Carlton Shoes Limited Vs VIP Industries Limited

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Date of Decision: 17th July, 2023
+ CS(COMM) 730/2019
CARLTON SHOES LTD. & ANR. ..... Plaintiffs

Through: Mr. Sandeep Sethi, Senior
Advocate with Mr. C.A. Brijesh,
Ms. Shreyosi Pal and Mr. Ishith Arora,
Advocates.
versus
VIP INDUSTRIES LTD. ..... Defendant

Through: Mr. Akhil Sibal, Senior Advocate
with Mr. Nishad Nadkarni, Mr. Ankur
Sangal Ms. Deboshree Mukherjee,
Mr. Ankit Arvind and Ms. Shifa Ashraf,
Advocates.
+ CS(COMM) 52/2020
VIP INDUSTRIES LTD. ..... Plaintiff

Through: Mr. Akhil Sibal, Senior
Advocate with Mr. Nishad Nadkarni,
Mr. Ankur Sangal, Ms. Deboshree
Mukherjee, Mr. Ankit Arvind and Ms. Shifa
Ashraf, Advocates.
versus
CARLTON SHOES LTD. & ANR. ..... Defendants

Through: Mr. Sandeep Sethi, Senior
Advocate with Mr. C.A. Brijesh,
Ms. Shreyosi Pal and Mr. Ishith Arora,
Advocates.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 1 of 53
Digitally Signed
By:KAMAL KUMAR
Signing Date:19.07.2023
18:18:12
JUDGEMENT
JYOTI SINGH, J.
I.A. 18443/2019 (under Order 39 Rules 1 and 2 CPC, by Plaintiffs) in
CS(COMM) 730/2019 and
I.A. 1369/2020 (under Order 39 Rules 1 and 2 CPC, by Plaintiff) in
CS(COMM) 52/2020
1. This judgment will dispose of the aforesaid two applications

filed by each party for interim injunction. On account of similitude of
facts and common questions of law being inextricably linked, both
applications were heard together and are being decided by this
common judgment. To the extent the facts are different in the two
suits, the same shall be adverted to in the later part of the judgment.
CS(COMM) 730/2019
2. CS(COMM) 730/2019 is filed by Carlton Shoes Limited and
Carlton Overseas Private Limited (hereinafter referred to as ‘Carlton’),
seeking a decree of permanent/perpetual injunction restraining the
Defendant (VIP) and all others acting on its behalf inter alia from
using Carlton’s registered trademark/name CARLTON/ CARLTON
LONDON/ (device mark) and CARLTON formative marks as

well as from using any other mark(s) identical/deceptively similar
thereto, amounting to infringement and passing off.
3. As per the averments in the plaint, Plaintiff No. 1/Carlton Shoes
Ltd. is a Company incorporated under the laws of England and
Plaintiff No. 2/Carlton Overseas Pvt. Ltd., is its Affiliate Company
incorporated under the provisions of the Companies Act, 1956 having
its registered office at Delhi. Carlton is a celebrated manufacturer and
designer of shoes for women, men and children and over the years
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have expanded the fashion business through accessories such as bags,
belts, jewellery, perfumes, watches, etc., under the umbrella brand
CARLTON LONDON. For its business, Carlton uses CARLTON
LONDON in several variants and the brand portfolio includes various
products.
4. It is averred that Carlton’s history can be traced back to the year
1989 when Mr. Baljit Virk established a Company in East End of
London for ladies’ fashion shoes and has been in business of
manufacturing and marketing footwear since 1971 in UK. The mark
CARLTON gets its inspiration from the name of Mr. Virk’s son, Mr.
Carljit Virk (born in 1978) and was first adopted in 1992 when
Carlton Shoes Limited was incorporated under the laws of England.
Carlton Overseas Private Limited was incorporated in 1993 in India.
In addition to the mark CARLTON, Plaintiff No. 1 also adopted inter
alia the mark CARLTON LONDON, in order to denote the place of
origin of the company and designed an artistic logo to be used

in conjunction with the trademarks CARLTON/CARLTON
LONDON.
5. It is further averred that with sheer determination and hard
work, within a span of 50 years in the footwear industry and 27 years
since the use of the brand CARLTON LONDON, Carlton has
produced and sold more than 5 million pairs of footwear and
thousands of bags and accessories. Carlton has 19 exclusive retail
outlets and 35 shop-in-shop stores and has sold products over 300
multi-brand retail stores in various countries in addition to sale on its
own websites and several e-commerce/ online shopping forums and

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plans to open around 100 stores in the next 5 years. In order to
safeguard its intellectual property rights in its most valuable
trademarks, Plaintiff No. 1 applied for registration in the word mark
CARLTON under Application No. 627450 in India as early as on
06.05.1994 in respect of class 18 goods i.e. leather and imitations of
leather and classes, animal skins, hides, trunks and travelling bags,
umbrellas, parasols, harness and saddlery, etc. Internationally, the
earliest registration of the mark CARLTON LONDON under No.
UK00002178254 was secured on 28.09.1998 in the United Kingdom
in class 25 goods i.e. footwear including boots, shoes, etc. and the
registrations are valid and subsisting. Subsequently, Carlton also
secured registrations for the mark/device CARLTON and CARLTON
comprising marks/device in various classes such as classes 3, 8, 9, 12,
14, 16, 18, 20, 30, 42 and 43 internationally and in India.
6. It is stated that Carlton has extensive presence in terms of
geographical spread and is recognised amongst members of the trade
and general public in respect of its footwear and class 18 goods and
has earned extensive goodwill and reputation in the trademarks
CARLTON/ CARLTON LONDON/ by years of hard work,

consistent quality and world class products. Popularity of the brand is
reflected by its consolidated sales/revenue figures under the
trademarks internationally and in India for the years ranging from
1992 to 2019, which are in excess of GBP 25 million. In India alone,
Carlton’s products have garnered tremendous sales and the sale
figures for the year 2017-18 alone are Rs.6753,87,202/- increasing
from Rs.162,84,730/- in the year 1993-94.
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7. Carlton has spent enormous amount of money, time and effort
in promoting and advertising its products globally through print and
electronic media and the success of its brand has featured extensively
on the internet and in high profile magazines/newspapers such as
Femina, Cosmopolitan, Fashion Bloom, Outlook, Society, The
Tribune, Business Standard, HT City, Pioneer, Apparel, Dash, etc., in
addition to regular exhibitions of its products in Dusseldorf Fair in
Germany, MICAM at Italy to name a few.
8. According to the averments in the plaint, disputes between the
rival parties were triggered by a cease and desist notice dated
10.10.2019 sent by the Defendant (hereinafter referred to as ‘VIP’) to
Carlton, alleging trademark infringement of its trademark CARLTON
and calling upon Carlton to stop using the mark in relation to class 18
goods. Carlton sent a detailed response on 25.11.2019 informing VIP
of its statutory and prior rights in the mark CARLTON dating back to
the year 1994 in respect of class 18 goods.
9. It is averred that further inquires by Carlton revealed that it was
only in the year 2004 that VIP acquired a dormant Company, namely,
Carlton International PLC, UK, which was under the process of
liquidation and was asserting its rights over the mark CARLTON on
the basis of this acquisition and no actual use of the mark was made
by VIP of its own before such acquisition. Carlton also came across an
interview of VIP’s Managing Director of the year 2016 indicating its
intention to expand to the lifestyle sector under the brand CARLTON,
which overlapped Carlton’s already established core business,
prompting Carlton to resort to a cancellation action on 23.12.2019

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against registration of the mark CARLTON under no. 1445045 in
class 18, before the erstwhile IPAB.
10. Carlton thereafter filed the present suit against VIP for
infringement of the trademark, copyright as well as passing off/unfair
competition. Albeit the Court did not grant ex parte ad-interim
injunction on 24.12.2019 on the ground that VIP also appears to have
an existing registration for the same mark in the same class for several
years, however, directed that in the event VIP expands into any other
sector of business, it will not claim any equities with regard thereto.
As a counterblast to Carlton’s suit, VIP filed a suit being CS(COMM)
52/2020 alleging infringement and passing off.
CS(COMM) 52/2020
11. CS(COMM) 52/2020 is filed by VIP seeking permanent
injunction restraining Carlton from manufacturing, selling,
distributing etc., goods falling in class 18 including travel bags, travel
luggage, strolleys, suitcases, duffel bags, laptop bags, wallets, etc.,
under the trademark ‘CARLTON LONDON’ and its formative marks,
which are identical/deceptively similar to VIP’s registered trade mark
CARLTON and its formative marks, amounting to infringement and
passing off, amongst other reliefs.
12. The case set out by VIP in the plaint is that VIP was
incorporated in India in 1968 and its name was changed to VIP
Industries on 16.06.1981. VIP claims to be a market leader in its
segment and manufactures an array of products including luggage and
travel bags, accessories, etc., under renowned brands like VIP,
CARLTON, Caprese, Aristocrat, Skybags and Alfa. The very first
suitcase of VIP was manufactured in 1971 and since then it
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has sold over 100 million pieces of luggage to people around the
world.
13. Going to the historical narrative of VIP’s CARLTON
trademark, it is stated that Carlton International PLC was incorporated
in London under the name Raxvale Limited on 12.11.1976. Raxvale
adopted the mark DIPLOMAT CARLTON in the year 1980 and the
mark CARLTON in 1986 with other variants. The products sold under
the mark CARLTON received immense recognition within a short
span of time and accordingly Raxvale applied for registration of the
mark in UK on 23.12.1986 in class 25 and in class 18

on 19.05.1988 and started exclusively and extensively using and
promoting the same which is reflected from the brochure for the year
1988. Therefore, the first adoption of the mark by VIP

in fact goes back to 1980 by virtue of assignment of the intellectual
property rights by its predecessor.
14. On 04.12.1989, Raxvale changed its name to Carlton
International PLC and also filed a design patent application on
13.07.1990 in relation to bags/suitcases. VIP’s predecessor had
expanded its business to over 50 countries across 4 Continents in 1994
and travellers from all countries, including India, were aware of the
products under the trademark CARLTON. VIP’s predecessor-in-title
applied for registration of the trademark CARLTON on 26.07.1995 in
class 18 for goods such as briefcases, suitcases, handbags, purses,
school bags, etc., in India, under Application no. 674589, which
stands registered.

Digitally Signed
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18:18:12
15. On 24.03.2004, VIP acquired the CARLTON marks along with
the goodwill from Carlton International PLC and as per the
Assignment Agreement dated 25.03.2004, goodwill of the predecessor
including goodwill established in the brand CARLTON and also its
formative marks stood assigned to VIP apart from intellectual property
rights including trademark rights.
16. VIP incorporated a wholly owned subsidiary in London on
19.03.2004 called Carlton Travel Goods Limited for carrying on
business in the goods under the trademark CARLTON and the goods
also included goods which were manufactured by VIP in India and
exported to UK. On 21.04.2006, VIP got its mark CARLTON
registered in class 18 in India by Application No. 1445045, claiming
use since 25.05.2004.
17. It is further averred that VIP and its predecessor have obtained
registrations for the mark CARLTON in various jurisdictions of the
world, including India in several classes in addition to class 18. In a
nutshell, the averment is that the earliest trademark Application for the
mark CARLTON in class 18 was applied by VIP’s predecessor in UK
on 19.05.1988, while in India, the earliest trademark Application was
filed on 26.07.1995 in class 18 and stands registered.
18. It is averred that products of VIP have been sold extensively in
India and various other countries over a period close to 7 decades. The
goodwill and reputation of VIP can be gauged by the year wise sale of
its products. As in the year 2018-19, the annual sales figures of VIP
were Rs. 1784.66 crores and sales figures have also been furnished in
the plaint commencing from 1979 which show an increasing
popularity of the brand. The export sales by VIP for goods under the
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mark CARLTON were worth Rs. 11.61 crores in the year 2019 and
domestic sales were to the tune of Rs. 69.44 crores in the year 2019.
VIP has invested and continues to invest huge amount of money, time
and effort for promotion and advertisement of its products under the
brand CARLTON and as an illustration, Rs. 47.88 crores have been
expended between 2006 to 2019 on advertisements and promotions
through different electronic and print media across the globe. VIP’s
acquisition of CARLTON marks was extensively covered on various
media platforms across India. British Olympic Association selected
VIP’s predecessor and the brand CARLTON as the official supplier of
travel goods for British Olympic Team for Atlanta Olympics in 1996.
By 1994 itself, VIP’s predecessor had expanded the business to over
50 countries across 4 Continents. Products under the CARLTON
marks had acquired transborder reputation in India by 1994 by virtue
of the fact that travellers from various other countries including those
in India learnt of the VIP’s predecessor’s products and their high
quality.
19. Disputes between VIP and Carlton arose in October, 2019 when
VIP learnt that Carlton had started using the trademark CARLTON in
relation to handbags and was in the process of expanding its business
into manufacture, marketing, distribution and/or sale of goods falling
under class 18. VIP issued a cease and desist notice dated 10.10.2019
to Carlton informing about its prior rights in the CARLTON marks.
VIP also came to know of Carlton Overseas Pvt. Ltd.’s registration for
the mark CARLTON in class 18 and immediately filed a rectification
against the wrongful registration, which is pending before the Trade
Marks Registry. Carlton sent a detailed reply dated 25.11.2019 to VIP
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claiming proprietary rights in the trademark CARLTON LONDON
and its variants. While VIP was chartering a further course of action, it
was served with the summons in the suit filed by Carlton being
CS(COMM) 730/2019, alleging infringement of its trademarks by
VIP. At the time of filing the suit, Carlton was not engaged in the
business of manufacturing, marketing, distribution and/or sale of
goods falling under class 18, namely, travel bags, suitcases, duffel
bags, laptop bags, etc. Attempts were made between the parties for
arriving at an amicable settlement, which were unsuccessful.
CONTENTIONS ON BEHALF OF CARLTON
20. VIP’s adoption and use of trademarks CARLTON (word mark)
and in relation to similar products by using

identical/deceptively similar trademarks tantamounts to infringement
of Carlton’s statutory rights vested in its registered and well-known
trademarks/names/logos CARLTON/CARLTON LONDON and
and their formatives as well as violation of common law

rights. By virtue of registration, Carlton has secured rights under
Section 28 of the Trade Marks Act, 1999 (hereinafter referred to as
‘1999 Act’) and is entitled to protection of the registered trademarks
from infringement under Section 29 of the said Act. On the other
hand, VIP’s claim of alleged infringement is misplaced even under
Section 28(3) of 1999 Act as the registration of Carlton is prior to
VIP, dating back to the year 1993/1994.
21. Use of identical/similar marks for similar products in class 18 is
a calculated effort by VIP to ride upon Carlton’s immense goodwill
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and reputation, with a dishonest intent and to cause misrepresentation
amongst the public that its goods emanate from Carlton or have a
connection/association with it and this action amounts to passing off
under common law.
22. Carlton’s trademarks were conceived and adopted after
inspiration from the name of Mr. Carljit Virk, the legal successor of
Carlton’s Founder. The mark CARLTON was adopted in 1992 when
Carlton Shoes Limited was incorporated under laws of England and in
India it was adopted in 1993. The earliest registration of the
trademarks in respect of goods in class 18 in India was secured on
06.05.1994, while internationally the earliest registration of the mark
CARLTON LONDON was obtained on 28.09.1998 in UK.
Subsequent thereto, several registrations were obtained for the
mark/device CARLTON in various classes such as 03, 08, 09, 12, 14,
16, 20, 30, 42 and 43, internationally and in India. Additionally,
Carlton also adopted the mark CARLTON LONDON to denote the
place of origin of the Company and designed an artistic logo to

be used in conjunction with the marks CARLTON/CARLTON
LONDON.
23. Carlton is a prime brand which forms part of the Company/trade
name and is also the house mark and from the very inception Carlton
has expanded business to include lifestyle and various ancillary goods
under several classes. Carlton has 23 exclusive retail outlets in several
countries including India with 35 shop-in-shop stores and products
available in over 300 multi-brand retail stores across the world. The
goodwill and reputation is further strengthened by the sales figures of

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products sold under its trademarks since 1993. Revenues earned in the
year 2017-18 alone are to the tune of Rs.6753,87,202/- and large sums
have been expended on advertisements and promotions on all media
platforms including high-profile magazines.
24. VIP has miserably failed in establishing spillover and/or trans-
border reputation of the mark CARLTON in the name of its
predecessor Carlton International PLC into the shores of India and it is
a settled law that trademark law is territorial in nature. Reliance was
placed on the judgment in Intercity Hotel GMBH v. Hotel Intercity
Delhi and Others, 2019 SCC OnLine Del 7644; ROCA Sanitario
S.A. v. Naresh Kumar Gupta & Anr., 2010 SCC OnLine Del 1135;
and Roland Corporation v. Sandeep Jain and Others, 2021 SCC
OnLine Del 3482.
25. Contrary to the claims of VIP in the cease and desist notice that
it adopted the mark CARLTON in 1976 and the use of the mark dates
back to 1970s, VIP has admitted to have allegedly commenced using
the mark in relation to class 18 goods only from 2005, post the
acquisition of a dormant Company Carlton International PLC.
Assuming without admitting that the assertion is correct, even then the
same is subsequent to Carlton’s use of the rival mark.
26. VIP has fraudulently attempted to justify and contend that the
mark CARLTON was adopted prior to Carlton’s adoption, relying on
trademark registration for the mark DIPLOMAT CARLTON in the
name of Raxvale Limited in the year 1980 in UK, conveniently not
disclosing the fact that UKIPO had granted registration to the said
mark with a clear disclaimer against usage of the word ‘CARLTON’.
In this context, reliance was placed on Cluett Peabody & Co. Inc. v.
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Arrow Apparals, 1997 SCC OnLine Bom 574; Veerumal Praveen
Kumar v. Needle Industries (India) Ltd. and Anr., 2001 SCC
OnLine Del 892; Toyota Jidosha Kabushiki Kaisha v. Prius Auto
Industries Limited and Others, (2018) 2 SCC 1; and Midas Hygiene
Industries (P) Ltd. and Another v. Sudhir Bhatia and Others, (2004)
3 SCC 90.
27. VIP’s suit suffers from delay, laches and acquiescence and it
cannot rely on the date of knowledge allegedly received in October,
2019, since it was aware of Carlton’s market presence, goodwill and
reputation and use of the marks/device CARLTON/CARLTON
LONDON in respect of class 18 goods for several years. This is
evident from Notice of Opposition filed by VIP in 2010 against
Carlton’s Application bearing No. 1568508 filed for mark
CARLTON LONDON on 14.06.2007, claiming use of the mark since
06.05.1994.
28. As an afterthought, VIP has placed reliance on Indian
registration no. 674589 filed on 26.07.1995 as its earliest registration
in India in order to claim statutory rights in the mark CARLTON. The
said registration was in fact filed by its predecessor and was allegedly
acquired by VIP only in 2004 and further the Deed of Assignment
clearly states that the rights stand assigned from the date of execution
i.e. 25.03.2004. In any event, even this registration is subsequent to
Carlton’s earliest registration dating back to 06.05.1994 in class 18 in
India. Furthermore, VIP’s own registration is much subsequent to that
of Carlton, with the earliest registration in 2006 and every other
subsequent application/registration dates back to 2017, which is

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indicative of not only VIP’s subsequent rights but also reflective of the
fact that its use is not prior to that of Carlton.
29. On 18.06.2004, VIP made an unsuccessful attempt to acquire
statutory rights in the mark CARLTON, however, its application for
the said mark under No. 1291024 in class 18 was rendered
‘abandoned’ by the Trade Marks Registry’s order dated 16.12.2014.
30. VIP has time and again taken strength from its rights under the
umbrella brand VIP to claim priority in the industry and the sales
figures/revenue and advertisement expenses to establish goodwill are
also with respect to expenditures/revenue under the brand VIP. Not a
single document or any other material has been placed for showing
sales/revenue pertaining to the brand CARLTON, perhaps for the
reason that the figures would be nominal and for a much later period.
There is no clarity at all as to the date of VIP’s own commencement of
user of the brand CARLTON in India and the only intent is to encash
on Carlton’s use and reputation.
31. Carlton has placed on record VAT Registration Certificates
reflecting that the mark CARLTON was in use in relation to class 18
goods since 1993 and has also filed several consumer complaints
originating in the year 2016 due to VIP’s use or launch of the products
under the mark CARLTON, wherein the customers showed
dissatisfaction on account of low quality of goods, which they had
bought under the impression that VIP was associated or connected
with Carlton. VIP’s claim to user is also belied by the interviews of its
own Managing Director who claimed that the brand CARLTON was
launched only in the year 2014. In fact, perusal of the invoices filed by
VIP shows that there is no reference to the mark CARLTON as a
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brand or product name prior to the year 2015. Insofar as Carlton
is concerned, import documents placed on record evidence sales
and marketing of products i.e. luggage/travel bags in class 18 since
2011.
CONTENTIONS ON BEHALF OF VIP
32. The earliest trademark Application for the mark CARLTON in
class 18 was filed by VIP’s predecessor Carlton International PLC in
India in the year 1995 and the same stands registered. Registration of
CARLTON marks gives statutory rights to VIP under Section 28 of
the 1999 Act to their exclusive use and to protect the registered marks
from infringement by an unauthorised person or entity under
Section 29 of the 1999 Act. Carlton has adopted identical marks and is
proposing to use or is using the same for identical goods and are guilty
of infringement.
33. VIP’s predecessor adopted the trademark DIPLOMAT
CARLTON in 1980 and the trademark CARLTON was adopted in the
year 1986 and application for registration for goods under class 18
was made in 1988. VIP’s predecessor adopted the trademark
CARLTON as a part of its Corporate name on 04.12.1989 and VIP
has been using the trademark ever since. A catalogue/brochure has
been placed on record for the year 1988 for Carlton bags to show
VIP’s predecessor’s use with respect to bags/suitcases at least since
the year 1988. By the year 1994, VIP’s predecessor had popularised
the products bearing the CARLTON marks across the world by
making sales in various countries and had generated trans-border
reputation.

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34. By virtue of the Agreement dated 25.03.2004, Carlton
International PLC assigned the goodwill as well as rights in the
trademark CARLTON and its variants to VIP and by virtue of the said
assignment, VIP is the owner and registered proprietor of the mark
and the use would date back to the date of adoption by its predecessor.
Therefore, Carlton’s date of adoption of the mark CARLTON, which
is admittedly 1992/1993/1994, is evidently subsequent to the date of
adoption by VIP, through its predecessor and VIP is thus the prior user
and prior adopter of the trademark CARLTON and has superior rights
by applying the test laid down by the Supreme Court in S. Syed
Mohideen v. P. Sulochana Bai, (2016) 2 SCC 683. The test for
determining prior use is to see who is ‘first’ in the market as held in
Milmet Oftho Industries and Others v. Allergan Inc., (2004) 12 SCC
624; Staples INC & Anr. v. Staples Paper Converters Pvt. Ltd., 2014
SCC OnLine Del 2092; Austin Nichols & Co. v. Arvind Behl, 2005
SCC OnLine Del 1276; M/s. Superflo Pvt. Ltd. v. M/s. Sandhyamani
Associates (P) Ltd. & Anrs., 2015 SCC OnLine Del 14403; and Neon
Laboratories Limited v. Medical Technologies Limited and Others,
(2016) 2 SCC 672.
35. Carlton has dishonestly adopted the trademark CARLTON with
a view to ride on the reputation and goodwill of VIP’s CARLTON
marks, which is evident from the fact that they chose to add suffix
‘LONDON’ to the said mark in order to draw an association with
VIP’s predecessor. Carlton is presumed to know or at least ought to
have known of the prior rights of VIP’s predecessor, especially since
Carlton claims that its founder Mr. Baljit Virk was in UK. Clearly, the
mark was neither adopted in India nor was first used in India by
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Carlton. Since the very adoption is dishonest and malafide, no
subsequent use can rescue Carlton from being held guilty of
infringement as laid down in Ansul Industries v. Shiva Tobacco
Company, 2007 SCC OnLine Del 74 and Suzuki Motor v. Suzuki
(India) Limited, 2019 SCC OnLine Del 9241. It is also settled that
use of a trademark with full knowledge of rights of another owner and
proprietor of the same mark is at one’s own peril and in such
circumstances, as held in M/s. Hindustan Pencils Private Limited v.
M/s. India Stationary Products Co. & Another, 1989 SCC OnLine
Del 34, injunction ought to be granted. To the same effect are the
observations of the Supreme Court in Midas Hygiene Industries (P)
Ltd. (supra).
36. Carlton is not only guilty of infringement but also liable for the
common law tort of passing off. All the three intrinsic requirements of
passing off viz. goodwill/reputation, deception/misrepresentation and
grave irreparable loss/damage are satisfied in the present case.
Reliance was placed on the judgment of the Supreme Court in
Laxmikant V. Patel v. Chetanbhai Shah and Another, (2002) 3 SCC
65.
37. VIP has through various documents placed on record clearly
shown that it is a prior adopter at least since 1986 and prior user since
1988 with respect to bags under the mark CARLTON. Albeit Carlton
has claimed adoption of the mark CARLTON in the year 1992, but
has failed to file any documents in support thereof. Assuming the said
date of adoption is to be accepted VIP is a prior adopter. Carlton’s
claim of user of the mark CARLTON since 1993 for goods falling in

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class 18 is also unsubstantiated and is merely a bald, vague and false
averment, without placing any material on record.
38. I have heard learned Senior Counsels for the parties and
examined their contentions.
39. In the present case, rival parties have asserted both statutory
rights and common law rights and alleged infringement and passing
off against each other. I would first examine the respective claims
in the context of infringement. On a historical analysis, VIP’s
predecessor-in-title Carlton International PLC was incorporated in
London on 12.11.1976 under the name Raxvale Limited. In the year
1980, Raxvale Limited adopted the mark DIPLOMAT CARLTON
and the mark CARLTON with a circular logo was adopted in 1986 in
relation to its business and products which included bags, travel bags
and luggage, strolleys, suit cases, school bags, wallets etc. and related
accessories.
40. Raxvale Limited applied for registration of the mark
in U.K. on 23.12.1986 in class 25 and on 19.05.1988

in class 18. Raxvale Limited changed its name to Carlton International
PLC on 04.12.1989 and after expanding its business in over 50
countries across four continents in 1994, applied for registration of the
trademark CARLTON on 26.07.1995 in class 18 for goods namely,
briefcases, luggage bags, suit cases etc. in India under application No.
674589, which was registered. VIP acquired the CARLTON marks
along with the goodwill from Carlton International PLC by and under
an Assignment Agreement dated 25.03.2004 and obtained registration
of CARLTON mark in class 18 on 21.04.2006 with user claim from
25.05.2004.
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18:18:12
41. Carlton, on the other hand, traces its history back to the year
1989 when its Founder established a company in East End of London
for ladies’ fashion shoes albeit the family of Mr. Virk was
manufacturing and marketing footwear since 1971 in UK. The mark
CARLTON was first adopted in 1992 when Carlton Shoes Limited
was incorporated under the laws of England. In India, Carlton
Overseas Pvt. Ltd. was incorporated in 1993. In addition to mark
CARLTON, Carlton adopted inter alia the mark CARLTON
LONDON to denote the place of origin of the company and also
designed and used an artistic logo in conjunction with the word mark
i.e. . Carlton applied for registration of the word mark

CARLTON in India on 06.05.1994 in class 18 for goods i.e.
leather/imitation of leather/animal skins/trunks and travelling bags etc.
and the registration is stated to be valid. Internationally, the earliest
registration of the mark CARLTON LONDON was obtained on
28.09.1998 in UK. Subsequently, registrations have been obtained in
various other classes, but not being relevant to the present case are not
alluded to herein. Before moving forward, it is important to look at a
comparative of the rival marks and a pictorial representation is as
follows:-
Carlton VIP
CARLTON CARLTON
(word mark) (word mark)

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42. On a comparison of the rival marks, there is no room for doubt
that the marks are phonetically identical and structurally and visually
similar and both VIP and Carlton have registrations for their
respective trademarks in respect of bags and allied goods falling under
class 18, which is the subject matter of the present suits. In view of
these facts, the question that first begs an answer is whether between
two registered proprietors of trademarks, which are identical or nearly
resembling each other, one proprietor can claim exclusive right to use
the trademark against the other where the registrations are in respect
of identical or similar goods and thereby claim infringement of its
registered trademark. The answer to this question lies in the provision
of Section 28(3) of the 1999 Act, which was considered at length by
the Supreme Court in S. Syed Mohideen (supra) and the Supreme
Court held:-
“27. Sub-section (3) of Section 28 with which we are directly
concerned, contemplates a situation where two or more persons are
registered proprietors of the trade marks which are identical with or
nearly resemble each other. It, thus, postulates a situation where
same or similar trade mark can be registered in favour of more than
one person. On a plain stand-alone reading of this Section, it is clear
that the exclusive right to use of any of those trade marks shall not
be deemed to have been acquired by one registrant as against other
registered owner of the trade mark (though at the same time they
have the same rights as against third person). Thus, between the two
persons who are the registered owners of the trade marks, there is
no exclusive right to use the said trade mark against each other,
which means this provision gives concurrent right to both the
persons to use the registered trade mark in their favour. Otherwise
also, it is a matter of common sense that the plaintiff cannot say that
its registered trade mark is infringed when the defendant is also
enjoying registration in the trade mark and such registration gives
the defendant as well right to use the same, as provided in Section
28(1) of the Act.”
43. Section 28(1) of the 1999 Act gives two valuable rights to the
registered proprietor of the trademark: (a) exclusive right to use the
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trademark in relation to goods or services in respect of which the
trademark is registered; and (b) to obtain relief in respect of
infringement of the trademark, in the manner provided under the 1999
Act and subject to other provisions of the said Act. Sub-section (3) of
Section 28 deals with a situation where two or more persons are
registered proprietors of trademarks which are identical to or nearly
resemble each other and in such an eventuality, the exclusive right to
use these trademarks shall not be deemed to have been acquired by
one of those persons against each other, merely on account of
registration, subject to a caveat that the trademarks are registered for
similar goods. In this scenario, neither of the two can sue each other
for infringement. This position of law is luminously clear from the
judgment of this Court in Rana Steels v. Ran India Steels Pvt. Ltd.,
2008 SCC OnLine Del 399, where the Court has elucidated on this
issue by illustrations, which in my view, would be apt in the present
case. Relevant passages from the judgment are as follows:-
“23. But, does section 30(2)(e) also cover cases where identical or
similar trade marks are registered in respect of different classes of
goods or services? The answer is - No. Section 28 deals with the
rights conferred by registration. And, it has already been clarified
that the use of a registered mark must be in relation to the goods or
services in respect of which the trade mark is registered. It follows
that where the goods or services, in respect of which two or more
identical or similar (nearly resemble) marks are registered, are
different then section 30 (2)(e) does not come into play. The question
of infringement would, itself, not arise as the registered marks would
be used in respect of different classes of goods or services by their
respective proprietors. A couple of examples would further clarify
the position:—
Example 1 : Assume that a trade mark “M” has been
registered in favour of Mr “X” as well as in favour of Mr “Y”
in relation to the same goods or services. In such a situation,
by virtue of section 28(3), neither Mr “X” nor Mr “Y” can
claim exclusivity against each other for the use of the said
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mark in relation to the goods or services for which it was
registered. If Mr “X” were to bring an action for infringement
against Mr “Y”, the latter would have a complete defence
under section 30(2)(e).
Example 2: Let us now assume that there are two different
goods “A” and “B” in respect of which the same trademark
“M” has been registered in favour of different persons “X”
and “Y”, respectively. Here, although the same mark “M” is
registered in favour of both Mr “X” and Mr “Y”, Mr “X” has
exclusive right to use the same in respect of good “A” and Mr
“Y” has exclusive right to use the said mark in respect of good
“B”. Therefore, section 28(3) is not attracted. Moreover, if Mr
“X” were to bring an action of infringement against Mr “Y”
alleging that Mr “Y” was using the said mark “M” in relation
to good “A”, then, the defence of section 30(2)(e) would not be
available to Mr “Y” as he does not have any right to use the
mark “M” in relation to good “A”, his registration being in
relation to good “B”.
(emphasis supplied)
24. At this point, it would be appropriate to refer to Section 7 of
the said Act which provides for classification of goods and services.
Sub-Section (1) stipulates that the Registrar shall classify the goods
and services, as far as may be, in accordance with the international
classification of goods and services for the purposes of registration
of trade marks. Rule 22 of the Trade Marks Rules, 2002 provides
that for the purposes of registration of trade marks, goods and
services shall be classified in the manner specified in the Fourth
Schedule. Clearly, registration of trademarks is in relation to
specified goods or services. Goods and services have been classified.
It is obvious that, prima facie, goods falling under one class would
be different from goods falling under another class. Ordinarily,
when registration of a trade mark is granted under one class of
goods, it does not cover goods of another class.
25. The plaintiff is the registered proprietor of the mark RANA
w.e.f. 14.12.1994 in relation to “steel rolled products, CTD bars,
angles, flats, rounds, channels and girders” falling under class 61 of
the Fourth Schedule to the Trade Marks Rules, 2002. The defendant
does not have a registered trade mark in respect of goods falling
under class 6 of the said schedule. However, as things stand today2,
the defendant is the registetred proprietor of the mark “RANATOR”
w.e.f. 26.04.2001 in respect of “Buliding materials (steels)” falling
under class 193. Whether the registration is liable to be cancelled,
as alleged by the plaintiff, or not, as contended by the defendant, is
not a matter for consideration before this court. For the present, in
view of section 31 of the said Act, the registration of the trade mark
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is prima facie evidence of its validity. So, considering the defendant's
registration to be valid, for the time being, it must be kept in mind
that the mark RANATOR is registered in class 19 and not class 6.
The plaintiff has brought this suit claiming its exclusive right to the
use of the trade mark RANA in relation to “steel rolled products,
CTD bars, angles, flats, rounds, channels and girders” falling under
class 6 of the Fourth Schedule to the Trade Marks Rules, 2002. The
defendant, admittedly, does not have any registration in class 6 (its
registration being under class 19). Therefore, the situation which
presents itself in the case at hand is similar to the situation explained
in Example 2 above. Consequently, neither is section 28(3) attracted
nor can the defendant take refuge under section 30(2)(e).
26. In Ramdev Food Products (P) Ltd. v. ARvindbhai Rambhai
Patel : (2006) 8 SCC 726 (at page 754), the Supreme Court observed
that the purpose of a trade mark is to establish a connection between
the goods and the source thereof which would suggest the quality of
goods and that if the trade mark is registered, indisputably the user
thereof by a person who is not otherwise authorised to do so would
constitute infringement. It was further noted that a proprietor of a
registered trade mark indisputably has a statutory right thereto. In
the event of such use by any person other than the person in whose
name the trade mark is registered, he will have a statutory remedy in
terms of Section 29 of the 1958 Act. The registration of the trade
mark RANA in relation to “steel rolled products, CTD bars, angles,
flats, rounds, channels and girders” falling under class 6 has
established a connection between such goods and the plaintiff who
manufactures them. Whenever such goods are found in the market
and they bear the mark RANA, the prospective consumer connects
the goods with the source, that is, the plaintiff (RANA STEELS). If
another person such as the defendant uses the same mark or a
similar mark in relation to the very same goods (steel rolled
products, CTD bars, angles, flats, rounds, channels and girders
falling under class 6) then, that would be seen as an interference and
an attempt at breaking the connection between the goods bearing the
mark RANA and the source, the plaintiff. In such a situation, the
plaintiff would have the statutory remedy of seeking injunction for
preventing further infringement.
27. The plaintiff has certainly established a prima facie case in
its favour. Because of registration and by virtue of section 28 (1) of
the said Act, an exclusive right of using the trade mark RANA has
been conferred upon the plaintiff in relation to steel rolled products,
CTD bars, angles, flats, rounds, channels and girders falling under
class 6. And, such right is absolute [see : Ramdev Food
Products (supra) (para 83)]. As observed in Ramdev Food
Products (supra) (para 82), what is needed by way of cause of action
for filing a suit of infringement of trade mark is use of a deceptively
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similar mark which may not be identical. It was contended on behalf
of the plaintiff that the marks RANA and RANATOR are identical
inasmuch as TOR is merely descriptive of a kind of high strength
steel. While this may be debatable, there cannot be any escape from
the fact that RANATOR is deceptively similar to RANA. It is
interesting to note that though the defendant's registration under
class 19 is in respect of the trade mark RANATOR used as one word,
the defendant has been using it in the form of two words RANA TOR.
This clearly signifies the defendant's intention to break up the mark
RANATOR into RANA and TOR. It is this separation of RANA and
TOR which, in fact, lays emphasis on the mark RANA because the
other word TOR, as is commonly understood, is merely descriptive
of a type of steel. The moment this happens there is every possibility
that the mark RANA TOR used by the defendant is confused by the
public at large with the plaintiff's registered trade mark RANA which
is used for the plaintiff's TOR steel products.”
44. This very issue was also the subject matter of consideration
before another Bench of this Court in A. Kumar Milk Foods Pvt. Ltd.
v. Vikas Tyagi & Anr., 2013 SCC OnLine Del 3439, wherein
Plaintiff’s trademark SHRIDHAR was registered under class 29 in
respect of ghee and other dairy products while Defendant’s trademark
SHREEDHAR was registered under class 30 for atta, maida and
besan. Relying on the judgment in Rana Steels (supra), the Court
delineated the scope and ambit of Section 28(3) of the 1999 Act as
follows:-
“28. Section 28(3) of the TM Act cannot be interpreted in a
manner that would be contrary to the above scheme of the Act and
Rules. In other words Section 28(3) of the TM Act should be
understood as not permitting an infringement action being brought
by one registered proprietor against another only where two
conditions are satisfied : one, that the two registered marks “are
identical with or nearly resemble each other”; and two, they are in
respect of the same class of goods and services. This will be in
conformity with the object of Section 28(1) read with Section 29 of
the TM Act which seeks to grant protection to the registered
proprietor of a mark from infringement in respect of the goods for
which registration is granted.”

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45. Coming back to the facts of the present case, it bears repetition
to state that VIP alleges that its trademarks CARLTON (word and
device) are infringed by Carlton with respect to bags and other allied
goods falling under class 18 as it has statutory rights emanating from
Section 28(1) of the 1999 Act, while Carlton accuses VIP of
infringement of its registered trademarks CARLTON (word and
device) for bags and allied goods falling under class 18. Applying the
binding dictum of the Supreme Court in S. Syed Mohideen (supra),
followed by this Court in several judgments, two of which have been
referred to above, the answer to the question as to whether VIP and
Carlton can allege infringement of their registered trademarks
CARLTON against each other is an emphatic ‘No’.
46. The issue that now arises is if VIP and Carlton can sustain their
claims for passing off invoking the provision of Section 27(2) of 1999
Act. This conundrum stands resolved by the Supreme Court in the
case of S. Syed Mohideen (supra), where the Supreme Court observed
that rights granted by registration in the form of exclusivity are not
absolute but are subject to other provisions of the 1999 Act. Section
28(3) merely provides that there shall be no rights of one registered
proprietor vis-à-vis another but only for the purpose of registration
and the provision does not deal with rights of passing off which
remain unaffected due to overriding effect of Section 27(2) and are
undisturbed even by the enactment of Section 28(3). Relevant
paragraphs of the judgment are as follows:-
“28. However, what is stated above is the reflection of Section 28
of the Act when that provision is seen and examined without
reference to the other provisions of the Act. It is stated at the cost of
repetition that as per this Section owner of registered trade mark
cannot sue for infringement of his registered trade mark if the
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appellant also has the trade mark which is registered. Having said
so, a very important question arises for consideration at this stage,
namely, whether such a respondent can bring an action against the
appellant for passing off invoking the provisions of Section 27(2) of
the Act. In other words, what would be the interplay of Section 27(2)
and Section 28(3) of the Act is the issue that arises for consideration
in the instant case. As already noticed above, the trial court as well
as the High Court have granted the injunction in favour of the
respondent on the basis of prior user as well as on the ground that
the trade mark of the appellant, even if it is registered, would cause
deception in the mind of the public at large and the appellant is
trying to encash upon, exploit and ride upon on the goodwill of the
respondent herein. Therefore, the issue to be determined is as to
whether in such a scenario, the provisions of Section 27(2) would
still be available even when the appellant is having registration of
the trade mark of which he is using.
xxx xxx xxx
30. Firstly, the answer to this proposition can be seen by
carefully looking at the provisions of the Trade Marks Act, 1999 (the
Act). Collective reading of the provisions especially Sections 27, 28,
29 and 34 of the Trade Marks Act, 1999 would show that the rights
conferred by registration are subject to the rights of the prior user of
the trade mark. We have already reproduced Section 27 and Section
29 of the Act.
30.1. From the reading of Section 27(2) of the Act, it is clear that
the right of action of any person for passing off the goods/services of
another person and remedies thereof are not affected by the
provisions of the Act. Thus, the rights in passing off are emanating
from the common law and not from the provisions of the Act and they
are independent from the rights conferred by the Act. This is evident
from the reading of the opening words of Section 27(2) which are
“Nothing in this Act shall be deemed to affect rights….”
30.2. Likewise, the registration of the mark shall give exclusive
rights to the use of the trade mark subject to the other provisions of
this Act. Thus, the rights granted by the registration in the form of
exclusivity are not absolute but are subject to the provisions of the
Act.
30.3. Section 28(3) of the Act provides that the rights of two
registered proprietors of identical or nearly resembling trade marks
shall not be enforced against each other. However, they shall be
same against the third parties. Section 28(3) merely provides that
there shall be no rights of one registered proprietor vis-à-vis another
but only for the purpose of registration. The said provision 28(3)
nowhere comments about the rights of passing off which shall
remain unaffected due to overriding effect of Section 27(2) of the Act
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and thus the rights emanating from the common law shall remain
undisturbed by the enactment of Section 28(3) which clearly states
that the rights of one registered proprietor shall not be enforced
against the another person.
xxx xxx xxx
31. Secondly, there are other additional reasonings as to why the
passing off rights are considered to be superior than that of
registration rights.
31.1. Traditionally, passing off in common law is considered to be
a right for protection of goodwill in the business against
misrepresentation caused in the course of trade and for prevention
of resultant damage on account of the said misrepresentation. The
three ingredients of passing off are goodwill, misrepresentation and
damage. These ingredients are considered to be classical trinity
under the law of passing off as per the speech of Lord Oliver laid
down in Reckitt & Colman Products Ltd. v. Borden Inc. [Reckitt &
Colman Products Ltd. v. Borden Inc., (1990) 1 WLR 491 : (1990) 1
All ER 873 (HL)] which is more popularly known as “Jif Lemon”
case wherein Lord Oliver reduced the five guidelines laid out by
Lord Diplock in Erven Warnink Besloten Vennootschap v. J.
Townend & Sons (Hull) Ltd. [Erven Warnink Besloten
Vennootschap v. J. Townend & Sons (Hull) Ltd., 1979 AC 731 at p.
742 : (1979) 3 WLR 68 : (1979) 2 All ER 927 (HL)] (“the Advocaat
case”) to three elements: (1) goodwill owned by a trader, (2)
misrepresentation, and (3) damage to goodwill. Thus, the passing off
action is essentially an action in deceit where the common law rule
is that no person is entitled to carry on his or her business on pretext
that the said business is of that of another. This Court has given its
imprimatur to the above principle in Laxmikant V. Patel v.
Chetanbhai Shah [Laxmikant V. Patel v. Chetanbhai Shah, (2002) 3
SCC 65] .
31.2. The applicability of the said principle can be seen as to
which proprietor has generated the goodwill by way of use of the
mark/name in the business. The use of the mark/carrying on business
under the name confers the rights in favour of the person and
generates goodwill in the market. Accordingly, the latter user of the
mark/name or in the business cannot misrepresent his business as
that of business of the prior right holder. That is the reason why
essentially the prior user is considered to be superior than that of
any other rights. Consequently, the examination of rights in common
law which are based on goodwill, misrepresentation and damage are
independent to that of registered rights. The mere fact that both
prior user and subsequent user are registered proprietors are
irrelevant for the purposes of examining who generated the goodwill
first in the market and whether the latter user is causing
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misrepresentation in the course of trade and damaging the goodwill
and reputation of the prior right holder/former user. That is the
additional reasoning that the statutory rights must pave the way for
common law rights of passing off.
32. Thirdly, it is also recognised principle in common law
jurisdiction that passing off right is broader remedy than that of
infringement. This is due to the reason that the passing off doctrine
operates on the general principle that no person is entitled to
represent his or her business as business of other person. The said
action in deceit is maintainable for diverse reasons other than that of
registered rights which are allocated rights under the Act. The
authorities of other common law jurisdictions like England more
specifically Kerly's Law of Trade Marks and Trade Names, 14th
Edn., Thomson, Sweet & Maxwell South Asian Edition recognises
the principle that where trade mark action fails, passing off action
may still succeed on the same evidence. This has been explained by
the learned author by observing the following:
“15-033. A claimant may fail to make out a case of
infringement of a trade mark for various reasons and may yet
show that by imitating the mark claimed as a trade mark, or
otherwise, the defendant has done what is calculated to pass off
his goods as those of the claimant. A claim in ‘passing off’ has
generally been added as a second string to actions for
infringement, and has on occasion succeeded where the claim
for infringement has failed.”
32.1. The same author also recognises the principle that the Trade
Marks Act affords no bar to the passing off action. This has been
explained by the learned author as under:
“15-034. Subject to possibly one qualification, nothing in the
Trade Marks Act, 1994 affects a trader's right against another
in an action for passing off. It is, therefore, no bar to an action
for passing off that the trade name, get up or any other of the
badges identified with the claimant's business, which are alleged
to have been copies or imitated by the defendant, might have
been, but are not registered as, trade marks, even though the
evidence is wholly addressed to what may be a mark capable of
registration. Again, it is no defence to passing off that the
defendant's mark is registered. The Act offers advantages to
those who register their trade marks, but imposes no penalty
upon those who do not. It is equally no bar to an action for
passing off that the false representation relied upon is an
imitation of a trade mark that is incapable of registration. A
passing off action can even lie against a registered proprietor of
the mark sued upon. The fact that a claimant is using a mark
registered by another party (or even the defendant) does not of
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itself prevent goodwill being generated by the use of the mark,
or prevent such a claimant from relying on such goodwill in an
action against the registered proprietor. Such unregistered
marks are frequently referred to as ‘common law trade marks’.”
32.2. From the reading of the aforementioned excerpts
from Kerly's Law of Trade Marks and Trade Names, it can be said
that not merely it is recognised in India but in other jurisdictions
also including England/UK (Provisions of the UK Trade Marks Act,
1994 are analogous to the Indian Trade Marks Act, 1999) that the
registration is no defence to a passing off action and nor the Trade
Marks Act, 1999 affords any bar to a passing off action. In such an
event, the rights conferred by the Act under the provisions of Section
28 have to be subject to the provisions of Section 27(2) of the Act
and thus the passing off action has to be considered independent
“Iruttukadai Halwa” under the provisions of the Trade Marks Act,
1999.”
47. This position of law stands reaffirmed and reiterated by the

Supreme Court in Toyota Jidosha Kabushiki Kaisha (supra), the
raison d’etre that action for passing off is premised on rights of a prior
user generating a goodwill, the essence and ethos of passing off being
that nobody has a right to represent his goods as those of somebody
and encash on the prior user’s formidable goodwill and reputation.
The Supreme Court took note of a passage from Kerly’s ‘Law of
Trade Marks and Trade Names’ which also finds reference in S. Syed
Mohideen (supra) stating that “Again, it is no defence to passing off
that Defendant’s mark is registered.” Passing off is a common law tort
unlike infringement which is regulated by a statutory regime. In
Kaviraj Pandit Durga Dutt Sharma v. Navratna Pharmaceutical
Laboratories, AIR 1965 SC 980, the Supreme Court held that if the
essential features of the trademark of the Plaintiff are adopted by the
Defendant, the fact that get-up, packing etc. are different or indicate a
trade origin different from that of the registered proprietor of the mark
would be immaterial, whereas in the case of passing off, Defendant
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may escape liability if it can show that the added matter is sufficient to
distinguish his goods.
48. Before embarking to examine whether either party has made out
a prima facie case of passing off against the other, another crucial
issue needs consideration, in the backdrop of the fact that both parties
have predicated their rights on the principle of “transborder
reputation”. In this context, I may first refer to the celebrated
judgment of the Supreme Court in N.R. Dongre and Others v.
Whirlpool Corporation and Another, (1996) 5 SCC 714, where
Whirlpool Corporation had sued N.R. Dongre, the Appellant before
the Supreme Court, for manufacturing and selling washing machines
under the trademark WHIRLPOOL, alleging confusion amongst the
buyers on the ground that they were being misled into believing that
the washing machines were in fact sold by Whirlpool. The Supreme
Court upheld the decision of the Division Bench of this Court
injuncting N.R. Dongre on the ground that Whirlpool although located
outside the territorial boundaries of India had the necessary
transborder reputation which had spilled into India. Years later in
2004, the Supreme Court decided the case of Milmet Oftho Industries
and Others (supra), where the competitor parties were selling
identical products under identical marks. The Supreme Court applied
the ‘first in the market’ test and upheld the decision of the Division
Bench of the High Court which had granted injunction in favour of the
Plaintiff in public interest since the product in question was a
pharmaceutical product.
49. Thereafter in the year 2018, the Supreme Court authoritatively
pronounced the judgment in Toyota Jidosha Kabushiki Kaisha
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(supra), which in my view, reflects a paradigm shift to the
territoriality principle from the universality doctrine, which implies
that the existence of goodwill and reputation has to be shown to exist
in India and worldwide or global goodwill and reputation, sans any
evidence of territorial goodwill and reputation will be insufficient to
succeed in a claim of passing off and thus yardstick to judge the claim
of passing off will be “prior user” in India. Relevant paragraphs of the
judgment are as follows:-
“29. The view of the courts in UK can be found in the decision of
the UK Supreme Court in Starbucks (HK) Ltd. v. British Sky
Broadcasting Group [Starbucks (HK) Ltd. v. British Sky
Broadcasting Group, (2015) 1 WLR 2628 : 2015 UKSC 31] wherein
Lord Neuberger observed as follows: (WLR p. 2643 E-G, para 52)
“52. As to what amounts to a sufficient business to amount to
goodwill, it seems clear that mere reputation is not enough….
The claimant must show that it has a significant goodwill, in the
form of customers, in the jurisdiction, but it is not necessary that
the claimant actually has an establishment or office in this
country. In order to establish goodwill, the claimant must have
customers within the jurisdiction, as opposed to people in the
jurisdiction who happen to be customers elsewhere. Thus, where
the claimant's business is carried on abroad, it is not enough for
a claimant to show that there are people in this jurisdiction who
happen to be its customers when they are abroad. However, it
could be enough if the claimant could show that there were
people in this jurisdiction who, by booking with, or purchasing
from, an entity in this country, obtained the right to receive the
claimant's service abroad. And, in such a case, the entity need
not be a part or branch of the claimant: it can be someone
acting for or on behalf of the claimant.”
30. It seems that in Starbucks (HK) Ltd. v. British Sky
Broadcasting Group [Starbucks (HK) Ltd. v. British Sky
Broadcasting Group, (2015) 1 WLR 2628 : 2015 UKSC 31] , the
Apex Court of UK had really refined and reiterated an earlier view
in Athletes' Foot Mktg. Associates Inc. v. Cobra Sports
Ltd. [Athletes' Foot Mktg. Associates Inc. v. Cobra Sports Ltd., 1980
RPC 343] to the following effect:
“… no trader can complain of passing-off as against him in any
territory … in which he has no customers, nobody who is in
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trade relation with him. This will normally shortly be expressed
by stating that he does not carry on any trade in that particular
country … but the inwardness of it will be that he has no
customers in that country …”
31. A passing reference to a similar view of the Federal Court of
Australia in Taco Bell v. Taco Co. of Australia [Taco Bell v. Taco
Co. of Australia, (1981) 60 FLR 60 (Aust)] may also be made.
32. Prof. Cristopher Wadlow's view on the subject appears to be
that the test of whether a foreign claimant may succeed in a passing-
off action is whether his business has a goodwill in a particular
jurisdiction, which criterion is broader than the “obsolete” test of
whether a claimant has a business/place of business in that
jurisdiction. If there are customers for the claimant's products in that
jurisdiction, then the claimant stands in the same position as a
domestic trader.
33. The overwhelming judicial and academic opinion all over
the globe, therefore, seems to be in favour of the territoriality
principle. We do not see why the same should not apply to this
country.
34. To give effect to the territoriality principle, the courts must
necessarily have to determine if there has been a spillover of the
reputation and goodwill of the mark used by the claimant who has
brought the passing-off action. In the course of such determination it
may be necessary to seek and ascertain the existence of not
necessarily a real market but the presence of the claimant through
its mark within a particular territorial jurisdiction in a more subtle
form which can best be manifested by the following illustrations,
though they arise from decisions of courts which may not be final in
that particular jurisdiction.
35. In LA Societe Anonyme Des Anciens Etablissements
Panhard v. Panhard Levassor Motor Co. Ltd. [LA Societe Anonyme
Des Anciens Etablissements Panhard v. Panhard Levassor Motor
Co. Ltd., (1901) 2 Ch 513] , the plaintiffs were French car
manufacturers who had consciously decided to not launch their cars
in England (apprehending patent infringement). Nevertheless, some
individuals had got them imported to England. It was seen that
England was one of the plaintiff's markets and thus, in this case,
permanent injunction was granted. Similarly in Grant v.
Levitt [Grant v. Levitt, (1901) 18 RPC 361] , a Liverpool business
concern trading as the Globe Furnishing Company, obtained an
injunction against the use of the same name in Dublin as it was
observed that advertisements by the plaintiff had reached Ireland
and there were Irish customers.

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36. C&A Modes v. C&A (Waterford) Ltd. [C&A Modes v. C&A
(Waterford) Ltd., 1976 IR 198 (Irish)] , was a case where the
plaintiffs operated a chain of clothes stores throughout the UK and
even in Northern Ireland but not in the Republic of Ireland where the
defendants were trading. The Court held that,
“a very substantial and regular custom from the Republic of
Ireland was enjoyed by this store. Up to that time an excursion
train travelled each Thursday from Dublin to Belfast, and so
great was the influx of customers from the Republic as a result
of that excursion that the store ordinarily employed extra part-
time staff on Thursday on the same basis as it did on Saturday
which were normally the busiest shopping days.”
The said view has since been upheld by the Irish Supreme Court.
37. Whether the second principle evolved under the trinity test
i.e. triple identity test laid down in Reckitt & Colman Ltd. [Reckitt &
Colman Products Ltd. v. Borden Inc., (1990) 1 WLR 491 : (1990) 1
All ER 873 (HL)] would stand established on the test of likelihood of
confusion or real/actual confusion is another question that seems to
have arisen in the present case as the Division Bench of the High
Court has taken the view that the first test i.e. likelihood of confusion
is required to be satisfied only in quia timet actions and actual
confusion will have to be proved when the suit or claim is being
adjudicated finally as by then a considerable period of time
following the initiation of the action of passing-off might have
elapsed. Once the claimant who has brought the action of passing-
off establishes his goodwill in the jurisdiction in which he claims that
the defendants are trying to pass off their goods under the brand
name of the claimant's goods, the burden of establishing actual
confusion as distinguished from possibility thereof ought not to be
fastened on the claimant. The possibility or likelihood of confusion is
capable of being demonstrated with reference to the particulars of
the mark or marks, as may be, and the circumstances surrounding
the manner of sale/marketing of the goods by the defendants and
such other relevant facts. Proof of actual confusion, on the other
hand, would require the claimant to bring before the Court evidence
which may not be easily forthcoming and directly available to the
claimant. In a given situation, there may be no complaints made to
the claimant that goods marketed by the defendants under the
impugned mark had been inadvertently purchased as that of the
plaintiff claimant. The onus of bringing such proof, as an invariable
requirement, would be to cast on the claimant an onerous burden
which may not be justified. Commercial and business morality which
is the foundation of the law of passing-off should not be allowed to
be defeated by imposing such a requirement. In such a situation,
likelihood of confusion would be a surer and better test of proving
an action of passing-off by the defendants. Such a test would also be
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consistent with commercial and business morality which the law of
passing-off seeks to achieve. In the last resort, therefore, it is
preponderance of probabilities that must be left to judge the claim.
38. The next exercise would now be the application of the above
principles to the facts of the present case for determination of the
correctness of either of the views arrived at in the two-tier
adjudication performed by the High Court of Delhi. Indeed, the
trade mark “Prius” had undoubtedly acquired a great deal of
goodwill in several other jurisdictions in the world and that too
much earlier to the use and registration of the same by the
defendants in India. But if the territoriality principle is to govern the
matter, and we have already held it should, there must be adequate
evidence to show that the plaintiff had acquired a substantial
goodwill for its car under the brand name “Prius” in the Indian
market also. The car itself was introduced in the Indian market in the
year 2009-2010. The advertisements in automobile magazines,
international business magazines; availability of data in
information-disseminating portals like Wikipedia and online
Britannica Dictionary and the information on the internet, even if
accepted, will not be a safe basis to hold the existence of the
necessary goodwill and reputation of the product in the Indian
market at the relevant point of time, particularly having regard to
the limited online exposure at that point of time i.e. in the year 2001.
The news items relating to the launching of the product in Japan
isolatedly and singularly in The Economic Times (issues dated
27-3-1997 and 15-12-1997) also do not firmly establish the
acquisition and existence of goodwill and reputation of the brand
name in the Indian market. Coupled with the above, the evidence of
the plaintiff's witnesses themselves would be suggestive of a very
limited sale of the product in the Indian market and virtually the
absence of any advertisement of the product in India prior to April
2001. This, in turn, would show either lack of goodwill in the
domestic market or lack of knowledge and information of the
product amongst a significant section of the Indian population.
While it may be correct that the population to whom such knowledge
or information of the product should be available would be the
section of the public dealing with the product as distinguished from
the general population, even proof of such knowledge and
information within the limited segment of the population is not
prominent.
39. All these should lead to us to eventually agree with the
conclusion of the Division Bench of the High Court that the brand
name of the car Prius had not acquired the degree of goodwill,
reputation and the market or popularity in the Indian market so as to
vest in the plaintiff the necessary attributes of the right of a prior
user so as to successfully maintain an action of passing-off even
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against the registered owner. In any event the core of the
controversy between the parties is really one of appreciation of the
evidence of the parties; an exercise that this Court would not
undoubtedly repeat unless the view taken by the previous forum is
wholly and palpably unacceptable which does not appear to be so in
the present premises.”
50. Following the decision in Toyota Jidosha Kabushiki Kaisha

(supra), a Co-ordinate Bench of this Court in BPI Sports LLC v.
Saurabh Gulati and Another, 2023 SCC OnLine Del 2424, culled out
the following principles:-
“39. The following principles emerge:
(i) The territoriality principle applies; not the universality
doctrine. Existence of goodwill and reputation has, therefore, to
be shown to exist in India. Universal or worldwide goodwill and
reputation, sans any evidence of territorial goodwill and
reputation, is not sufficient.
(ii) Mere reputation is not enough. The claimant/plaintiff must
show that it has significant goodwill.
(iii) The actual existence of an office of the plaintiff in the
country of the defendant is not necessary
(iv) However, the claimant must have customers within the
country of the defendant, as opposed to persons in the
defendant's country who are customers elsewhere. Thus, where
the claimant's business is carried on abroad, it is not enough for
the claimant to show that there are people in the defendant's
country who happen to be its customers when they are abroad.
(v) However, it would be enough if the claimant could show that
there were people in the defendant's country who, by booking
with, or purchasing from an entity in the defendant's country,
obtained the right to receive the claimant's service abroad. The
person from whom such booking or purchase took place could
be the claimant, or its branch office, or someone acting for or
on behalf of the claimant.
(vi) The claimant must be “present through its mark in the
territorial jurisdiction” of the country of the defendant, though
the existence of a “real market” was not necessary.
(vii) Such presence could, for instance, be shown by extensive
advertisements which had been circulated and seen, or read, in
the country of the defendant.

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(viii) Once the existence of trans border reputation and goodwill
was thus established, the claimant was not required, further, to
prove the existence of actual confusion. The likelihood of the
customer of average intelligence and imperfect recollection
being confused, by the use of the impugned mark of the
defendant, that the goods or services of the defendant were those
of the claimant-plaintiff, was sufficient.”
51. In Roland Corporation (supra), the Court was ceased of the

question as to which test was to be applied to determine passing off
i.e. whether the appropriate test was that of first in the market,
wheresoever in the world, which was the case set up by the Plaintiff
therein or first in the market in India and/or even if not first in the
market in India, having goodwill and reputation in India, which was
the contention of the Defendant relying on Toyota Jidosha Kabushiki
Kaisha (supra). The question was answered by the Court by holding
that in view of the judgment in Toyota Jidosha Kabushiki Kaisha
(supra), in an action for passing off, the factum of Plaintiff being first
in the world is irrelevant, without the Plaintiff establishing goodwill
and reputation in India. The Court found as a matter of fact that while
the Plaintiff claimed having an exclusive distributorship in India since
1993, but the same was not proved and therefore as far as India was
concerned, Defendants were the first user and that being the position,
the action for passing off has to fail. Relevant paragraphs of the
judgment are as follows:-
“34. The first question to be adjudicated is, the test to be applied
to determine passing off i.e. whether the appropriate test is that of
first in the market, wheresoever in the world, as contended by the
counsel for the plaintiff, relying primarily on Neon Laboratories
Ltd. supra and Milmet Oftho Industries supra, or of first in the
market in India and/or even if not first in the market in India, having
goodwill and reputation in India, as contended by the
defendant/counter claimant, relying on Toyota Jidosha Kabushiki
Kaisha supra.
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35. All the three judgments are of Benches of two Hon'ble Judges
of the Supreme Court. Having examined all the three judgments
minutely, in my view, in the facts of the present case, the law as laid
down in Toyota Jidosha Kabushiki Kaisha supra would apply and
not the law laid down in Neon Laboratories Ltd. supra and Milmet
Oftho Industries supra. Though Milmet Oftho Industries supra
unequivocally lays down that the mere fact that the mark had not
been used in India would be irrelevant if the mark was first used in
the world market but holds so in the context of drugs and medicinal
products, and after holding (i) that nowadays the field of medicine is
of an international character; (ii) that doctors, particularly eminent
doctors, medical practitioners and persons or companies connected
with medical field, keep abreast of latest developments in medicine
and preparations worldwide; (iii) that medical literature is freely
available in this country; (iv) that doctors, medical practitioners and
persons connected with the medical field regularly attend medical
conferences, symposiums, lectures etc; and, (v) that nowadays goods
are widely advertised in newspapers, periodicals, magazines and
other media which is available in the country, leading to a product
acquiring a worldwide reputation and all of which increase the
possibility of likelihood of deception or confusion and the possibility,
that with the passage of time, some conflict may occur between the
use of the mark by the Indian company and the use of the mark by
the overseas company and the Court must ensure that public interest
is in no way imperiled. The Supreme Court, after holding so, also
cautioned that multinational corporations which have no intention of
coming to India or introducing their product in India, may not
attempt to throttle Indian companies 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. I am
afraid, the said reasoning cannot be extrapolated to apply with
respect to musical instruments and public address system and their
parts. Moreover, Supreme Court in Milmet Oftho Industries supra
was concerned with an application for interim injunction. The stage
at which the Supreme Court was approached in Neon Laboratories
Ltd. supra was also at the stage of application for interim relief.
Though the said judgment also holds that the “‘first in the market’
test has always enjoyed pre-eminence” but again has observed so in
the context of manufacture and marketing of pharmaceutical
products and medicinal preparations and after finding, (a) that
though the defendant-appellant therein had applied for registration
on 19th October, 1992 and was granted registration on
14th September, 2001 but commenced use of the mark only from
16th October, 2004 onwards and that the mark had remained
dormant for 12 years; and, (b) that by the time, the defendant-
appellant therein commenced use of the mark, the plaintiff-
respondent therein was already in the market and was thus first in
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the market with the subject trademark. Again, this distinguishing fact
is enough for what is laid down in the said judgment not to be
blindly followed. DW-1 Arun Jain, partner of the defendant, in his
affidavit by way of examination-in-chief unequivocally deposed use
of the mark since 1979. Though he was cross-examined at length but
a dissection thereof does not show the plaintiff to have challenged
the use of the mark by the defendant since 1979, as deposed by DW-
1 Arun Jain in examination-in-chief. The plaintiff, in its written
arguments, has contended that there is no documentary evidence on
record of use of the mark by the defendant, in 1979. Plaintiff, in its
written arguments has further contended that evidence of first use of
the mark by the defendant is of the year 1996. However, in the face
of no challenge in cross-examination to the deposition of DW-1 Arun
Jain, of use since 1979, the plaintiff is found to have admitted the
same. The emphasis of the plaintiff, even otherwise has been on
establishing that some international registrations of the mark in
favour of the plaintiff are of prior to 1979, when the defendant
claims first use of the mark in India. I may notice, that in Neon
Laboratories Ltd. supra relied upon by the counsel for the plaintiff
herein, the plaintiff Neon Laboratories Ltd. was the first user of the
mark in the Indian market, despite earlier registration in favour of
the defendant therein who was ultimately injuncted from using the
mark subject matter of that case. Here, the defendant/counter
claimant is the first user of the mark in the Indian market.
36. Supreme Court, in Toyota Jidosha Kabushiki Kaisha supra
was concerned with a final decree in a suit for permanent injunction
restraining passing off. The plaintiff therein claimed to be the first
worldwide user of the mark ‘PRIUS’. However, the defendants
therein were the first user of the mark in India. The Single Judge of
this Court, relying on Milmet Oftho Industries supra, granted a
decree for injunction in favour of the plaintiff therein, restraining the
defendants from use of the mark ‘PRIUS’. In appeal, the Division
Bench of this Court reversed the decree, holding (i) that the first use
by the plaintiff outside India, of the mark, though widely reported
and advertised, did not have much reportage in India; (ii) that the
Territoriality Doctrine (a trade mark being recognized as having a
separate existence in each sovereign state and hence the rights in the
trade mark do not extend beyond the territory of the sovereign state
which has granted the rights) holds the field; (iii) that prior use of
the trade mark in one jurisdiction would not ipso facto entitle its
owner or user to claim exclusive rights to the said mark in another
dominion; (iv) that it is necessary for the plaintiff to establish that its
reputation had spilled over to Indian market prior to commencement
of the use of the mark by defendant in India; (v) that internet
penetration in India in 1997 was lean and it could not be said that
prior to April 2001, the plaintiff had established its goodwill and
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reputation in the Indian market, which the defendants had taken
advantage of; and, (vi) that the test of possibility/likelihood of
confusion would be valid at the stage of quia timet action and not at
the stage of final adjudication of the suit, particularly when the
defendants had used the impugned mark for a long period—the test
would be one of actual confusion and no evidence with respect
whereto was led by the plaintiff in that case. The Supreme Court,
while affirming the order of the Division Bench of this Court, further
held that, (a) to prove and establish an action of passing off, three
ingredients are required to be proved by the plaintiff, i.e., his
goodwill, misrepresentation by the defendant and damage; (b) the
test, of whether a foreign claimant may succeed in a passing-off
action, is whether his business has a goodwill in a particular
jurisdiction, which criterion is broader than the “obsolete test” of
whether a claimant has a business/place of business in that
jurisdiction; if there are customers for the plaintiff's products in that
jurisdiction, then the plaintiff stands in the same position as a
domestic trader; (c) the overwhelming judicial and academic
opinion all over the globe, therefore, seems to be in favour of the
territoriality principle which should apply to this country also; (d) to
give effect to the territoriality principle, the Courts must necessarily
have to determine if there has been a spillover of the reputation and
goodwill of the mark used by the claimant who has brought the
passing off action; and, (e) if goodwill or reputation in the particular
jurisdiction i.e. in India is not established by the plaintiff, no other
issue really would need any further examination to determine the
extent of the plaintiff's right in the action of passing off.
37. In my view, in the light of the aforesaid judgment, in an
action for passing off, as the present suit is, the factum of the
plaintiff being first in the world is irrelevant, without the plaintiff
establishing goodwill and reputation in India and which the plaintiff
has failed to prove. Though the plaintiff has claimed having an
exclusive distributor in India since 1993 but the same also remained
to be proved. Thus, as far as India is concerned, defendants are the
first user and that being the position, the action for passing off has to
fail.”
52. The said principle of territoriality was followed by the Co-

ordinate Bench of this Court in Bolt Technology OU v. Ujoy
Technology Private Limited and Another, 2023 SCC OnLine Del
1122, wherein the Court declined injunction to the Plaintiff in an
action for alleged passing off against the Defendant, on the ground

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that Plaintiff had no market exposure whatsoever in India and no
spillover or percolation of its transborder reputation into India was
made out. Court observed that the Defendant was first in the Indian
market in providing its product i.e. EV charging services and therefore
applying the territoriality principle which had overtaken the
universality doctrine, Defendant’s interest who was first and far ahead
of others in its field, could not be jeopardised. The Court also
observed as follows:-
“55. Here again, where the plaintiff, though situated abroad,
carries on business within the territory of India, or has some
business exposure within India, the exercise of examining whether
the plaintiff has the requisite goodwill or reputation in India is
simplified. We are, however, faced with a situation in which,
admittedly, the plaintiff carries on no commercial activity,
whatsoever, within the territory of India. The activities in which the
plaintiff is engaged are not, even to the most infinitesimal degree,
carried out within Indian borders.
56. Even in such a situation, however, the possibility of the
defendant, situated in India, passing off its goods and services as
those of the plaintiff is not entirely ruled out, for the simple reason
that the plaintiff, even if situated and carrying out its business
activities abroad, may, at any time, decide to expand, or diversify, to
India. A consumer of average intelligence and imperfect
recollection, who comes across the defendant operating under the
mark of the foreign plaintiff, or under a deceptively similar mark,
may well presume that the defendant has decided to enter the Indian
commercial firmament. Were this to be established, the defendant
might still be found guilty of passing off its goods or services as
those of the plaintiff, though the plaintiff is entirely situated abroad
and has, till date, no commercial existence in India.
57. By plain logic, however, in such a case, the plaintiff would
have to show that its goodwill and reputation, though garnered
abroad, is so considerable that it has spilled over to India. In other
words, the plaintiff would have to establish (i) that it has trans-
border reputation, i.e. reputation which extends beyond the regions
in which it has commercial existence, (ii) that the trans border
reputation has extended to India and (iii) that the “spillage” is so
considerable as to confuse or deceive a customer of average
intelligence and imperfect recollection into believing that the goods
or services of the defendant are those of the plaintiff.
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58. The task of identifying the indicia of trans border reputation
and the extent of is percolation into India to maintain a passing off
action against a defendant located in India is facilitated by a
considerable body of case law that has, over the years, developed on
the issue. I deem it appropriate to refer, in this context, to the
decisions of the Supreme Court and of Division Benches of this
Court on the issue, as they are of binding precedential value.”
53. After an in-depth analysis of the documents placed and relied

upon by both sides in the form of articles, surveys etc. the Court held
as follows:-
“73. Applying these principles to the facts of the present case, I
am unable to hold the plaintiff entitled to injunctive relief, against
the defendant, as sought. The plaintiff has not, in my opinion -
despite the commendable efforts of Ms. Sukumar to convince me
otherwise - been able to cross the Toyota trans-border threshold of
goodwill and reputation. I say so, for the following reasons:
(i) In support of her contention that the plaintiff's trans border
reputation had spilled over into India, Ms. Sukumar cited
(a) articles in the CNBC and the Economic Times,
(b) the downloading, by Indian users, of the plaintiff's mobile
App 2 lakh times, and
(c) the results of a survey conducted among drivers in
Ahmedabad, Pune, Surat, Chennai and Kolkata, which
disclosed the number of times the plaintiff's website was
accessed by them.
(ii) The CNBC article (reproduced in para 10 supra) reported
that
(a) the plaintiff was launching its electric kick scooter-
sharing service in Madrid, following a roll-out the previous
year in Paris,
(b) this marked a stepping stone in the plaintiff's move
towards new mobility options besides car hailing,
(c) the electric scooter craze looked set to gain further
ground in Europe,
(d) the plaintiff was promoting the advantages of electric
scooters as a viable option to beat traffic, when compared to
cars,

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(e) the plaintiff was also seeking to branch out into food
delivery, electric scooter and bike rentals, so as to become a
“super app”,
(f) for these expansions, the plaintiff was inviting investments
from investors, and
(g) the plaintiff was backed by the Chinese and German
“giants” Didi Chuxing and Daimler DAI-DE, which itself
owned a taxi hire application My Taxi.
(iii) The Economic Times article, for its part, reported that
(a) the plaintiff was a rival of Uber's ride sharing and food
delivery business,
(b) Bolt also offered electric scooter rentals, car sharing and
a 15-minute grocery delivery service,
(c) these services catered to 100 million customers in 45
countries and over 400 cities across Europe and Africa,
(d) the plaintiff faced competition in food delivery from, inter
alia, Just Eat, Takeaway.com and DoorDash, which had also
largely entered Europe, and
(e) to gain customers, platforms offered attractive discounts,
leading to price wars, and the plaintiff claimed to be offering
its services at lower prices than others.
(iv) Neither of these articles, therefore, made even an oblique
reference to the plaintiff entering the EV charging business.
Regarding EV charging as “allied” to electric scooter-sharing
services would, in my view, stretching the concept of allied
goods and services a notch too far. The import of these articles
is clear and obvious. The plaintiff was, till then, engaged in
providing taxi hailing services. It had, a year earlier, ventured
into the electric scooter sharing field, in Paris. It was seeking to
branch out into other cities in Europe and Africa. There is
nothing to indicate that it was either engaged in providing EV
charging services, or making EV charging points, or intending
to do so any time in the foreseeable future. More significantly,
these articles do not suggest, even obliquely, that the plaintiff
was expanding its activities to India or, for that matter, even to
Asia. It cannot, therefore, be held, on the basis of these articles,
that an average customer in India, who would read them, would
believe that the plaintiff was venturing into the Indian market
with EV charging solutions.
(v) The defendant had not sought to contend, anywhere, that it
was engaged, commercially, in the activity of EV charging
stations, or in providing EV charging services. In fact, in para
12 of the plaint, as Mr. Chander Lall correctly points out, the
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plaintiff has acknowledged that “consumers have become
accustomed to understanding that the trademark BOLT is a
commercial sign of origin specifically for mobility,
transportation and delivery goods and services”. There is no
reference, here, to providing EV charging services.
(vi) The limited reference to EV charging stations installed by
the plaintiff, is of charging docks installed by the plaintiff in
Tallinn and Estonia, with plans to install further docks in
Lithuania and Portugal, for charging the plaintiff's electric
scooters. I am, prima facie, in agreement with Mr. Lall that the
mere fact that the plaintiff, otherwise engaged in providing taxi-
hailing services and intending to expand into the electric scooter
sharing business, was installing charging docks to charge its
scooters in Tallinn, Estonia, Lithuania and Portugal, could
hardly make out a case even for inferring the existence of trans
border reputation, in the plaintiff, in the commercial EV
charging segment, much less of permeation of such trans border
reputation into India.
(vii) The number of times the plaintiff's App has been
downloaded in India, or its website accessed by drivers, cannot,
in my prima facie view, make out a case of spillover of trans
border reputation of the plaintiff, in the EV charging market,
into India, even if, arguendo, EV charging were to be regarded
as an activity allied to electric scooter sharing. Toyota is clear
in requiring that, even if the plaintiff has no market in India, it
would be required to show that its goods or services were
purchased, or availed, by customers in India through the
plaintiff, its branch, or its agents. The plaintiff's App cannot
substitute as an agent of the plaintiff, especially as the App can
be downloaded anywhere in the world.
(viii) Equally, Toyota also approves the view, in Starbucks, that
the existence of customers in the defendant's country, who would
avail the services of the plaintiff abroad, cannot make out a case
of permeation of trans border reputation. Ms. Sukumar
acknowledges that, even if persons in India were to download
the plaintiff's App, no services of the plaintiff could be availed
thereby in India, and that the purpose of such downloading
would only be to avail the plaintiff's services abroad. The
limited downloading of the plaintiff's App by persons who may
be travelling abroad to countries where the plaintiff's services
are available cannot, prima facie, be regarded as any sign of
spillover of the plaintiff's reputation into India, much less in the
EV charging arena.
(ix) The “driver survey”, to which Ms. Sukumar drew attention,
tells us precious little. All that is presented is a tabular
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statement of drivers in five cities. This statement is supposed to
reflect the number of times the plaintiff's website was accessed
by the drivers. Whether it does, or not, is anybody's guess; at the
very least, it is a matter which would have to suffer trial even for
a prima facie view to be ventured thereon. Even if it does, the
purpose of accessing the website is unknown. Nor can the Court
hold that the mere accessing of the plaintiff's website in this
fashion justifies a finding, even prima facie, of permeation of the
reputation of the plaintiff into India, far less in the field of EV
charging, which alone the defendant is engaged in.
(x) As in the case of Toyota, in the present case too, the evidence
and material cited by Ms. Sukumar, even view cumulatively, do
not constitute sufficient spillover, into India, of the trans border
reputation, if any, possessed by the plaintiff with respect to the
use of the mark as would justify injuncting the defendant
from using the impugned mark for EV charging stations.
(xi) Though Ms. Sukumar, in rejoinder, ventured a submission
that, even in the absence of spillover of trans border reputation,
mere intent, on the part of the plaintiff, to enter the Indian
market would be sufficient, the submission cannot, prima facie,
merit acceptance. It would, moreover, fly directly in the face of
the principles enunciated so authoritatively by the Supreme
Court in Toyota. Passing off is, at all times, a tort the
commission of which involves an element of confusion or
deception, and the confusion or deception must be suffered by
the mythical customer who chances on the defendant's mark.
For this, the awareness, by such customer, of the reputation of
the plaintiff, is an indispensable sine qua non. Intent of the
plaintiff to venture into the Indian market space cannot,
therefore, substitute the necessity of spillover of trans border
reputation.
(xii) For the same reason, the fact that the plaintiff may have
applied for obtaining trade mark registrations in India can have
no impact on the issue in controversy. The customer in India is
unaware of the number of applications submitted by the plaintiff
for registration of its mark.
xxx xxx xxx
75. For that matter, I am unable to convince myself, even prima
facie, that, even in the field of electric scooter sharing services, the
plaintiff has any trans border reputation, much less a reputation that
has spilled over into India. The plaintiff is, even internationally, a
new player in the electric scooter sharing field, though it might be
having considerable repute in the field of taxi-hailing. Quite apart
from the fact that the viability of electric scooter sharing appears
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18:18:12
itself to be mired in controversy, it is only in 2020 that the plaintiff
commenced providing such services in Paris. The existence of trans
border reputation, in the plaintiff, in the electric scooter sharing
arena too, is, therefore, extremely questionable. In any event, no
spillover of such reputation to India can, prima facie, be said to
exist.
76. The defendant, on the other hand, is the first in the Indian
market in providing EV charging services. Toyota makes it clear that
the “first in the market” principle has to be applied with respect to
the Indian, and not the international, market. The territoriality
principle has overtaken the universality doctrine. In the Indian
market, the defendant is not only the first; the material cited by Mr.
Lall, and noted hereinbefore, make out, prima facie, an enviable
exposure of the defendant in the EV sharing space, far ahead of
others in the field. The comparative analysis of the plaintiff's and
defendant's exposures in this field in India, therefore, eminently call
for application of the note of caution sounded in Milmet Oftho, of not
allowing foreign Companies to throttle Indian entrepreneurs.
77. There is no justification, therefore, prima facie, for the Court
to, by allowing the application of the petitioner, who has no market
exposure whatsoever in India, and, prima facie, no spillover or
percolation of its trans border reputation into India, to
jeopardize the market, or the repute, that the defendant has earned
by use of the impugned mark, for providing EV charging
services.”
54. Pertinent would it be to refer to a recent judgment of this Court

in Toyota Jidosha Kabushiki Kaisha v. Tech Square Engineering
Pvt. Ltd. and Another, 2023 SCC OnLine Del 583, wherein relying
on the principles elucidated in Toyota Jidosha Kabushiki Kaisha
(supra), the Court posed to itself the question as to whether in the said
case Petitioner had produced sufficient evidence on record in support
of its contention that trademark ALPHARD carried a transborder
reputation that had spilled over in India and answered it by holding
that merely the international usage of the trademark was not sufficient
to prove the spillover in India and since Petitioner had failed to place
on record even a single invoice to show that it had sold any car under
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18:18:12
the brand ALPHARD in India and all the documents only reflected the
goodwill and reputation in several other jurisdictions, it could not be
stated that substantial number of consumers knew about its existence
in India. Accordingly, the rectification petition was dismissed.
55. From a conjoint reading of the aforesaid judgments, the singular
principle that emerges for deciding the claim of passing off will be to
assess the existence of goodwill and reputation ‘in India’. As a
corollary, worldwide or global goodwill and reputation will not suffice
albeit actual or physical existence of brick and mortar stores may not
be necessary in the country. In other words, Plaintiff would have to
establish its ‘presence’ within the jurisdiction of Defendant’s country
and this presence can be through advertisements and promotion and
not necessarily by real market but with a rider that that the “spillage”
is so considerable as to confuse or deceive a customer of average
intelligence and imperfect recollection into believing that the goods or
services of the Defendant are those of the Plaintiff.
56. Tested on the anvil of the observations of the Supreme Court in
Toyota Jidosha Kabushiki Kaisha (supra) and the aforementioned
judgments, in order to succeed in the claim for passing off, both VIP
and Carlton in their respective rights would have to establish their
existence through their marks in India and their goodwill and
reputation abroad alone would not suffice, applying the territoriality
principle.
57. VIP has placed on record promotional and advertisement
material in support of its claim of transborder reputation of its
predecessor-in-title Carlton International PLC. As an illustration, one
of the said document is extracted hereunder, for ready reference:-
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18:18:12
58. It is palpably clear that these documents shed no light on
whether the purported promotion material was extensively and widely
published and/or circulated in India and customers here had seen and
read them such that the goodwill and reputation of VIP’s predecessor
percolated and spilled into India, since universal or worldwide
goodwill and reputation, sans any evidence of territorial goodwill and
reputation, is no longer the yardstick. As held by the Co-ordinate
Bench, Plaintiff must have customers within the country of the
Defendant, as opposed to persons in the Defendant’s country who are
customers elsewhere. Thus, where Plaintiff’s business is carried on
abroad, it is not enough to show that there are people in the
Defendant’s country who happen to be its customers when they are
abroad. None of the promotional material or articles placed on record
by VIP even obliquely reflect VIP’s predecessor’s existence in the
Indian market till 2004, when VIP acquired the trademarks and
consequential rights and goodwill, by way of an Assignment
Agreement. Some documents, purportedly advertisements/price lists,
reflect their origin dating back to the 1980s and 1990s, but there is no
supporting material to show their awareness amongst customers in
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18:18:12
India. It must be kept in mind that in that era, knowledge and
awareness of brands was mostly through travel of people off shores or
through electronic/print media as the online exposure was limited. No
documents are found on record which would evidence sales in India
by VIP’s predecessor, in the form of invoices, bills, delivery
documents, photographs of stores displaying the products, etc. under
the trademark CARLTON. VIP has laboured to piggy back on the
advertisements and sales figures of its umbrella brand VIP in a
misdirected effort to generate goodwill, however, that cannot aid VIP
as the test here would be goodwill and reputation generated under the
trademark CARLTON and not VIP.
59. Applying the aforesaid principles culled out by the Court in BPI
Sports LLC (supra), VIP is required to show prima facie at this stage
that it had customers/sales in India for its goods i.e. bags and other
allied goods falling under class 18 under the trademark CARLTON,
prior to Carlton, as opposed to customers outside the territorial
boundaries of India. It is not enough to show that people in India were
customers of Carlton International PLC, when they travelled abroad,
going by the recent judicial precedents on this aspect. In a nutshell,
VIP is required to prima facie demonstrate the presence of its mark
within Indian boundaries, which, in my opinion, it has failed to do, at
this stage.
60. To substantiate its case, VIP has also placed reliance on certain
articles, advertisements and sales invoices of goods under the mark
CARLTON, post-acquisition of Carlton International PLC by VIP.
However, all that can be said at this stage is that none of these
documents evidence user of the mark CARLTON prior to the user by
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18:18:12
Carlton. The earliest sales invoice placed on record by VIP is dated
11.08.2006, followed by invoices dated 26.10.2006, 31.10.2006,
29.01.2007 and 30.01.2007 and thereafter from 05.11.2012 onwards.
Significantly, invoices for the years 2006 and 2007 have no reference
to CARLTON. To overcome this lacuna, pointed out by Carlton
during the course of hearing, VIP filed additional documents vide
Index dated 20.05.2022, containing a list of invoices allegedly
reflecting sale of bags and learned Senior Counsel laboured hard to
co-relate the sales, price lists and the promotional brochures. As an
illustration, invoice dated 22.12.2006 annexed at Page No. 1 of the
Index dated 20.05.2022, reflects the category of bag as ‘Airtec’ which
finds mention in a price list annexed at Page 3 and promotional
brochures are at Pages 4 to 6. However, despite this exercise and
assuming the stand of VIP to be correct on its face value that bags
were sold under the said invoices, no mileage can be drawn by VIP
from these invoices, since the earliest invoice even in the additional
set of documents dates back to 22.12.2006, which is well after the
earliest sales of Carlton in India, which according to Carlton goes
back to the year 1992/1993. In a nutshell, the documents filed by VIP
i.e. promotional material, articles, sales/tax/import invoices etc. even
cumulatively, do not constitute sufficient spillover into India of the
transborder reputation, so as to defeat the claim of Carlton.
61. Passing off is a tort premised on deceit and involves an element
of confusion among and deception of a mythical customer who
chances on the Defendant’s mark and it goes without saying that for
this, Plaintiff’s reputation is an indispensable element. Absence or
negligible presence of VIP’s goods in question under the trademark
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CARLTON in the Indian market space when Carlton started to occupy
the space, defeats VIP’s claim of passing off against Carlton.
62. Carlton, on the other hand, is ‘first in the Indian market’ in
respect of bags and allied goods falling under class 18 sold under the
trademark CARLTON, territoriality principle having overtaken the
universality doctrine. In the Indian market, prima facie Carlton has
made out a case of prior user and enviable exposure of bags under the
mark CARLTON, which is demonstrable from the following
documents:-
(a) Invoices of sales from the year 2003 from various shops
in different malls in Punjab, Haryana and Rajasthan as also list
of 24 outlets across Delhi, Gurgaon, Noida, Chandigarh etc.
where some sales invoices pertain to the years 2003 to 2005.
(b) Certificate of Sales figures/revenues under the mark
CARLTON in India for the years 1993-2018.
(c) Articles extensively figuring on various high-profile
magazines and newspapers widely published and circulated in
India such as Cosmopolitan, Femina, Fashion Bloom, Apparel,
Society, Outlook, The Tribune, The Pioneer, HT City,
Business Standard, The Hindu etc. The earliest promotional
material for bags dates back to March, 2004.
(d) Presence on e-commerce platforms available in India like
Myntra, Flipkart, Amazon, etc.
(e) VAT registrations from the year 1993 onwards.
(f) Master data of production under the CARLTON marks
from the year 2003 onwards.

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(g) Consumer complaints from the year 2016 onwards
showing actual confusion amongst consumers mistaking VIP’s
products for Carlton’s products.
63. Passing off is a common law remedy based on the ethos and
principles that goodwill in the business must be protected against
misrepresentation by third parties in the course of trade and in several
judgments, Courts have echoed that assertion of the right in passing
off is premised on the ground that no one has a right to represent
his goods or services as that of someone else and even if
misrepresentation is not fraudulent or deliberate but innocent, Courts
would come to the aid and grant injunction to protect the goodwill.
The essential characteristics/elements of the action of passing off have
been succinctly brought out by Lord Diplock in Erven Warnink BV v.
J. Townend & Sons (Hull) Ltd., [1979] 2 All ER 927 and it would be
apposite to refer to them hereunder:
“(1) a misrepresentation, (2) made by a trader in the course of
trade, (3) to prospective customers of his or ultimate consumers of
goods or services supplied by him, (4) which is calculated to injure
the business or goodwill of another trader (in the sense that this is a
reasonably foreseeable consequence), and (5) which causes actual
damage to a business or goodwill of the trader by whom the action is
brought or in a quiatimet action will probably do so”
64. VIP has prima facie failed to establish spillover of transborder

reputation in India and/or prior user while Carlton is first in the Indian
market and has shown formidable goodwill and reputation under the
trademark CARLTON and its formative marks. VIP stepped into the
market under the mark CARLTON well after Carlton and knowing the
presence and existence of Carlton in bags in India, adopted
phonetically identical and visually similar trademarks for similar
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goods, which needless to say would lead to likelihood of confusion
with an unwary purchaser believing that the bags are sold by Carlton.
In fact, in this case, Carlton has also placed on record material to show
that VIP itself claims launch of its products under CARLTON in 2014
and complaints from customers from 2016 of actual confusion
alleging inferior quality, which though is a matter of trial but does
dent the case of VIP for passing off. No documents supporting passing
off by Carlton have been filed by VIP, per contra. Therefore, Carlton
has made out a prima facie case for grant of injunction and irreparable
loss shall be caused if VIP is not restrained from selling similar goods
under the trademark CARLTON (word and device). Balance of
convenience also lies in favour of Carlton.
65. VIP relied on judgments on the proposition of ‘first in the
market principle/prior user’. In my view, judgments in S. Syed
Mohideen (supra), Milmet Oftho Industries (supra) and Neon
Laboratories Limited (supra), aid the case of Carlton which has been
successful in establishing prior user by way of sales and various other
documents. VIP has also placed reliance on the judgments in Ansul
Industries (supra) and Suzuki Motor (supra) for dishonest adoption,
but these would also not help, as VIP has failed to make out a case of
dishonest adoption by Carlton. The remaining judgments are on well
settled proposition of law which can hardly be disputed but do not
further the case of VIP in the facts of the present case.
66. For all the aforesaid reasons, this Court comes to a prima facie
conclusion that Carlton has made out a case for grant of injunction
against VIP. Accordingly, I.A. 18443/2019 in CS(COMM) 730/2019
filed by Carlton is allowed to the extent of restraining VIP, its assigns,
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By:KAMAL KUMAR
18:18:12
affiliates, relatives, successors-in-interest, licensees, franchisees,
partners, representatives, servants, distributors, employees, agents and
all other persons from marketing, selling or offering to sell bags and
other allied goods falling in class 18 under its trademarks CARLTON
(word mark) and and/or any other trade mark identical/

deceptively similar to Carlton’s trademarks CARLTON/CARLTON
LONDON/ or any variants thereof singularly or in

conjunction with any other word or monogram/logo or label or in any
other manner, amounting to passing off. I.A. 1369/2020 in
CS(COMM) 52/2020 filed by VIP against Carlton is dismissed.
67. It is however directed that Carlton shall maintain accounts of
manufacture and sales of the impugned products under the marks
CARLTON/CARLTON LONDON/ and shall file the same

on affidavit on half-yearly basis in this Court.
68. Both IAs stand disposed of making it clear that the observations
and opinion of the Court expressed in the present judgment are only
tentative and prima facie and will have no bearing on the final
adjudication of the suits on merits.
CS(COMM) 730/2019 & CS(COMM) 52/2020
List these matters before the Roster Bench on 09.08.2023,
subject to orders of the Hon’ble Judge In-charge (Original Side).
JYOTI SINGH, J
JULY 17 , 2023/Shivam/kks
Digitally Signed
By:KAMAL KUMAR
18:18:12

Carlton Shoes Limited Vs VIP Industries Limited

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Carlton Shoes Limited Vs VIP Industries Limited

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

CARLTON SHOES LTD. & ANR. ..... Plaintiffs

VIP INDUSTRIES LTD. ..... Defendant

VIP INDUSTRIES LTD. ..... Plaintiff

CARLTON SHOES LTD. & ANR. ..... Defendants

1. This judgment will dispose of the aforesaid two applications

LONDON/ (device mark) and CARLTON formative marks as

origin of the company and designed an artistic logo to be used

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 3 of 53

CARLTON/ CARLTON LONDON/ by years of hard work,

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 5 of 53

mark in UK on 23.12.1986 in class 25 and in class 18

1988. Therefore, the first adoption of the mark by VIP

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 7 of 53

and in relation to similar products by using

and their formatives as well as violation of common law

place of origin of the Company and designed an artistic logo to

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 11 of 53

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 13 of 53

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 15 of 53

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 17 of 53

in U.K. on 23.12.1986 in class 25 and on 19.05.1988

i.e. . Carlton applied for registration of the word mark

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 19 of 53

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 24 of 53

47. This position of law stands reaffirmed and reiterated by the

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 32 of 53

50. Following the decision in Toyota Jidosha Kabushiki Kaisha

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 35 of 53

51. In Roland Corporation (supra), the Court was ceased of the

52. The said principle of territoriality was followed by the Co-

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 39 of 53

53. After an in-depth analysis of the documents placed and relied

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 41 of 53

54. Pertinent would it be to refer to a recent judgment of this Court

Signature Not VerifiedCS(COMM) 730/2019 & 52/2020 Page 50 of 53

64. VIP has prima facie failed to establish spillover of transborder

(word mark) and and/or any other trade mark identical/

LONDON/ or any variants thereof singularly or in

CARLTON/CARLTON LONDON/ and shall file the same

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