Locus to institute suit and claim injunction.

(b) Territorial jurisdiction to try and entertain the suit.

(c) Prima facie case and balance of convenience.

(d ) Whether plaintiff disentitled to injunction on account of delays, laches and acquiescence.

6. (a) Locus to institute suit and claim injunction.

The defendant questions locus standi of plaintiff to institute the suit. It is submitted that there is nothing on record to show that either the plaintiff is proprietor of the trade mark 'CASIO' or is the registered user thereof, authorised to use it as a trade mark or domain name. Assuming but not admitting, plaintiff to be the 97% or 100% subsidiary of Casio Computor Company Ltd., Japan, it does not follow that the said trade mark is assigned to it or it is authorised to use the same. The mere appointment as the marketing and selling agent of Casio Japan would not ipso facto entitle it to use the trade mark or domain name.

(ii) The objection of defendant raised as to locus standi and authority of the plaintiff to institute the suit is without merit. The Agreement dated 7.11.2000 between Casio Japan and plaintiff records the user of the brand name by the plaintiff since 1996. The agreement specifically records that the plaintiff is and had been authorised to use the brand name 'CASIO' in India since its incorporation. The plaintiff was incorporated in 1996. The agreement further authorised the plaintiff to appoint stockists, distributors, C&F Agents for sales and marketing of 'Casio' brand product. The agreement term was for a period of two years and it was in force at the time of institution of the suit. As per the affidavit dated 20th March, 2003, filed by the plaintiff, the agreement has since been extended. There is no specific assignment or authority required empowering the plaintiff to sue because the said right is a natural consequences to the existence of the plaintiff as a juristic person. under the Companies Act. The impugned domain name on the defendant's website uses the name identical to the corporate name of the plaintiff. Therefore, irrespective of any trade mark right, it has an inherent right under common law to seek a restraint on any other business entity from using its corporate name to do business and that too in the same class of products. The present suit in substance is one of seeking a restraint on passing off a portal/website as that of the plaintiff and its principal. Accordingly, no specific assignment of trade mark or authority is required for instituting the suit. I, therefore, hold that the plaintiff has locus to institute the suit and the objection of the defendant is without merit.

(b) Territorial jurisdiction to try and entertain suit.

(i) The defendant contends that this Court has no territorial jurisdiction to try and entertain the suit. The defendant No.1 carries on its business from Bombay and is resident of Bombay. It is urged that the plaint does not disclose any cause of action arising within the jurisdiction of this Court. There is only a bald averment that access to the website using the domain name can be had from Delhi. Counsel urged that there was not even an averment that the website using the impugned domain name had been accessed from Delhi.

(ii) This objection with regard to the territorial jurisdiction needs to be considered in the overall context of advances and development in the field of information technology and not in the usual conventional manner disclosing arising of a cause of action, arising for an individual transaction, within the territorial limits of jurisdiction of the court.

(iii) The suit relates to an action of passing off in respect of a domain name of a website. The suit is not in respect of any allegation of any clandestine specific sale of tangible products within the territory. The defendant no.1 admits the sale of `CASIO' products through the website. It is also not denied that the website can be accessed from Delhi. For determining the question of jurisdiction, the following decisions and the observations made therein are significant. A learned Single Judge of this Court in Info Edge India Pvt. ltd. Vs. Shailesh Gupta & Anr. 2002 (24) PTC 355 while dealing with the case of domain name `naukri.com' observed "a domain name is more than an internet address and is entitled to the equal protection as that of trade mark. In internet service, a particular internet site could be reached by anyone from anywhere in the world, who proposes to reach the said website. With the advancement and progress in technology, the services rendered in the Internet site have also come to be recognised and accepted and are being given protection so as to protect such provider of service from passing off the services rendered by others as his services."

Similarly, the High Court of Bombay in Rediff Communication Ltd. Vs. Cyber Booth AIR 2000 Bombay 27 recognised the above principles. The High Court of Australia in Dow Jones & Co. Inc. Vs. Gutnic (2002) HCA 56 held that due to ubiquity, universality and utility of the features of the Internet and the World Wide Web (WWW), any matter associated with it, possesses global jurisdiction. From the foregoing judicial pronouncements, it would be seen that once access to the impugned domain name website, could be had from anywhere else, the jurisdiction in such matters cannot be confined to the territorial limits of the residence of the defendant. Further more in a passing off action it is not incumbent upon the plaintiff to prove any actual sale or any particular act of deception, mere likelihood of deception, whereby an average person is likely to be deceived or confused is sufficient to entertain an action for passing off. Therefore, it is not at all required to be proved that any actual deception took place at Delhi. Accordingly the fact that the website of defendant No.1 can be accessed from Delhi is sufficient to invoke the territorial jurisdiction of this Court in the light of the judicial principles enunciated in the above judgments. It is, accordingly, held that the objections with regard to the territorial jurisdiction is without merit and this Court can try and entertain the suit.

(c ) Prima facie case and balance of convenience.

& (d ) Whether plaintiff disentitled to injunction on account of delays and laches and acquiescence.

(i) The averments with regard to plaintiff being given the sole and exclusive right to use the brand `casioindia' have already been noticed. The global reputation for the brand name `CASIO' claimed by Casio Japan as also the plaintiff is not in dispute. Plaintiff's grievance is against the defendant using the domain name `www.casioindia.com.' An additional affidavit dated 20.3.2003 had also been filed on behalf of the plaintiff. It is averred in the additional affidavit that the agreement dated 7.11.2000 of Casio Japan with the plaintiff, permitting use of the brand name Casio in India has been extended vide letter dated 5.11.2002 for a further period of two years i.e. up to 7.11.2004. Plaintiff thus claims to be entitled to use the brand name `CASIO' in India.

(ii)Plaintiff has a prima facie case based on the agreement with Casio Japan to use exclusively the brand name and trade mark `CASIO' in its domain name. The defendant has not paid any heed to the plaintiff's representations to desist from using the domain name. It has, therefore, to be examined whether the plaintiff is disentitled to an injunction on the basis of pleas as made in the written submissions and the averments in the written statement. The pleas of the defendant regarding the plaintiff not having a prima facie case on account of lack of locus as also the court lacking the territorial jurisdiction to try and entertain the suit have already been examined. The defendant claims that it registered the domain name on 13.11.1998 which was in the knowledge of the plaintiff. The defendant claims to have selling `CASIO' products in India with the active support and guidance of Casio Japan and the plaintiff. It is urged that defendant had put in considerable hard work and effort to develop its business, so that the various products including digital diaries, pagers etc. manufactured by Casio Japan are sold in India. The defendant's work had been given due recognition by Casio Japan and plaintiff. It is urged that even an award was conferred in the year 2001 in the Conference at Goa. The setting up and use of the domain name `www.casioindia.com' was it is argued with the full knowledge and support of the plaintiff. It is claimed that because defendant refused to oblige certain senior executives, who were interested in dislodging the defendant for their own vested interests that this suit has been instituted. It is for this reason that the plaintiff is now seeking to restrain the defendant from using the domain name which has been in continuous use of the defendant since November, 1998. The plaintiff and Casio Japan had benefited from the website portal with impugned domain name developed by the defendant. Plaintiff having taken advantage of the same, it is urged is now seeking to scuttle the defendant, against all equitable principles.

(iii) It was next argued that the plaintiff was not owner or registered user of the trade mark. The agreement did not confer any exclusive right on the plaintiff. This particular aspect has been discussed earlier under the issue of locus. The agreement of 7.11.2000 as extended gives the plaintiff right for use of the brand `CASIO' which would also include the right to have the domain name and site using the brand Casio and to prevent others from misusing the said name either as a domain name in a website or otherwise.

(iv) The two other pleas which need to be noticed and dealt with are the pleas of the defendant that the domain name site as had been functioning since 13.11.1998 is sought to be stopped by the suit filed in July, 2002. The defendant submits that the plaintiff's claim that it came to know of the domain name site in 2000 is not credible. It was inconceivable that the defendant did not know about the impugned domain name site only on the year 2000. The defendant has placed on record the various advertisements taken out in the newspapers for pagers and products of Casio, wherein the particulars of the impugned website and domain name are given. The defendant, therefore, claims that the plaintiff's suit is barred by limitation. In any case, the plaintiff on account of the delays, laches, acquiescence and waiver is disentitled to the relief of injunction.

(v) The plea of the defendant with regard to the suit being barred by limitation in so far as the relief of injunction is concerned is misconceived and devoid of merit. The limitation starts when the breach occurs. In the present case, the breach giving rise to the cause of action is a continuing one or occurs in succession, the right to sue shall arise correspondingly. Accordingly, as the domain name site continues to be used by the defendant, it gives a fresh right to sue.

(vi) Coming to the plea of delays, laches and acquiescence.

The defendant contends that when the domain site was registered on 13.11.1998, the name of the plaintiff was Casio Bharti Mobile Communication Ltd. In terms of the agreement dated 7.11.2000, the plaintiff was conferred the right to use the brand name since is incorporation which was in 1996. Reference is invited to the judgment of this Court in Hindustan Pencil Pvt. Ltd. vs. India Stationery Products Co. . The Court observed as under:

"It would appear to me that where there is an honest concurrent user by the defendant then inordinate delay or laches may defeat the claim of damages or rendition of accounts but the relief of injunction should not be refused. This is so because it is the interest of the general public which is the third party in such cases, which has to be kept in mind. In the case of inordinate delay or laches, as distinguished from the case of an acquiescence, the main prejudice which may be caused to the defendant is that by reason of the plaintiff not acting at an earlier point of time the defendant has been able to establish his business by using the infringing mark. Inordinate delay or laches may be there because the plaintiff may not be aware of the infringement by the defendant as not being serious enough to hurt the plaintiff's business. Nevertheless, if the Court comes to the conclusion that prejudice is likely to be caused to the general public who may be misled into buying the goods manufactured by the defendant thinking them to be the goods of the plaintiff then an injunction must be issued. The Court may, in appropriate cases, allow some time to the defendants to sell off their existing stock but an injunction should not be denied."

It would, therefore, be seen that while the delay or laches may defeat the claim for damages or rendition of accounts, but would not result in refusal of the relief of injunction, in case the plaintiff is so entitled otherwise. In the instant case, continuous user of the domain name site gives to the plaintiff a fresh cause of action apart from the right of the plaintiff qua the defendant to seek a restraint on the later exploiting its goodwill and reputation or trading in a manner so as to mislead the general public that the business of the defendant is the business of the plaintiff or is connected with it. The question of prejudice caused to the general public also comes into play. Reference may also be made to two authorities reported as Yahoo, Inc vs. Akash Arora 1999 PTC (19) 201 wherein learned Single Judge of this Court held "Admittedly the present case is not for an action for infringement of a registered trademark, but an action for passing off. The law relating to passing off is fairly well-settled. The principle underlying the action is that no man is entitled to carry on his business in such a way as to lead to the belief that he is carrying on or has any connection with the business carried on by another man. It is also well-established that passing-off action is a common law remedy." In Montary Overseas vs. Montari Industries Ltd. 1996 PTC 142 it is held that "when a defendant does business under a name which is sufficiently close to the name under which the plaintiff is trading and that name has acquired a reputation and the public at large is likely to be misled that the defendant's business is the business of the plaintiff, or is a branch or department of the plaintiff, the defendant is liable for an action in passing off." Reference may also be usefully made to Laxmikant V.Patel Vs.Chetanbhai Shah . The Supreme Court held, "A person may sell his goods or deliver his services such as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by Courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two, firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury. This forms of injury has also been termed as tort of injurious falsehood."

As observed by the Supreme Court, it is not material whether the defendant's actions are fraudulent or otherwise. The fundamental principle is that a person shall not trade under a name so closely resembling that of the plaintiff as to be mistaken for it by the public. Besides, as observed in Yahoo, Inc Vs. Akash Arora (Supra), the disclaimer cannot eliminate the problem. In Jesus Vs. Brodsky reported at 46 USPQ 2d 1652, it was held, "that due to the nature of Internet use, defendant's appropriation of plaintiff's mark as a domain name and home page address cannot be adequately remedied by a disclaimer."

In view of the foregoing discussion, plaintiff has a good prima facie case and mere delay and laches would not disentitle in these facts and circumstances from getting the relief of injunction.

(vii) Let us now consider whether the present case would fall within the plea of acquiescence as raised by the defendant. The objection of the defendant is based on the registration of the impugned domain name on 13.11.1998, when the plaintiff was known as Casio Bharti Mobile Communication Ltd. The plaintiff has, accordingly, acquiesced in the use of the domain name by the defendant for 37 months. What constitutes acquiescence has been commented by the Supreme Court in M/s. Power Control Appliances vs. Sumeet Machines Pvt. Ltd . The Court observed that :-

"Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts' not merely silence or inaction such as is involved in laches. "It is important to distinguish mere negligence and acquiescence." Acquiescence is one facet of delay. If the plaintiff stood by knowingly and let the defendants build up an important trade until it had become necessary to crush it, then the plaintiffs would be stopped by their acquiescence. If the acquiescence in the infringement amounts to consent, it will be a complete defense. The acquiescence must be such as to lead to the inference of a license sufficient to create a new right in the defendant."

The law of acquiescence is stated by Cotton, LJ in Proctor v. Bannis as under:

"It is necessary that the person who alleges this lying should have been acting in ignorance of the title of the other man, and that the other man should have known that ignorance and not mentioned his own title."

It cannot be that the defendant who was having even a distribution agreement with the plaintiff and arrangement with Casio Japan could be ignorant of the right of Casio Japan and plaintiff to the exclusive use of the trade mark and brand name "CASIO'. Besides no positive act on the part of the Casio Japan or plaintiff has been disclosed showing plaintiff's knowledge of the use of impugned domain name by defendant. In these circumstances, the ingredients as required for acquiescence in the light of the aforesaid principles are not made out.

7. The defendant has failed to disclose any right or title to use `CASIO' in its domain name. As discussed earlier, the impugned domain name is confusingly similar to plaintiff's trade mark and brand name `CASIO' and is likely to cause confusion. Because of the impugned domain name, members of the public are likely to be misled in believing that defendant has a business connection or is associated with the plaintiff and/or CASIO Japan. Simply because the defendant continues to deal in `CASIO' products in India on principal to principal basis or sells the same, it does not entitle him to use the brand name `CASIO' as a domain name in its website. Even the distribution agreement, which the defendant had with the plaintiff/Casio Japan has since expired and has not been renewed.

8. In view of the foregoing discussion, it is held that the plaintiff has made out a good prima facie case for the grant of an injunction. The balance of convenience is also in favor of the plaintiff and against the defendant. The defendant cannot be permitted to continue with the use of trade mark and brand name `CASIO' in its domain name. Accordingly, defendant No.1 is restrained from using he name `CASIO' in the impugned website `www.casioindia.com'. Defendant no.2 would also permit defendant No.1 to have a domain name registered but without the word `CASIO'. The application is allowed in the above terms.