09 Mar Can a plaint be rejected as it does not arise within the territorial jurisdiction of a court? Or will it be accepted because the defendants are going to commit the violation of the Plaintiff’s statutory right within the jurisdiction of a court? Is ‘ZACLEAR’ of the defendants is deceptively similar to the plaintiff’s mark “ZYCLEAR?
Decided by Learned Judge Jayant Nath, J : 22.02.2021 In the High Court of Delhi , CS (COMM) 415/2020 in the case of Appellants: Cadila Healthcare Limited Vs. Respondent: Uniza Healthcare LLP and Ors. IA No. 11873/2020.
Facts of the Case
- None of the parties has their registered office within the territorial jurisdiction of this court and no part of the cause of action arose within the jurisdiction of this court.
- The defendant prayed that the plaint be rejected for want of cause of action as the same neither accrued nor arose in favour of the plaintiff and against the defendants within the territorial jurisdiction of High Court of New Delhi this court,3. Learned senior counsel for the plaintiff pleaded that a perusal of the plaint would show that clear averments are made that the plaintiff apprehends that the defendants would be selling products in Delhi. Hence the suit is in the nature of a quia timet action.
4. Learned senior counsel for the plaintiff pleaded that the threat of Defendants attempting to ride off the goodwill and reputation of the Plaintiff looms large as the Defendant No. 2 had been employed with the Plaintiff for nearly 12 years in the Sales and Marketing Department and is well aware of the focus markets and brand strategies of the Plaintiff. His plans, therefore, to launch ZACLEAR, a brand deceptively similar to ZYCLEAR, within 4 months of quitting the Plaintiff’s employment, reeks of dubious designs and manifestly mala-fide and calculated to deceive the public and members of trade.
5.Moreover, the Plaintiff submits that a part of cause of action has arisen in New Delhi as the Defendants have customers, consumers, buyers and host of other persons for various aspects of their business activities in New Delhi and are also involved in large number of activities in New Delhi. All these establish beyond doubt that the Defendants have targeted New Delhi and purposefully availed the jurisdiction of this Hon’ble Court.
- The Plaintiff is selling its product under trade name ‘ZYCLEAR’ in New Delhi and apprehends that the Defendants are also targeting Delhi as its focus market and are likely to launch the product in New Delhi in the near future. In such circumstances, the Defendants are going to commit the violation of the Plaintiff’s statutory rights in New Delhi and pass off their products/formulations as those of the Plaintiff within the territorial jurisdiction of this Hon’ble Court. In such circumstances, the Plaintiff’s goodwill and reputation will suffer irreparably in case the relief claim is not granted. The damages if calculated shall not be less than INR 2 crores therefore, for the purpose of peculiarly jurisdiction the present suit is valued at INR 2,00,00,600/-.”
CITED CASE LAW FACTS
- In Pfizer Products, Inc v. Rajesh Chopra MANU/DE/0708/2006 : 2006 (32) PTC 301, the Court observed as under:”The other aspect of the matter is that a threat of selling the offending goods in Delhi would in itself confer jurisdiction in the courts in Delhi to entertain a suit claiming an injunction in respect thereof. Whether the threat perception is justified or not is another matter which has to be considered and decided upon in the application filed by the plaintiff under Order 39 Rules 1 and 2 or on merits when the suit is taken up for disposal. Insofar as Order 7 Rule 10 is concerned, assuming that whatever is stated in the plaint is correct, one would have to also assume that the threat or the intention of the defendants to sell and offer for sale the offending goods in Delhi is also correct. Therefore, if the threat exists then this court would certainly have jurisdiction to entertain the present suit.
THE JUDGMENT
8. The leaner Judge said “ In my opinion, the facts in the relevant paras of the plaint noted above clearly state the reasons as to why the goods, which are likely to be manufactured by the defendants using the impugned trademark, namely, ‘ZACLEAR’ are likely to be sold in Delhi. Detailed reasons are given to elaborate this apprehension. At this stage, the court has to decide this application assuming the averments made in the plaint to be correct.
…. 13. It is manifest that this court would have territorial jurisdiction to entertain the present suit and Order 7 Rule 10 or Rule 11 CPC will have no application. The application is dismissed. IA. 8953/2020
…14. This application is filed by the plaintiff seeking an ad-interim injunction in favour of the plaintiff and against the defendants restraining defendants No. 1 and 2, their franchises etc. from offering or selling product under the mark ‘ZACLEAR’ or any other deceptively similar variant thereby passing of their products as that of the plaintiff’s trademark “ZYCLEAR”.
….15. It is the case of the plaintiff that for treatment of allergic conjunctivitis the plaintiff created the trademark “ZYCLEAR”. The same is a coined word derived from a combination of the alphabets Z & Y from the plaintiff’s trade names ZYDUS and the term CLEAR. It is pleaded that the plaintiff’s trademark “ZYCLEAR” has been in used since 2017 for eye-drops. The plaintiff has also filed a trademark application on 28.06.2019 for registration of the trademark “ZYCFEAR” under class 05. It is stated that defendant No. 2 by nature of his employment with the plaintiff from 27.08.2008 to 04.02.2020 had undergone necessary training wherein defendant No. 2 acquired access to and came in possession of plaintiff’s proprietary information. It is pleaded that it came to the notice of the plaintiff that defendant No. 2 in collusion with other certain former senior employees of the plaintiff who were privy to plaintiff’s proprietary information drew up a plan to set up manufacturing units as business operations under the name of defendant No. 1 using the plaintiff’s proprietary information. Defendant No. 2, it is pleaded, in collusion with the others malafidely applied for trademark ‘ZACLEAR’ in class 5 which is visually, phonetically and structurally similar to the plaintiff’s prior in use trademark “ZYCLEAR” applied for in the same class. Defendants have adopted a phonetically, visually and structurally identical trademark ‘ZACLEAR’ in respect of an anti-fungal cream and the same is a malafide attempt to pass off the impugned mark as that of the plaintiff.
16. Defendants have filed a written statement. Essentially the defence taken is that this court has no territorial jurisdiction to entertain the present suit. It is also pleaded that a large number of trademarks have the suffix ‘clear’ and adoption of the impugned trademark by the defendants is in order. It is not denied that the defendants have yet to launch the product with the trademark in question ‘ZACLEAR’.
17. On a pointed quarry from the court, learned counsel for the defendants was not able to submit any details of sales being made of the said medicinal products using the trademark ‘ZACLEAR’. Learned counsel for the defendants also stated that his basic submission relates to lack of territorial jurisdiction of this court to decide the present matter. He did not make any submission on the merits of the matter.
18. I may note that in the application filed for registration of the mark “ZYCLEAR” the plaintiff has noted the user of the mark since 22.01.2019. However, the plaintiff in the plaint claims that it has been using the mark since 2017.
19. Learned senior counsel for the plaintiff has shown me invoices for the year 2017 which have been filed along with the plaint in the list of documents. There are invoices on record dated 13.05.2017, 15.05.2017 and 16.02.2018. Prima facie it appears that the plaintiff has been using the mark “ZYCLEAR” since 2017.
20. It is also obvious that the proposed trademark ‘ZACLEAR’ of the defendants is deceptively similar to the plaintiff’s mark “ZYCLEAR”. The said mark “ZYCLEAR” has been used uninterruptedly by the plaintiff since 2017. The attempt of defendants prima facie appears to be to pass off its goods as that of the plaintiff by dishonestly using the trademark ‘ZACLEAR’ which is deceptively similar to the plaintiff’s trademark “ZYCLEAR”.
21. The plaintiff has made out a prima facie case. The balance of convenience is in favour of the plaintiff. The defendants, its agents etc. are restrained from manufacturing, offering for sale or dealing with the products under the mark ‘ZACLEAR’ or any other mark, which is deceptively similar to the products of the plaintiff under the trademark “ZYCLEAR” till pendency of the present suit.”
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