K E BURGMANN Vs. H N SHAH

JUDGEMENT

(1.) This is a suit for grant of permanent injunction, rendition of accounts, delivery up of the infringing material and damages. Plaintiff No. 1 is a company registered in Denmark whereas plaintiff No. 2 is a subsidiary of plaintiff No.1 and is registered in India. Plaintiff No. 1 company was founded by Mr. Keld Ellentoft for developing, designing and manufacturing, fabric, elastomer and fluropolymer expansion joints/compensators, which are installed to accommodate thermal expansion/contraction of the ducting system due to rise and fall in temperature and claims to be a well known manufacturer of these products carrying business in several countries including U.K., Scandinavian countries, North and South America and South Korea. Pursuant to Joint Venture Agreements dated 15.1.1987 and 6.5.1987 the first agreement between plaintiff No. 1 F.Harlay and Company and the second between it and the directors of F. Harlay and Company, defendant No. 2 was incorporated in India on 14.5.1987, for the purpose of manufacturing and marketing expansion joints/compensators, coating materials and related services. 40% of the share capital of defendant No. 2 company was contributed by Danish partners, whereas the remaining 60% was subscribed by the Indian partners. The technology for manufacturing and technical knowhow to defendant No. 2 was provided by plaintiff No. 1. A technical collaboration agreement was entered into between plaintiff No. 1 and defendant No. 2 whereby defendant No. 2 was granted a license, by plaintiff No. 1, to use its trademark with respect to licensed products manufactured for export only. It was stipulated in agreement that on its termination/expiration, defendant No. 2 shall have non-exclusive rights to use the technical knowhow and information but would not have right to use any trademark of plaintiff No. 1, whether licensed during the term of the agreement or otherwise. The Collaboration Agreement was extended for a period of 05 years and expired on 14.2.1998. In the meanwhile, the name of Danish company was changed first from M/s Keld Ellentoft A/S to M/s K.E. Safematic A/S and then to M/s K.E. Burgmann A/S, when it was taken over by Feador Burgmann Dichtungswerke GmbH & Company. Plaintiff No. 1 and defendant No. 1 signed a Memorandum of Agreement dated 12.6.1993 whereby they agreed to remain bound by the earlier existing relationship between defendant No. 2 and predecessors of plaintiff No. 1. In December, 1999, it was decided that Danish partners would sell their shares in defendant No. 2 company to the Indian partners and will thereafter be free to set up an independent business. It was further agreed that the defendants would issue a No Objection Certificate? in this regard to plaintiff No. 1. Defendant No. 2 filed a suit for injunction in Madras High Court which was settled in terms of a Memorandum of Compromise whereby a No Objection? was given to plaintiff No. 1 to set up its independent business in India and defendant No. 2 was allowed to continue to manufacture and sell only the products specified in the Memorandum of Compromise. Defendant No. 1 was not permitted to use any trademark or logo KE of plaintiff No. 1 company and it was agreed that defendant No. 1 will not represent itself as a company connected with or part of plaintiff?s.

(2.) The defendants have contested the suit and have taken a number of preliminary objections. They have alleged that

(3.) The following issues were framed: